2024 (1) TMI 1081

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....d three projects were not taxable in India. With regard to three other projects relating to AYs 2012-13, 2013-14 and 2014-15, respectively, the petitioner once again approached the AAR on 11.04.2014 and requested for a ruling with regard to the tax liability in India of the petitioner. The due date for filing the return of income for AY 2012-13 was on 30.09.2012 and the extended deadline under Section 139(4) of the Income Tax Act, 1961 (the Income Tax Act) was on 31.03.2014. As regards the AY 2013-14, the due date was on 30.09.2013 and the extended deadline was on 31.03.2015. 3. By referring to the proviso to Section 245(R)(1) of the Income Tax Act which provides that the AAR shall not allow an application where the question raised in the application is already pending before any income tax authority, the petitioner asserts that returns of income for the three AYs were not filed by the petitioner because of the pending applications before the AAR. Eventually, the AAR ruled on the application filed in respect of the G.R. Engineering Private Limited project, which pertained to AY 2014-15, on 16.08.2016. Since a common question of law arises with regard to all these three projects an....

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....he scope of Section 119(2) (b). As a consequence of delay, learned counsel submitted that the petitioner would, in any event, not be entitled to interest up to the date of filing of the respective return. 7. In response to these contentions, Mr.Prabhu Mukund Arunkumar, learned junior standing counsel for the respondents, raised the preliminary objection that the writ petition should not have been filed by the Chartered Accountants of the petitioner. By referring to the authorization issued by the petitioner to the Chartered Accountants, it was submitted that the authorization does not extend to the conduct of proceedings before this Court. A reference was also made to the ethics code of the Institute of Chartered Accountants of India and the Annual Report of Tiong Woon Corporation Holding Ltd. to contend that the Chartered Accountants through whom the writ petitions were filed were the statutory auditors of one of the subsidiaries of the above mentioned holding company, and that Chartered Accountants should not act as authorised representatives in such situation. 8. On the merits, learned counsel submitted that the filing of a return of income is not a bar to the filing of an app....

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....risation is wide enough to embrace these proceedings. As regards the alleged breach of the ethics code, even if established, the same cannot be the basis to reject this petition. 11. Having dealt with the preliminary objection, the question that falls for consideration is whether the delay in filing the returns of income seeking refund should have been condoned. The provision enabling the Board to condone delay is Section 119(2)(b), which is set out below: "(b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise [any income-tax authority, not being [a Joint Commissioner (Appeals) a Commissioner [Appeals)] to admit an application or claim for any exemption, deduction, refund or any other relief 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;" The provision extracted above indicates that the test is whether it is desirable or expedient to condone the delay so as to avoid genuine hardship. 12. In the case at hand, the petitioner explained the dela....

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....ding before the AAR cannot be disregarded as lacking credibility. 15. Given the fact that the returns of income were filed on 04.03.2017, which is more than six months after the AAR ruling, another question arises, namely, whether the delay between 16.08.2016 and 04.03.2017 was adequately explained. In the affidavit in support of the writ petitions, the petitioner has attributed this period of delay to the delay in obtaining the DSC of one of the foreign directors and the consequent delay in filing the returns of income. The reason cited by the petitioner cannot be brushed aside since compliance requirements in this regard are exacting. At the same time, the explanation is not wholly satisfactory. In the return of income for AY 2012-13, the petitioner seeks a refund of Rs. 1.02,61,480/- and in the return of income for AY 2013-14, the refund claim is Rs. 2,80,15,691/-. These refund claims arise because substantial amounts were deducted towards tax at source. These are material facts while assessing genuine hardship. 16. The contention of learned standing counsel that the applications for advance ruling were filed for AYs 2012-13 and 2013-14 after the due dates for filing the retur....