TaxTMI 
TaxTMI 
2014 (12) TMI 191
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....ut the return was filed on 14 September 1999, i.e., after delay of about 22 months. 3] As there was a delay in filing the Return of Income for Assessment Year 1997-1998 beyond the period specified under Section 139(1) & (4) of the said Act, the Assessing Officer did not act upon the same. On 7 April 2002 the petitioner approached the CBDT under Section 119 (2)(b) of the said Act and sought for condonation of delay in filing the Return of Income for the Assessment Year 1997-1998. In the application dated 7 April 2002, the petitioner stated that at the relevant time, the office of the petitioner company was shifted and certain records including TDS Certificates got misplaced/mislaid and considerable time was spent to retrieve the same resulting in the delay. 4] The CBDT by its communication dated 7 February 2006 required the petitioner to show cause as to why the application dated 7 April 2002 seeking condonation of delay be not rejected upon the following grounds: (a) That the petitioner was a 'habitual late filer', with a view to avoid scrutiny/enquiry; and (b) There do not appear to be any genuine reasons for the late filing of the Return of Income. 5] The petitioner ....
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.... the scrutiny assessment order made on 15 February 1998 would bear out that the returned income was substantially accepted, with some minor disallowances. In such circumstances, there was neither any material nor any justification to style the petitioner as an 'habitual late filer'. Besides, the petitioner by its communication dated 23 March 2006 addressed to the CBDT had made it clear that it has no objection whatsoever to scrutiny assessment for the purpose of determining refund and further even the instructions issued by the CBDT contemplated scrutiny in respect of delayed claims of refund. In such circumstances, the charge that the delay in filing of Return was to avoid scrutiny, is completely baseless. Ms Vissanji, relying upon the undermentioned decisions, submitted that a liberal approach is to be adopted in matters of condonation of delay, rather than a pedantic or hyper technical approach, which would defeat the legitimate claims of tax payers. (1) B.M. Malani vs. Commissioner of Income Tax 306 ITR 196 (S.C.) ; (2) R. Seshammal vs. Income Tax Officer & anr 237 ITR 185 (MAD); (3) Sitaldas K. Motwani vs. Director General of Income Tax & anr. 323 ITR 223 (BOM) and ....
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....ief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law;" 10] The CBDT, in terms of Section 119 (2)(b) of said Act is vested with powers to admit an application or claim for any exemption, deduction, refund or any other relief under the said Act after the expiry of period specified by or under said Act for making such application or claim and deal with the same on merits in accordance with law, where the CBDT considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases. From time to time, the CBDT has been issuing instructions to effectuate exercise of powers under Section 119(2) (b) of the said Act, which includes inter alia instruction No.12/2003 dated 30 October 2003. Instruction No.12/2003, inter alia, provides that cases where delayed claims of refunds are being considered would be taken up for scrutiny. This as to ensure that income declared and refund claimed are correct and genuine and also that the case is of genuine hardship on merits. Support for the above is also found in similar instruction No.13/2006, inter ....
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....ed with all the conditions mentioned in Circular dated October 12,1993. The Legislature has conferred the power to condone delay to enable the authorities to do substantive justice to the parties by disposing of the matters on the merits. The expression "genuine" has received a liberal meaning in view of the law laid down by the apex court referred to hereinabove and while considering this aspect, the authorities are expected to bear in mind that ordinarily the applicant, applying for condonation of delay does not stand to benefit by lodging its claim late. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold an cause of justice being defeated. As against this, when delay is condoned the highest that can happen is that a cause would be decided on the merits after hearing the parties. When substantial justice and technical considerations are pitted against each other, the cause of substantial justice deserves to be preferred for the other side cannot claim to have a vested right in injustice being done because of a nondeliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, o....
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....erial to sustain the inference that late filing of returns was to avoid scrutiny. The petitioner, by its communication dated 23 March 2006, had already made it clear that it had no objection to scrutiny assessment for the purposes of determining refund for the Assessment Year 1997-1998. The CBDT instructions, to which reference has been made earlier also provide that cases where delayed claims for refunds are being considered would be taken up for scrutiny. Besides, even the provisions of Section 119 (2)(b) of the said Act make it clear that the CBDT can authorise any Income Tax Authorities to admit an application or claim for any exemption, deduction, refund or any other relief under the said Act after the expiry of period specified by or under the said Act for making such application or claim and to deal with the same on merits in accordance with law. The expression 'deal with the same on merits in accordance with law' makes it clear that the CBDT, even where it authorises an ITO to admit an application or claim made belatedly, would obviously direct its consideration on merits and in accordance with law. In such circumstances, the contention of Mr.Pinto, learned counsel ....
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....x Returns. As observed in case of Sitaldas (supra), there is no presumption that delay is occasioned deliberately or on account of culpable negligence or on account of mala fides. It cannot be said that in this case the petitioner has benefited by resorting to delay. In any case when substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to prevail without in any manner doing violence to the language of the Act. 20] Mr. Pinto submitted that inordinate delay of two years in filing the Return of Income lands the petitioner in the arena of laches and therefore, no relief should be granted to the petitioner. The principle on which the relief is denied to the party on grounds of delay or laches is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the Court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not to physical running of t....
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....he said case was concerned with a widow seeking refund of a paltry amount of Rs. 43,808/. Whereas, the present case concerns a company dealing in Artifacts and finances, which has the benefit of services of professionals and auditors. This is no manner to distinguish a decision. Seshammal (supra) is basically an authority for the proposition that in matters of condonation of delay, a liberal approach needs to be adopted and further the State should not ordinarily plead hyper technical plea of limitation to avoid return of amounts due to an assessee. This Court, in case of Sitaldas (supra) has understood Seshammal (supra) accordingly. 23] In light of the aforesaid discussion, we are of the opinion that an acceptable explanation was offered by the petitioner and a case of genuine hardship was made out. The refusal by the CBDT to condone the delay was a result of adoption of an unduly restrictive approach. The CBDT appears to have proceeded on the basis that the delay was deliberate, when from explanation offered by the petitioner, it is clear that the delay was neither deliberate, nor on account of culpable negligence or any mala fides. Therefore, the impugned order dated 16 May 20....