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2024 (12) TMI 1275
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....er satisfying itself as to the legality thereof quash and set aside the order dated 28.09.2023 passed by the Respondent No. 1 under section 119 (2) (b) of the Income tax Act, 1961, being Ex.-'K' and admit/accept the Form no 9A (Exh: 'E')hereto; b. that this Hon'ble Court may be pleased to issue under Article 226 of the Constitution of India an appropriate direction, order or a writ, calling for the records of the case and after satisfying itself as to the legality thereof quash and set aside the order passed by the Respondent No. 1 dated 28/09/2023, being Ex.-'K' and direct the Respondents 1 & 2 to admit/accept the Form no 9A (Exh: 'E'))hereto." A) Issue before the Court:- 3. The issue that arises for consideration in this petition is whether the respondent No. 1 was legally justified in rejecting the application for condonation of delay of 799 days filed by the petitioner in filing Form 9A for the Assessment Year ("A.Y." for short) 2017-2018, when there is a power coupled with statutory discretion conferred upon the commissioners/competent authority under Section 119 (2) (b), of the Income Tax Act, 1961 ("IT Act" for short) authorizing them to admit belated fili....
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....eason for such delay. In this regard, the petitioner was guided by Central Board of Direct Taxes ("CBDT" for short) Circular No. 7 of 2018, dated 20 December 2018 for the A.Y. 2016-2017 issued under Section 119 (2) (b) of the IT Act. The said provision empowers the Commissioner to admit belated application for condonation of delay in filing Form 9A and decide such application on merits, in situations where the assessee was prevented by reasonable cause from filing such applications in Form 9A and Form 10, within the stipulated time. Following the above, the CBDT issued another Circular No. 30 of 2019 under Section 119 (2) (b) of the IT Act dated 17 December 2019 extending the applicability of the earlier Circular to the assessment year in question i.e. A.Y. 2017-2018. In fact Form 9A in the present case was filed by the petitioner on 20 December 2019 on the Income Tax portal i.e., just after 3 days of the issuance of the CBDT Circular dated 17 December 2020. Further the CBDT then issued Circular No. 6 of 2019, dated 19 February 2020 in the context of condonation of delay under Section 119 (2) (b) of the IT Act applicable for the A.Y. 2018-2019. This was on similar reasoning/basis s....
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....itioner in filing Form 9A belatedly and also disallowing the claims made by the petitioner, is irrational, unfair, unjust and illegal. 13. Mr. Singh would then place reliance on the revised computation of income submitted by the petitioner on 9 November 2019, during the course of assessment proceedings, to respondent no. 2. By this, the petitioner attempted to rectify certain computation mistakes namely claim of depreciation of Rs. 19,25,787/- on fixed assets under section 11 (6) of the IT Act; expenses claimed towards capital expenditure, as also deduction claimed of Rs. 57,28,869/- (in exercise of option under clause (2) of Explanation (1) to section 11 (1) of the IT Act) being interest accrued but not received. However, due to change of procedure in filing Form 9A, the above facts couldn't be placed by the petitioner within time. Mr. Singh would urge that the petitioner's claim of deduction under section 11 (1) explanation arose subsequent to rectification of incorrect claim made in the return of income of depreciation and capital expenditure. At that juncture, time limit for submission of Form 9A had expired, though the claim was raised by the petitioner by filing revised co....
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..... 2017-2018. Mr. Singh would contend that the said Form 9A was filed by the petitioner within just 3 days from the extension granted vide Circular No. 30 of 2019 dated 17 December 2019. According to him, had the impugned order considered this aspect which clearly bring about the bona fides of the petitioner to comply with the belated filing of Form 9A would not have been rejected in such summary manner. 17. Mr. Singh would then refer to and rely upon Section 119 (2) (b) of the IT Act in support of his reliance on the aforementioned Circulars issued by the CBDT from time to time. He points out that there is clear reference to Section 119 (2) (b) in all of the Circulars of CBDT mentioned (Supra). This is to contend that the said Section specifically empowers the income tax authorities to consider any application or claim which would include return of income filed for any exemption after expiry of the stipulated period. This is to mitigate the genuine hardship caused to the assessees in appropriate situations and circumstances. Thus, the impugned order passed under section 119 (2) (b) rejecting the case of the petitioner for condonation of delay in filing Form 9A, failed to correct....
