Delay in Filing Audit Report Condoned; Court Acknowledges Pandemic Hardship for Student Welfare Trust's 2020-21 Audit. The HC set aside the impugned order, condoning the delay in filing the audit report by the petitioner, a Trust for student welfare, under Section ...
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Delay in Filing Audit Report Condoned; Court Acknowledges Pandemic Hardship for Student Welfare Trust's 2020-21 Audit.
The HC set aside the impugned order, condoning the delay in filing the audit report by the petitioner, a Trust for student welfare, under Section 119(2)(b) of the Income Tax Act. The Court acknowledged the pandemic's impact and genuine hardship faced by the Trust, directing the respondent to process the audit report for the assessment year 2020-2021. The writ petition was disposed of without costs, and all connected miscellaneous petitions were closed.
Issues: Delay in filing audit report for assessment year 2020-2021 under Section 119 (2) (b) of the Income Tax Act.
Analysis: The petitioner, a Trust for student welfare, filed the return of income and audit report on 31.05.2021, with the audit report acceptance delayed until 12.09.2023. The petitioner sought condonation of the delay under Section 119 (2) (b), which was rejected on 01.12.2023, leading to this writ petition.
The petitioner's counsel argued that the delay in accepting the audit report was due to the Covid-19 pandemic and technical issues during e-filing services transition. He highlighted that the audit report was filed on 31.05.2023, not 02.09.2023 as erroneously stated, and emphasized the Trust's eligibility for exemption. Citing Supreme Court precedent, he contended that exemption should not be denied solely for delayed filing if the assessee qualifies otherwise.
On the other hand, the senior standing counsel for the respondents acknowledged a 130-day delay in filing the audit report, emphasizing the petitioner's failure to rectify the issue promptly despite a demand under Section 143 (1) of the Income Tax Act on 30.11.2021. He argued that the 960-day delay was inadequately explained by the petitioner.
The Court noted the filing dates of the return of income and audit report, considering the pandemic's impact and the advanced age of the Trust's Managing Trustee and Auditor. Referring to judicial precedents, the Court stressed the need for a liberal exercise of power under Section 119 (2) (b) and assessed the genuine hardship faced by the student welfare Trust. Ultimately, the Court set aside the impugned order, condoning the delay in filing the audit report and directing the respondent to process the audit report for the petitioner's assessment.
In conclusion, the Court disposed of the writ petition without costs, closing connected miscellaneous petitions following the judgment.
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