Bona fide explanation for defective return filing can justify condonation of delay and permit processing of returns.

Delay in filing income-tax returns may be condoned under Section 119(2)(b) where the taxpayer gives a bona fide explanation, shows no mala fides, and demonstrates sufficient cause. The Court accepted that the returns had been filed within time but were treated as defective, that the compliance lapse arose from an intimation not effectively communicated to the directors, and that the petitioner's willingness to forgo interest on any refund supported the request. The refusal to condone was set aside, the defects were allowed to be cured, and the returns were permitted to be filed and processed.

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Issues: Whether the delay in filing the income tax returns for the assessment years 2017-18 and 2018-19 deserved to be condoned under Section 119(2)(b) of the Income-tax Act, 1961.

Analysis: The returns had been filed within time but were treated as defective, and the resulting non-compliance was attributed to an intimation that was not effectively brought to the notice of the directors. The explanation disclosed no mala fides. The Court also noted the statement that no interest would be claimed on any refund if condonation were granted, and accepted the explanation as sufficient in the circumstances.

Conclusion: The delay was condoned in favour of the petitioner.

Final Conclusion: The impugned order refusing condonation was set aside, and the petitioner was permitted to cure the defects and proceed with filing and processing of the returns, with consequential assessment to follow.

Ratio Decidendi: Delay in filing a return may be condoned where the explanation is bona fide, shows no mala fides, and constitutes sufficient cause warranting a liberal approach under the condonation power.

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