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....f which were wrongly disallowed by the respondents. This was not considered by the assessing officer in the impugned order as such delay in filing Form 9A by the petitioner was intentional, deliberate and not a mere procedural lapse. 19. Mr. Singh in support of the petitioner's case would rely on a judgment of the Delhi High Court in the case of Bar Council of India vs. Commissioner of Income Tax (Exemption) [2024] 158 taxmann. Com 311 (Delhi). He placed reliance on paragraphs 6 to 9 of the said decision which relied upon the Circulars of CBDT dated 17 December 2019 and 31 January 2020 to contend that the Commissioner of Income Tax was authorized to admit belated delay condonation application under Section 119 (2) of the IT Act where the delay is upto 365 days. He would thus submit that the respondents in the present case have failed to exercise such discretion statutorily conferred, to condone delay of the petitioner in filing its Form 9A, contrary to such decision of the Bar Council of India (Supra). 20. The petitioner would then refer to the decision of the coordinate bench of this Court in the case of Al Jamia Mohammediyah Education Society v. Commissioner of Income-tax (....
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....er, it had not claimed any deduction in respect of the amount deemed to be applied as per clause 2 of 'Explanation 1' to Section 11 (1) for which filing of Form 9A is mandatory. Also, under the Income Tax Rules it is mandatory for petitioner-trust to apply 85% of its income for charitable/religious purposes every year. In the event, the trust is unable to do so, it has the option of deemed application for certain type of income. Accordingly, in terms of 'Explanation 2' to Section 11 (1) if in the previous year, a charitable trust is not able to utilize its 85% of its income due to the fact that such income has not been received in the previous year or for any other reason, then the trust has the option to apply such income in the year of receipt or in the year immediately following the year of approval of income. Rule 17 of the IT Rules stipulates that the option for deemed application ought to be exercised by the petitioner in Form 9A, which was to be furnished electronically, before the due date specified under Section 139 (1) of the IT Act. In the instant case, the petitioner has neither determined nor claimed such amount of deemed application in its audit report furnished in Fo....
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....799 days. In this context, the case of the petitioner that the delay is, at the highest, a procedural lapse, is not acceptable in the facts of the present case. This is in as much as, the petitioner neither determined nor claimed such amount of deemed application in its audit report in Form 10B nor electronically Form 9A belatedly until 20 December 2019 in respect of return of income which was already filed on 12 October 2017. The petitioner had claimed such deduction only during the course of assessment proceedings, only when the assessing officer, specifically asked for the same, which lacks bona fides. 27. Mr. Gulabani then emphatically urged that the reliance of the petitioner on the Circulars issued by the CBDT from time to time cited (Supra) are of no assistance to the petitioner. This is in as much as the petitioner failed to produce all the relevant documents/information sought by the respondents from the petitioner to enable the respondents to arrive at the requisite satisfaction about the reasonableness and genuineness of the petitioner's case. Further, the petitioner omitted to provide any plausible explanation to condone such gross delay of 799 days in filing Form 9A....
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.... Rs. 57,28,869/- being interest income accrued but not received. We find that such note of revised computation of income duly furnished/uploaded by the petitioner on 9 November 2019. However, it was not considered in the impugned assessment order. The jurisdictional assessing officer completely lost sight of the fact that at the time when the petitioner claimed deductions towards depreciation and capital expenditure under Section 11 (1) of the IT Act by filing the said revised computation, the time limit for submission of Form 9A had lapsed, due to change of procedure. The petitioner filed |Form 9A though belatedly for reasons not attributable to the petitioner. It appears from the impugned order that the jurisdictional assessing officer wrongly linked and mixed up such issue of belated filing of Form 9A with disallowance of the petitioners claim of deduction towards depreciation and capital expenditure under Section 11 (1) of the IT act, made by the petitioner in the assessment proceedings. 30. A perusal of record reveals that the petitioner had filed Form 9A dated 20 December 2019 under Rule 17 (1) of the Income Tax Rules, 1962 under the heading "Application for exercise of op....
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....al proof from the petitioner in filing Form 9A before the assessing officer, was itself legally unfounded as such requirement was itself done away with under Rule 17 w.e.f. 1 April 2016. The Impugned Order dated 28 September 2023, thus suffers from perversity on account of non-consideration of such fundamental factual and legal position, though available before him, when he passed the said order. 32. We have perused Section 119 (2) (b) of the IT Act which deals Extracted below is the said section. "(a).... 119 (2) (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) or] 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" 33. A perusal of the above statutory provision makes it clear that the legislature has specifically conferred power to ....
