TaxTMI 
TaxTMI 
2025 (7) TMI 187
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....ted. 3. The brief facts which has led to filing of the present are as under: 3.1. The petitioner is a non-resident of India residing in United State of America (USA). He has not filed any return under the provisions of the Act since last 22 years. However during the Assessment Year 2022-23, the petitioner sold the residential flat jointly owned with his spouse for Rs. 29,50,000/-. As per the provisions of Section 195 of the Act, the Tax was Deducted at Source(TDS) at Rs. 6,74,960/-. The Tax Deducted at Source was at gross value, being sale consideration and the expenses and cost of acquisition were ignored. 3.2. It is the case of the petitioner that when he computed his tax liability, it amounted to 'NIL'. Therefore, there was refund of Rs. 6,74,960/-. The petitioner being a non-resident was under the impression that no Return of Income was required to be filed as per the provisions of the Act as there was no tax liability. When the legitimate refund was not received by the petitioner, he thought it fit to file return claiming return at the time of his visit to India. However, the petitioner was not aware that Section 139(4) of the Act as amended, restricted the filing of ....
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....s to show that there was genuine hardship attributed to the circumstances of the petitioner. The respondent has failed to consider that the petitioner being non-resident was not aware about the amendment in the Act. When the petitioner came to know about the amendment under Section 139(4) of the Act restricting to file belated return, the petitioner visited India again to file belated return. However, without looking to the medical condition of the petitioner, the respondent has rejected the application under Section 119 (2)(b) of the Act, which is unjust, unfair in every manner. 4.1. It was, therefore, submitted that there was no liability of tax on the petitioner. Once the claim of the petitioner was not found to be unacceptable, the refund ought to have been granted and ought not to have been denied on the technical grounds. It was further submitted that in the facts of the present case, tax has been collected in excess by the exchequer. Such collection is not as per the law. When the factum of Rs. 6,74,960/- being excessively collected is not controverted by the exchequer, then the petitioner was eligible for refund and ought not to have been denied the refund on technical g....
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.... years and he was staying far away from India. Therefore, coming to the facts of the case when the petitioner was not aware of the procedural aspect of the income tax law as well as the fact that he was medically unfit during the pendency of the application under Section 119(2)(b) of the Act, the respondent authority could not have rejected the application as filing of return for claiming benefit under the provisions of the Act is procedural and the benefit accrued to the assessee cannot be taken away on account of technicalities when there is a genuine hardship. This can be drawn from the case of Sitaldas K. Motwani v. Director General of Income Tax (International Taxation) reported in [2010] 187 Taxman 44 {=323 ITR 223 (Bombay)} as well as the case of Bombay Mercantile Co-op. Bank Ltd., v. CBDT reported in [2010] 195 Taxman 106 {=332 ITR 87(Bombay)}. Similarly in case of Pankaj Kailash Agarwal v. Assistant Commissioner of Income Tax reported in [2024] 464 ITR 65 (Bombay), the Hon'ble Bombay High Court has held as under :- "10. On the issue of genuine hardship, relying on R. K. Madhani Prakash Engineers (Supra), Mr. Sarda submitted that while considering this aspect of ge....
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....rties by disposing the matters on merits. The expression 'genuine' has received a liberal meaning in view of the law laid down by the Apex Court 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 erroneous returns. Refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold and 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 merits after hearing the parties. When substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a non-deliberate action. There is no presumption that a delay in correcting an error or responding to a notice of invalid return received under Section 139(9) of the Act is occasioned deliberately or on account of culpable negligence or on account of mala-fides. A litigant does not stand to benefit by resorting to delay. In fact, he ru....
