Section 119(2)(b) delay in revised returns condoned where assessee shows genuine hardship from excess tax payment

The Bombay HC held that delay in filing revised returns under Section 119(2)(b) should be condoned where assessee demonstrates genuine hardship. The court ruled that feeling of having paid excess tax constitutes genuine hardship, rejecting the lower authority's narrow interpretation. Emphasizing liberal construction of "genuine hardship," the HC noted that condonation powers exist to ensure substantial justice and prevent meritorious cases from being dismissed on technicalities. The court directed authorities to reopen the portal within two weeks for filing revised returns and decide on merits whether compensation under Right to Fair Compensation Act is taxable.

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Issues Involved:
1. Impugning the order dated 22nd September 2023 under Section 119(2)(b) of the Income Tax Act, 1961.
2. Consideration of "genuine hardship" under Section 119(2)(b) of the Act.
3. Condonation of delay in filing revised returns.

Summary:

Issue 1: Impugning the Order Dated 22nd September 2023
The petitioner challenged the order dated 22nd September 2023, passed under Section 119(2)(b) of the Income Tax Act, 1961. The petitioner, engaged in acquiring and developing plots of land, received a compensation of Rs. 39,07,595/- for compulsory acquisition of land under the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013. This compensation was inadvertently included in the total profit declared in the return of income for Assessment Year 2022-23. The petitioner sought to file a revised return after realizing no tax was payable on the compensation but was rejected due to the delay.

Issue 2: Consideration of "Genuine Hardship"
The court emphasized that "genuine hardship" under Section 119(2)(b) should be construed liberally. It referred to precedents such as Optra Health Pvt. Ltd. v. Additional Commissioner of Income Tax and Sitaldas K. Motwani v. Director General of Income-tax, highlighting that genuine hardship involves more than just the inability to file corrections on time. The authorities should consider other factors and aim for substantial justice. The court noted that refusing to condone the delay could result in a meritorious matter being dismissed prematurely, defeating the cause of justice.

Issue 3: Condonation of Delay in Filing Revised Returns
The court concluded that the phrase "genuine hardship" should be interpreted liberally to enable substantial justice. It was noted that the petitioner did not benefit from the delay and that the authorities should have condoned the delay and considered the matter on its merits. Consequently, the court disposed of the petition with the following orders:
(a) The delay in filing revised returns is condoned.
(b) The respondent shall open the portal within two weeks to enable the petitioner to file revised returns.
(c) The concerned authority may pass an order in accordance with the law.

The court clarified that it did not decide on the taxability of the compensation received under the Right to Fair Compensation Act, leaving this determination to the concerned authority.

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