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.... for Assessment Year 2017-18-extension of applicability of Circular No.7 of 2018- Reg. In partial modification of this office Circular No.7 of 2018, dated 20th December, 2018 issued vide F No. 197/155/2018-ITA-I on the above mentioned subject, it is decided to extend the applicability of this Circular to Assessment Year 2017-18." 35. A perusal of the above unequivocally brings out clear legislative intent to extend the applicability of the earlier Circular dated 20 December 2018 for A.Y. 2016-2017 to assessment year in question i.e., A.Y. 2017-2018. Thus, even under the said Circular No. 30 of 2019, dated 17 December 2019 the delay in filing Form 9A and Form 10 for A.Y. 2017-2018, could be condoned. This followed issuance of another Circular No. 6 of 2020 dated 19 February 2020 applicable to A.Y. 2018-2019, relevant portion of which reads thus: "2. Accordingly, in continuation of earlier Circulars issued in this regard, with the riew to prevent hardship to the assessee and in exercise of powers conferred under section 119 (2) (b) of the Act, the CBDT has decided that where the application for condonation of delay in filing Form 9A and Form 10 has been filed, an....
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....missioner of Income-tax 19 & Ors. 2024 SCC OnLine Bom 2946., of which one of the member (G.S. Kulkarni, J.) was a member. Analyzing the provision of Section 119 of the IT Act, this Court had made an elaborate observation that a bona fide delay on the part of the Chartered Accountant which prevented him from filing return of the petitioner was accepted by the Court to be sufficient ground for condoning delay, under the statutory provision. The relevant observations in this regard to be noted are in paragraphs 6, 7 and 8 of the judgment in Jyotsna Mehta Ors. (Supra) which read thus :- "6. In our opinion, the approach of PCIT appears to be quite mechanical, who ought to have been more sensitive to the cause which was brought before him when the petitioner prayed for condonation of delay. In such context, we may observe that it can never be that technicalities and rigidity of rules of law would not recognize genuine human problems of such nature, which may prevent a person from achieving such compliances. It is to cater to such situations the legislature has made a provision conferring a power to condone delay. These are all human issues and which may prevent the assessee who ....
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.... of delay in filing income tax returns, so as to remove the prejudice being caused to him, so as to regularise his returns. In fact, in this situation, to not permit an assessee to file his returns, is quite counter productive to the very object and purpose, the tax laws intend to achieve. In this view of the matter, we have no manner of doubt that the delay which is sufficiently explained in the present case would be required to be condoned. 8. Resultantly, the impugned order is quashed and set aside. The respondents are directed to permit the petitioners to file returns without penalty, fees and interest, if any, within a period of two weeks from today. All contentions of the parties on the merits of the returns are expressly kept open." In so far as the present case is concerned, there is undoubtedly a delay in filing Form 9A on part of the petitioner, however, as observed by us above, such delay appears to be completely bona fide. The principles which are paramount and jurisprudentially accepted in the case of Jyotsna Mehta (Supra) in our opinion mandates their application in the present facts in condoning delay under the umbrella of section 119 (2) (b) of the IT Ac....
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....ay of CBDT Circular No. 03/2020 dated 3-1-2020, the Commissioners were authorized to admit the belated delay condonation applications under section 119 (2) of the Act where delay is upto 365 days. 7.2 More recently, by way of similar CBDT Circular No. 17/2022 dated 17-7-2022, the Commissioners were authorized to condone delay beyond 365 days upto 03 years in filing Forms 9A and 10 for AY 2018-19. 8. For AY 2017-18 also, the petitioner/assessee had filed a similar application seeking condonation of delay in filing Form 10, which was allowed by the Commissioner Income-tax vide order dated 26-12-2019 correctly, laying emphasis that the mandate of Section 119 (2) (b) of the Act is to mitigate the genuine hardship of assessee in certain circumstances and authorization to the Commissioners to admit the belated Form 10. In the said order dated 26-12-2019, the Commissioner Income-tax condoned the delay in filing Form 10 (which was electronically filed on 5-3-2019) for AY 2017-18. Similarly for AY 2018-19 also, delay on the part of the petitioner in filing Form 10 was condoned in view of the underlying principle of the above mentioned circulars to liberally condone such de....
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....etitioner-trust is not a procedural lapse, is in the present facts a hyper technical and pedantic approach which cannot be countenanced. Such would be paradoxical to the clear intent of the legislature as evident from Section 119 (2) (b) of the IT Act read with the Circulars issued by CBDT cited (Supra) aimed that mitigating, preventing hardship to the genuine assesses, in such situations. 42. In our view, the powers and statutory discretion conferred on the commissioners to condone delay under Section 119 (2) (b) of the IT Act ought to be judiciously exercised so that undue hardship to the assessee is avoided. Instead, the impugned order makes it evident that the assessing officer has mixed up issues of the petitioner claiming deductions towards deprecation and capital expenditure made and duly disclosed by it during the assessment proceedings with intentional delay in belated filing of Form 9A attributed to the petitioner. In fact the chart relied on by the petitioner reproduced (Supra) setting out the revised computation of income by the assessee of Rs. 2,70,006/- as against that of Rs. 59,98,875/- not being accepted by the respondents in light of delayed filing of Form 9A by....