Condonation of delay under Section 119(2)(b): merits cannot be decisive, and CBDT circular guidance must be applied.

In proceedings under Section 119(2)(b) of the Income-tax Act, the authority must confine its inquiry to condonation of delay and may not treat the merits of the underlying claim as determinative. The order was found to have adopted an unduly restrictive approach and to have failed to properly apply CBDT Circular No. 9/2015 dated 09.06.2015, which governs condonation within the permissible period. The impugned order was set aside and the matter was remanded for fresh, holistic reconsideration in accordance with the circular.

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Issues: Whether the order passed under Section 119(2)(b) of the Income-tax Act, 1961, declining relief was liable to be set aside for having proceeded on merits and for not giving due regard to the CBDT circular governing condonation of delay.

Analysis: The authority's power under Section 119(2)(b) is confined to consideration of condonation of delay, and merits may at best be noticed but cannot be treated as the conclusive basis for rejection. The order was found to have adopted an unduly restrictive approach and to have overlooked the CBDT directions contained in Circular No. 9/2015 dated 09.06.2015, which contemplate condonation within the permissible period. The matter therefore required a fresh, holistic reconsideration.

Conclusion: The impugned order was set aside and the matter was remanded to the authority for fresh consideration in accordance with the CBDT circular.

Final Conclusion: The petitioner obtained a remand for reconsideration of the request for condonation of delay, while the substantive claim itself was left for fresh decision by the authority.

Ratio Decidendi: In proceedings under Section 119(2)(b) of the Income-tax Act, 1961, the authority must confine itself to condonation of delay and cannot reject the request by treating the merits as determinative; the governing CBDT directions must also be considered.

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