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

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 severe illness during COVID-19 period when deadline was extended to 15.02.2021. Court relied on Bombay HC precedent emphasizing that condonation provisions enable substantial justice by deciding matters on merits rather than technicalities. HC found petitioner's medical emergency constituted sufficient cause for delay and was entitled to tax refund being higher than liability. Impugned order quashed; respondent directed to pass fresh order under Section 119(2)(b) permitting delayed return filing.

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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.

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