Liberal condonation for co-operative society return delay under Section 119(2)(b) supports Section 80P relief and Circular 13/2023.

A co-operative society's belated income-tax return was considered for condonation under Section 119(2)(b) so it could claim deduction under Section 80P and the benefit of Circular No. 13/2023. The return had been filed after a notice under Section 148 for AY 2019-20, but the analysis emphasised the amendment to Section 80AC, the society's bona fide belief, and the hardship that would arise if condonation were refused. Applying a liberal approach and the principle that substantial justice should prevail over technical objections, the delay application was said to merit allowance, and the return was to be treated as filed within time.

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Issues: Whether the delay in filing the income-tax return could be condoned under Section 119(2)(b) of the Income-tax Act, 1961 so as to extend the benefit of Circular No. 13/2023 to a co-operative society claiming deduction under Section 80P.

Analysis: The return was filed after notice under Section 148 for assessment year 2019-2020. The co-operative society regime had been brought within the filing requirement by the amendment to Section 80AC with effect from 01.04.2018, and the circular was issued to consider belated returns of co-operative societies claiming deduction under Section 80P for the relevant assessment years. The delay was viewed in the context of the petitioner's bona fide belief, the hardship that would follow if the return was not treated as filed in time, and the principle that substantial justice should prevail over technical objections. A liberal approach was held appropriate while dealing with such condonation requests.

Conclusion: The delay application ought to have been allowed, and the belated return was directed to be treated as filed within time, in favour of the petitioner.

Ratio Decidendi: Where a co-operative society's belated return falls within the scope of the relevant CBDT circular and denial of condonation would defeat the substantive benefit intended by the statute, a liberal construction of Section 119(2)(b) is warranted in favour of treating the return as timely filed.

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