2024 (11) TMI 178 - HC - Income Tax

Petition for 216-day delay in filing ITR rejected due to insufficient grounds despite COVID-19 claims

The Madras HC rejected a petition seeking condonation of 216 days delay in filing ITR. The petitioner cited delayed audit report receipt and COVID-19 ... Condoning the delay of 216 days in filing their Income Tax Returns (ITR) - delay was occurred due to the delay in receipt of audit report and the COVID outbreak - HELD THAT:- As far as the 1st reason, i.e., delay in receipt of Audit report, is concerned, a perusal of the Audit Certificate dated 02.07.2019 issued by the Auditor would show that the Audit was completed on 02.07.2019 and the statements of (i) Receipts and Disbursements, (ii) Profit and Loss Accounts and Trading Account & (iii) Balance Sheet were also appended along with the said Audit certificate. A perusal of the 1st paragraph would show that the account of the petitioner was audited by Thiru.N.Shunmuga Sundaram, Cooperative Audit Officer and the aforesaid Audit certificate was passed along with the Statements of (i) Receipts and Disbursements, (ii) Profit and Loss Accounts and Trading Account (iii) Balance Sheet. That apart, in the 12th paragraph, it has been indicated that a copy of the Audit certificate was communicated to the Society and the same along with the aforesaid documents are open for inspection by any member of the Society. Therefore, it is crystal clear that the Audit report was made available on 02.07.2019 itself and in such case, there is no substances in the reason assigned by the petitioner on the aspect of delay in receipt of the Audit report. In the application filed by the petitioner under Section 119(2)(b) of the IT Act, nothing has been stated with regard to the delay in receipt of Audit report on 24.02.2020. Even if such statement was made in the said application, the same cannot be considered as a reason for delay in filing the ITR since the Audit certificate was issued to the petitioner as early as on 02.07.2019. Therefore, the respondent had rightly rejected the application filed by the petitioner. 2nd reason of COVID outbreak occured only during the month of March 2020, whereas, the Audit report was made ready, along with the statement of (i) Receipts and Disbursements, (ii) Profit and Loss Accounts and Trading Account (iii) Balance Sheet, as early as on 02.07.2019 itself, i.e., 7 months prior to the COVID outbreak. In such case, this Court is of the view that nothing prevented the petitioner to file their ITR before the said COVID outbreak period. However, in the case on hand, though the Audit certificate was issued on 02.07.2019, the ITR was filed by the petitioner only on 03.06.2020. Therefore, the reason of COVID outbreak cannot be accepted as a genuine hardship faced by the petitioner and considering all these aspects, the respondent had rightly rejected the petitioner's application. Thus, by condoning the delay of 216 days, this Court will, either wittingly or unwittingly, be a party to all the acts of omission/misdeeds committed by the petitioner. Since the issue is pertaining to the revenue matters, the present condone delay petition cannot be compared at par with the other applications filed for condoning the delay in filing, representation, etc. If the delay is condoned and the present petition is entertained in the absence of genuine hardships, it would amount to further encourage the misdeeds of the petitioner. In such case, this Court is not inclined to entertain this petition. Thus, the reasons assigned by the petitioner had not at all justified any genuine hardships faced by them in filing their ITR within prescribed time limit. Taking into consideration of all these aspects, the respondent had rightly rejected the application filed by the petitioner. Issues Involved:1. Whether the delay of 216 days in filing the Income Tax Returns (ITR) by the petitioner can be condoned under Section 119(2)(b) of the Income Tax Act, 1961.2. Whether the reasons provided by the petitioner for the delay, namely the late receipt of the audit report and the COVID outbreak, constitute genuine hardships.3. The applicability and implications of Sections 80P, 80AC, and 234F of the Income Tax Act, 1961, in the context of the petitioner's case.Detailed Analysis:Issue 1: Condonation of Delay in Filing ITRThe central issue is the rejection of the petitioner's application under Section 119(2)(b) of the Income Tax Act, seeking condonation of a 216-day delay in filing their ITR for the assessment year 2019-2020. The petitioner, a Co-operative Society, was required to file its ITR by 31.10.2019 under Section 139(1) of the IT Act. The petitioner filed the ITR on 03.06.2020, attributing the delay to the late receipt of the audit report and the COVID outbreak. The court noted that the audit was completed on 02.07.2019, well before the due date, and the delay was not justified by the reasons provided.Issue 2: Reasons for Delay - Audit Report and COVID OutbreakThe petitioner claimed the delay was due to the late receipt of the audit report and the COVID outbreak. However, the court found that the audit report was completed and made available on 02.07.2019, and the petitioner had ample time to file the ITR before the COVID outbreak in March 2020. The court concluded that the reasons provided did not constitute genuine hardships, as the delay was primarily due to the petitioner's inaction.Issue 3: Applicability of Sections 80P, 80AC, and 234FThe petitioner sought to claim deductions under Section 80P of the IT Act, which are contingent upon timely filing of the ITR as per Section 80AC. The court emphasized that under Section 80AC, no deductions are allowed unless the ITR is filed by the due date. The court also referenced Section 234F, which allows for filing of ITR with a penalty after the due date. The petitioner had already filed the ITR with a penalty, and thus, the application for condonation of delay was deemed unnecessary and an attempt to gain deductions post-facto.The court highlighted that condoning such delays without genuine hardships would set a bad precedent, undermining the purpose of Section 80AC and encouraging similar applications. Consequently, the court dismissed the writ petition, affirming the respondent's decision to reject the condonation application, and concluded that no interference was warranted with the impugned order dated 27.12.2023.