Delhi HC sets aside PCIT order rejecting delay condonation under Section 119(2)(b) for lacking proper reasoning

Delhi HC set aside PCIT's order rejecting condonation of delay application under Section 119(2)(b) for income tax return filing. Court held PCIT failed to provide reasons or assess genuine hardship as required by CBDT Circular No. 9/2015. The order lacked reasoning and rationale, violating legislative mandate since PCIT acts as quasi-judicial body requiring reasoned decisions. Matter remanded to PCIT for fresh consideration in accordance with law and regulations.

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Issues Involved:
1. Whether the PCIT provided adequate reasons for rejecting the condonation of delay application filed u/s 119 (2) (b) of the Income Tax Act, 1961.
2. Whether the impugned order adhered to the legislative mandate of Section 119 (2) (b) of the Act and CBDT Circular No. 9/2015.

Summary:

Issue 1: Adequacy of Reasons for Rejection

The assessee, a retired Indian Air Force personnel practicing as an Advocate, filed his Income Tax Return (ITR) for AY 2013-14 on 21 July 2016, declaring an income of INR 3,24,600/- and TDS of INR 59,170/-. On 04 July 2017, the assessee applied for a TDS refund, but the Revenue informed him that the ITR could not be processed due to late filing and advised him to seek condonation of delay u/s 119 (2) (b) of the Act. The assessee filed the condonation application on 18 July 2017, citing reasons such as lack of TDS information and non-issuance of TDS certificate. The PCIT rejected the application on 28 March 2018, stating it did not fall under 'genuine hardship' as per CBDT Circular No. 9/2015. The Court noted that the impugned order lacked any discussion, analysis, or rationale for this conclusion.

Issue 2: Adherence to Legislative Mandate

The Court emphasized that Section 119 (2) (b) of the Act is a beneficial provision allowing the CBDT to admit applications for exemptions, deductions, or refunds in cases of genuine hardship beyond statutory limitations. The relevant CBDT Circular No. 9/2015 mandates that the correctness and genuineness of the claim and the presence of genuine hardship must be ensured. The Court found that the PCIT did not follow this mandate and summarily rejected the application without providing reasons. The counter-affidavit filed by the Revenue attempted to justify the rejection, but the Court held that the validity of an order must be judged by the reasons mentioned in the order itself, not by subsequent explanations.

The Court concluded that the PCIT, acting as a quasi-judicial body, failed to pass a reasoned order as required by law. Consequently, the impugned order was set aside, and the matter was remanded back to the PCIT for fresh consideration in accordance with the law and extant regulations.

In view of the above, the writ petition was allowed and disposed of accordingly, along with any pending applications.

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