TaxTMI 
TaxTMI 
2024 (12) TMI 1275
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....h 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 filing of Form 9A. B) Factual Matrix:- The relevant facts necessa....
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.... 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 set out in the earlier CBDT Circulars applicable for A.Y. 2016-2017 and A.Y. 2017-2018, res....
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....iance 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 computation before the assessing officer. It was solely due to change in procedure from manual to electronic filing, that prevented petitioner from filing Form 9A on time. Th....
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....r 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 correctly construe and interpret such statutory provisions under Section 119 (2) (b) of the IT Act, causing irreparable prejudice to the petitioner-Trust. 18. Mr. Singh would further sub....
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....dgment 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 (Exemptions) [2024] 298 Taxman 650 (Bombay). In the said case, this Court was dealing with a situation where the assessee-trust belatedly submitted Form 10B along with its return on account of oversight by their Chartered Accountant. This Court considered the Instructions issued by the CBDT to its subordina....
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....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 Form 10B, return of income so filed by it, nor electronically filed Form 9A before filing its return of income on 12 October 2017. Resultantly, the petitioner's case was rightly selected for scrutiny by the respondents. 24. It was further submitted that during the assessment proceedings, the assessing officer speci....
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....A 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. Moreover, even in the petition there is no ground to support genuine hardship which prevented the petitioner from filing Form 9A in time. Thus, the petitioner failed to furnish any justification whatsoever to condone the colossal delay of 799 days in filing Form 9A as result of which the impugned order against the petit....
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....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 option under clause (2) of Explanation to sub-section (1) of Section 11 of the IT Act". Rule 17 (1) of the Income Tax Rules, 1962 reads thus:- "17 (1) The option to be exercised in accordance with the provisions of the Explanation to sub-section (1) of section 11 of the Act in respect of income of any previous year relevant to the ....
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....gh 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 the Commissioner of Income Tax to admit an application to claim any exemption, refund or relief after the expiry of the specified period under the IT Act which shall be dealt with in accordance with law. We may note that such provision has been introduced with a view to avoid genuine hardship to the assesses who have come forward with an intent to pay tax and abide b....
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.... 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, and the Return of Income has been file on or before 31st March of the respective assessment years i.e. Assessment Years 2016-17, 2017-18 and 2018-19, the Commissioners of Income-tax (Exemptions) are authorised u/s 119 (2) (b) of the Act, to admit such belated applications for condonation of delay in filing Return of Income and decide on merit." 36. The above re-enforces the legislative intent to permit con....
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....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 is otherwise diligent in filing returns, within the prescribed time. We may also observe that the PCIT is not consistent in the reasons when the cause which the petitioners has urged in their application for condonation of delay was common. 7. We may observe that it would have been quite different if there were reasons available on record of the PCIT that the case on delay in filing returns as urged by the petitio....
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....ired 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 Act. It is pertinent to reiterate that in a fact situation as the present, to dissuade an assessee to file return can be counter-productive to the very object and purpose, the tax laws intend to accomplish. In cases such as this, where the delay is sufficiently explained the same ought to be condoned. 38. We also note a decision of this Court in the case of M/s. Neumec Builders Pvt. Ltd. vs. the C.B.D.T., New Delhi & Ors. 2024 SCC O....
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....ad 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 delays in order to mitigate hardships of the assessees. 9. As mentioned above, the delay in filing Form 10 in the present case occurred because the amendments went unnoticed by the officials of the petitioner. The assessment year 2016-17 was the first occasion subsequent to those amendments. Therefore, we find no reason to disbelieve the explanation furnished by the petitioner to explain the delay in filing Form 10. Further, we are unable to fathom as to what ben....