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....er the Act are dropped by the authorities concerned. The State is not entitled to plead the hyper technical plea of limitation in such a situation to avoid return of the amounts. Section 119 of the Act vests ample power in the Board to render justice in such a situation. The Board has acted arbitrarily in rejecting the petitioner's request for refund." (p.187) 15. The phrase "genuine hardship" used in section 119(2)(b) should have been construed liberally even when the petitioner has complied with all the conditions mentioned in Circular dated 12-10-1993. 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 merit. The expression "genuine" has received a liberal meaning in view of the law laid down by the Apex Court referred to herein-above and while considering this aspect, the authorities are expected to bare 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 and cause of justice being defeated. ....
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....tance, on the contrary adds force to the explanation furnished by the petitioner that the delay in filing of returns was only on account of misplacement or the TDS Certificates, which the petitioner was advised, has to be necessarily filed alongwith the Return of Income in view of the provisions contained in Section 139 of the said Act read alongwith Income Tax Rules, 1962 and in particular the report in the prescribed Forms of Return of Income then in vogue which required an assessee to attach the TDS Certificates for the refund being claimed. The explanation furnished is that on account of shifting of registered office, it is possible that TDS Certificates which may have been addressed to the earlier office, got misplaced. There is nothing counterfeit or bogus in the explanation offered. It cannot be said that the petitioner has obtained any undue advantage out of delay in filing of Income Tax Returns. As observed in case of Sitaldas K. Motwani (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 wh....
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....are expected to bear in mind that no applicant would stand to benefit by lodging delayed returns. The court also held that refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when the delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. Similar issue came to be considered in R. K. Madhani Prakash Engineers (Supra), where paragraph 8 reads as under : "8 Further it is recorded in the impugned order that petitioner has failed in proving the genuine hardship. In this regard, we would refer to the judgment of a Division Bench of this court in the case of Sitaldas K. Motwani Vs. Director General of Income Tax (International Taxation) & Ors., (2009 Scc Online Bom 2195) where the court has discussed the phrase "genuine hardship" used in Section 119(2)(b) of the Act. The court has held that the phrase "genuine hardship" should be construed liberally particularly when the legislature had conferred the power to condone the delay to enable the authorities to do substantive justice to the parties by disposing the matte....
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....r the taxation matters of the petitioner. The Madras High Court in the case of Seshammal (R) v. ITO MANU/ TN/ 0879/ 1998: (1999) 237 ITR 185 (Madras), was pleased to observe as under: This is hardly the manner in which the State is expected to deal with the citizens, who in their anxiety to comply with all the requirements of the Act pay monies as advance tax to the State, even though the monies were not actually required to be paid by them and thereafter seek refund of the monies so paid by mistake after the proceedings under the Act are dropped by the plea of limitation in such a situation to avoid return of the amounts. Section sit of the Act vests ample power in the Board to render justice in such a situation. The Board has acted arbitrarily in rejecting the petitioner's request for refund. 15. The phrase "genuine hardship" used in Section 119(2)(b) should have been construed liberally even when the petitioner has complied with all the conditions mentioned in Circular dated 12th October, 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 m....
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....assed by the CBDT but only with the approval of the Member (IT & R), CBDT. So also in the case of TATA Autocomp (supra) wherein paragraphs 11, 12 and 13 read as under: "11. Moreover, the order says, "This issues with the approval of Member (IT&R), Central Board of Direct Taxes" and is signed by one Virender Singh, Additional Commissioner of Income Tax (ITA Cell), CBDT, New Delhi. If a personal hearing has been granted by the Member (IT&R), the order should have been passed by him. Mr. Sharma states there could be file notings. If that is so, that has not been made available to Petitioner. 12. In the circumstances, on these two grounds alone, we quash and set aside the impugned order dated 5th December 2023 and remand the matter to CBDT. The Member/Members shall within three weeks from the date this order is uploaded make available to Petitioner all Field Reports/ documents/ instructions received by the CBDT from the Field Authorities and within two weeks of receiving the same, Petitioner shall file, if advised, further submissions in support of their application for condonation of delay. 13. Thereafter, an order shall be written, passed and that order sha....