Condonation of delayed return for A.Y. 2024-25; professional advice not a defence; s.80IBA deduction to be examined at assessment

The HC allowed the petition, set aside the impugned order and condoned the delay in filing the return for A.Y. 2024-25. The court held that reliance on professional advice does not preclude errors or delay and is not a valid ground to refuse condonation. It also found no legal requirement to substantiate a deduction under s. 80IBA at the condonation stage; such matters can be examined during assessment if the return is accepted. Refusal to condone delay would cause genuine hardship by denying a substantial statutory deduction, so delay should be liberally condoned.

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ISSUES:

Whether delay in filing the Return of Income can be condoned under Section 119(2)(b) of the Income Tax Act, 1961.Whether guidance by professional Chartered Accountants precludes acceptance of explanations for delay in filing Return of Income.Whether documentary evidence substantiating claim of deduction under Section 80IBA is required at the stage of condonation of delay.How the phrase "genuine hardship" is to be interpreted in the context of condonation of delay in filing Return of Income.

RULINGS / HOLDINGS:

The delay in filing the Return of Income was condoned under Section 119(2)(b) of the Act, as the explanation for delay due to ill-health was found acceptable and refusal would cause "genuine hardship".The fact that the assessee was guided by professional Chartered Accountants does not mean that errors or delays cannot occur; hence, this ground alone cannot justify rejection of condonation application.There is "no requirement in law to prove the claim of deduction at the stage of condonation of delay"; such claims are to be examined during assessment after acceptance of the Return of Income.The phrase "genuine hardship" is to be construed liberally in cases of delay in filing Return of Income, to avoid "a meritorious matter being thrown out at the very threshold and the cause of justice being defeated."

RATIONALE:

The Court applied Section 119(2)(b) of the Income Tax Act, 1961, which empowers the authority to condone delay in filing returns for sufficient cause.The Court relied on the principle that professional guidance does not eliminate the possibility of delay or error, thus explanations for delay must be considered on their merits.The Court emphasized that substantive claims such as deductions under Section 80IBA are to be adjudicated during assessment proceedings and not at the condonation stage.The Court referred to precedent interpreting "genuine hardship" liberally to ensure that justice is not defeated by procedural delays, citing a coordinate bench decision that supports this approach.

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