CBDT powers u/s 119 to condone delay in filing Form-10 and ITR. CBDT to consider amendments made in Section 11 and 13 and pass necessary order- High Court
ABCAUS Case Law Citation:
ABCAUS 2634 (2018) (11) ITAT
The Petitioner had filed two Writ Petition challenging the order passed by the Commissioner of Income Tax (Exemptions) and seeking a writ of mandamus to the Central Board of Direct Taxes (CBDT) to consider and decide the petitioner’s application filed under Section 119(2)(b) of the Income Tax Act, 1961 (the Act).
The petitioner was a trust and registered for exemption under Section 12 (A) of the Act. However, in order to avail the benefit of exemption of its income from tax, as per Section 11 of the Act, it was required to submit Form-10 and the income-tax return.
In the relevant Assessment Year amendments was made in Section 11 (2) of the Act as also Section 13(9) of the Act by which such exemptions was made admissible only if Form-10 and the income-tax return, both, are filed within the time stipulated in Section 139 (1) of the Act.
In view of the fact that no income-tax return was filed within the time prescribed under Section 139 (1) of the Act, being conscious of the fact of the amendment to section 13(9) disentitling it for exemption, the petitioner as far as the Form-10 aspect is concerned filed the writ petition seeking a direction to the CBDT to decide its application exercising its powers vested under Section 119 of the Act
Also, with regard to the filing of the income-tax return, as, to its understanding, the circular of the CBDT dated 3.6.1980, by which the powers to condone the delay in this regard had been delegated to the Commissioner, the petitioner approached the Commissioner of Income-tax (Exemptions), who had passed the order rejecting the application in view of the amendments made in Section 13 (9) of the Act.
The petitioner relied upon the provisions of Section 119 of the Act to contend that there is a power vested in the CBDT to condone such delay and accept such Form-10 and income-tax return even beyond the time prescribed in the aforesaid provision.
It was submitted that this is a separate provision, which is not curtailed in any manner by the amendments made and therefore, a direction be issued to the CBDT to consider the application submitted by the petitioner in this regard or to be submitted hereinafter.
The Hon’ble High Court observed that there was no dispute about the fact that in view of the amendments made in Section 11 (2) and Section 13 (9) of the Act, the exemptions under Section 11 of the Act to a trust recognized under Section 12 (A) of the Act would be admissible only if the Form-10 and income-tax returns are filed within the time prescribed under Section 139 (1) of the Act.
The Hon’ble High Court found that the power vested in CBDT u/s 119 is a discretionary power to be exercised by it if it considers desirable and expedient for avoiding genuine hardship in any case or class of classes, therefore, in such a matter it would not be appropriate for the High Court to issue direction to the CBDT to decide the application of the petitioner on merits instead the petitioner is at liberty to move an appropriate application before the CBDT referring to the provisions of Section 119 and other relevant provisions, claiming the relief as may be permissible therein.
The Hon’ble High Court stated that on the Petitioner approaching the CBDT, it shall look into the matter, consider the amendments made in Section 11 and 13 of the Act as also the provisions of Section 119 and if it finds that it is a case, which falls within the purview of the said provisions and is fit for interference, it may pass such order as it may deem necessary in the facts and circumstances of the case.
The Hon’ble High Court clarified that however, if CBDT feels that it is not a case of interference under Section 119, then, a reasoned order in this regard shall be passed and communicated the petitioner.
The Hon’ble High Court noted that since the petitioner had already approached the CBDT u/s 119 of the Act for the condonation of delay in filing the return of income, the CBDT may consider the same and take appropriate decision in the light of the observations made within a month.
As regards Form-10, the Hon’ble High Court opined that as no such application had been submitted and therefore the Commissioner who has passed the impugned order cannot be faulted for having done so as he did not have the power to condone the delay in this regard,
Therefore, without interfering with its order the Hon’ble High Court provided that the petitioner may submit an application to the CBDT within a week, whereupon the same shall also be considered and decided within the next one month.
Both the writ petitions were disposed off.