2024 (1) TMI 1394 - HC - Income Tax

Taxpayer wins challenge against income tax return filing delay refusal due to medical emergency during COVID-19

DHRUVIN PRADIPBHAI SHAH Versus CHIEF COMMISSIONER OF INCOME TAX-1 AHMEDABAD

Gujarat HC allowed petition challenging refusal to condone delay in filing income tax return for AY 2020-21. Petitioner sought extension due to father's ... Refusal of application to condone the delay in filing income tax return -petitioner submitted that the petitioner could not file return before the due date for AY 2020-2021, which was extended upto 15.02.2021 because of the COVID-2019 as the father of the petitioner was severely ill and admitted in hospital - entitlement to refund of the amount of the tax deducted at sources higher than the amount of tax payable by the petitioner HELD THAT:- In view of the recent decision in the case of Pankaj Kailash Agarwal [2024 (4) TMI 549 - BOMBAY HIGH COURT] has held that the legislature has conferred the power to condone the delay to enable the authorities to do substantial justice to the parties by disposing the matter on merits. The routinely passing the order without appreciating the reasons why the provisions for condonation of delay has been provided in the Act, defeats the cause of justice. In the facts of the case also, when the petitioner has preferred an application to condone the delay to get the refund to which he is entitled to, the respondent considering the cause of illness of the father of the petitioner ought to have condoned the delay. The petition succeeds and accordingly, allowed. The impugned order is hereby quashed and set aside. The respondent is directed to pass a fresh order under Section 119(2)(b) of the Act permitting the petitioner to file the return of income for AY 2020-2021 so as to enable the petitioner to claim the refund in accordance with law. Issues:Challenge to impugned order under Section 119(2)(b) of the Income Tax Act, 1961 for refusal to condone delay in filing income tax return for AY 2020-2021.Analysis:The petitioner challenged the order refusing to condone the delay in filing the income tax return for AY 2020-2021 due to the ill-health of his father. The respondent rejected the application citing reasons including the extended due dates for filing returns and audit reports due to the COVID-19 pandemic. The respondent also noted the petitioner's history of late filings. The petitioner contended that the illness of his father prevented timely filing and referenced Circular No.8/2021 extending deadlines. The Assessing Officer recommended condoning the delay, but the respondent rejected the application, stating the reasons did not qualify as genuine hardships under Section 119(2)(b) of the Act.The petitioner argued that the delay was due to the severe illness of his father, leading to his hospitalization during the extended filing period. Referring to medical reports, the petitioner claimed entitlement to a refund higher than the tax payable. The petitioner also cited Circular No.8/2021 extending the deadline for filing, and the Assessing Officer's recommendation to condone the delay. The respondent contended that the reasons provided did not constitute genuine hardships as the extended filing deadline allowed for compliance within the period.The Court referred to Section 119(2)(b) of the Act, which empowers authorities to admit applications for relief after the specified period to avoid genuine hardships. Considering the recent decision of the Bombay High Court emphasizing substantial justice and the purpose of condonation provisions, the Court held in favor of the petitioner. The Court quashed the impugned order, directing the respondent to permit the petitioner to file the return for AY 2020-2021 to claim the refund. The Court emphasized the need to appreciate reasons for delay condonation provisions and ordered the respondent to act accordingly.