Auditor's inadvertent failure to upload Form 10CCB online constitutes genuine hardship warranting condonation under Section 80IC

The Bombay HC allowed the petition challenging refusal to condone delay in uploading Form 10CCB for claiming deductions under Section 80IC. The Court held that inadvertent failure by auditor to upload the form online constituted genuine hardship, as paying additional tax due to procedural lapse would cause financial prejudice. The HC emphasized that CBDT's power under Section 119 should be exercised liberally to ensure substantial justice, noting no assessee benefits from delayed filing. The impugned order was quashed, and the matter was remanded for fresh consideration on merits with directions for personal hearing.

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Issues Involved
1. Non-disposal of the application u/s 154 of the Income Tax Act, 1961.
2. Denial of deduction u/s 80-IC of the Income Tax Act, 1961.
3. Rejection of the application u/s 264 of the Income Tax Act due to delay.
4. Refusal to condone the delay by the CBDT u/s 119(2)(b) of the Income Tax Act.
5. Interpretation of "genuine hardship" in the context of condonation of delay.

Summary of Judgment

Issue 1: Non-disposal of the application u/s 154 of the Income Tax Act, 1961
The petitioner alleged that the Jurisdictional Assessing Officer (JAO) failed to dispose of the application for rectification of mistakes apparent from the record u/s 154 of the Income Tax Act, 1961, despite numerous reminders. The court noted the dereliction of duty by the JAO for not addressing the application pending for almost six years and directed the JAO to dispose of the application on or before 31st May 2024.

Issue 2: Denial of deduction u/s 80-IC of the Income Tax Act, 1961
The petitioner claimed a deduction u/s 80-IC for an industrial unit in an EPZ at Haridwar, which was denied in the intimation u/s 143(1) dated 29th March 2018. The petitioner contended that the denial was due to the non-uploading of Form 10 CCB by the Chartered Accountants, which was an inadvertent error. The court emphasized that the petitioner should not be penalized for such technical errors and that the objective of the Act is not to penalize an assessee for inadvertent mistakes.

Issue 3: Rejection of the application u/s 264 of the Income Tax Act due to delay
The petitioner's application u/s 264 was dismissed on the grounds of delay. The court acknowledged that the petitioner continued to pursue the pending rectification application and that the delay was due to circumstances beyond the petitioner's control, such as the oversight by the Chartered Accountants.

Issue 4: Refusal to condone the delay by the CBDT u/s 119(2)(b) of the Income Tax Act
The petitioner's application for condonation of delay u/s 119(2)(b) was rejected by the CBDT on the grounds that the reasons stated were general and did not justify genuine hardship. The court quashed and set aside the impugned order dated 1st September 2023, stating that the refusal was based on a narrow interpretation of "genuine hardship" and that the CBDT failed to consider the application in its proper perspective.

Issue 5: Interpretation of "genuine hardship" in the context of condonation of delay
The court held that "genuine hardship" should be construed liberally and that the authorities should bear in mind that no applicant benefits from lodging claims late. The court cited several precedents to emphasize that the approach should be justice-oriented to advance the cause of justice and that mere delay should not defeat a legitimate claim.

Conclusion
The court directed the JAO to dispose of the pending application u/s 154 on merits and provided a timeline for the same. It also highlighted the need for the CBDT to comply with judicial orders and take appropriate actions to ensure justice. The petition was disposed of with specific instructions to the respondents.

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