Court Condones Delay in Filing 2017-18 & 2018-19 Tax Returns Due to COVID Hardships, No Interest on Refunds

The HC set aside the impugned order and condoned the delay in filing income tax returns for the assessment years 2017-18 and 2018-19, acknowledging the Petitioner's financial hardships due to the Covid-19 pandemic and the absence of mala fides. The Petitioner agreed not to claim interest on refunds if the delay was condoned. The Court directed the Respondents to provide a defect notice for rectification, allowing the Petitioner to file returns electronically or physically as a special exception. The rule was made absolute without costs, and compliance with the order was mandated.

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The Petitioner challenged an order under Section 119 (2) (b) of the Income Tax Act, 1961, which refused to condone the delay in filing income tax returns for the assessment years 2017-18 and 2018-19. The Petitioner faced genuine hardships due to financial constraints exacerbated by the Covid-19 pandemic. The delay in filing the returns was attributed to a part-time accountant who failed to address the notice of defective return promptly. The Petitioner believed the delay was due to pending refunds, but upon investigation, it was discovered that the returns had unintentional defects.The Court considered the Petitioner's explanation and the absence of mala fides in the delay. The Petitioner committed to not claiming interest on any refunds due if the delay was condoned. The Court acknowledged the financial significance of the refunds amounting to Rs. 5,65,000 for the Petitioner. Consequently, the Court inclined to allow condonation of the delay.The Court directed the Respondents to provide a copy of the defect notice to the Petitioner for rectification within a specified timeline. The Petitioner was instructed to clear the defects and file the returns promptly. Upon filing the corrected returns, the Assessing Officer would scrutinize and make assessments accordingly. Any amounts payable by the Petitioner would need to be settled, while refunds, if due, would be granted without interest based on the Petitioner's undertaking.In case of difficulties in filing returns electronically, the Petitioner was permitted to file in physical format as a special exception. The Court emphasized that this allowance was specific to the present circumstances and should not set a precedent. The impugned order was set aside, and the delay was condoned subject to the outlined directions and observations.Ultimately, the rule was made absolute without any cost order, and all parties were instructed to comply with the Court's decision as per an authenticated copy of the order.

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