Condonation of delay u/s 119(2)(b) for filing revised return to avail benefits u/s 44ADA

PCIT directed to consider condonation of delay u/s 119(2)(b) in filing revised return to availing benefits of section 44ADA

In a recent case, the High Court quashed order u/s 119(2)(b) rejecting condonation of delay for filing revised return to claim refund by availing benefits of presumptive taxation u/s 44ADA of the Act

ABCAUS Case Law Citation:
5210 (2026) (08) abacus.in HC

In the instant case, the for the assessment year 2019-20, the Petitioner while filing the return took the benefit of Section 44ADA of the Income Tax Act, 1961 (the Act) which provides for special provision for computing profits and gains of profession on presumptive basis.

According to the Petitioner he became aware about the provision of Section 44ADA of the Act upon filing the return for the assessment year 2019-20 and therefore, wanted to file revised returns claiming similar benefits on the basis of Section 44ADA for the preceding two assessment years 2017-18 and 2018-19.

As the time period for filing the revised returns for these two assessment years had expired, the Petitioner submitted an application u/s 119(2)(b) of the Act for condonation of the delay in filing revised returns for claiming refunds for the said two assessment years.

However, the application for condonation of delay in filing the revised returns were rejected by the Principal Commissioner of Income Tax (PCIT) by assigning the reason that the rejection was in the light of Section 119(2)(b) and that the Petitioner did not fulfill the criteria laid down in the CBDT Circular No. 9/2015 dated 09.06.2015.

Aggrieved, the Petitioner therefore approached the Hon’ble High Court by filing a writ petition.

It was submitted that  mere perusal of Section 119(2)(b) of the Act shows that the CBDT 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 authorize any Income Tax Authority to admit an application or claim for an exemption, deduction, refund or any other relief after the expiry of the period specified by or under the Act for making such application or claim and deal with the same on merits in accordance with law.

It was further submitted that PCIT has been vested with the power of acceptance/rejection of such application or claim. An absolute bar is imposed on entertaining a condonation application for claim of refund/loss beyond 6 years from the end of the assessment year for which such application is made. Further ther is no bar stipulated in the said Circular No. 9/2015 that if the revised return is not being filed, the condonation application would not be taken into consideration.

The Department contended that merely because of the fact that the Petitioner had come to learn about the benefits of Section 44ADA of the Act at the time of filing the returns for the assessment year 2019-20, the same cannot be a ground for permitting the Petitioner to file belated revised returns.

The Hon’ble High Court observed that PCIT had concluded that the Petitioner’s case did not satisfy the conditions prescribed under the Circular No. 9/2015 for exercise of powers under Section 119(2)(b) of the Act. It was further mentioned that merely by filing an application under Section 119(2)(b) of the Act of 1961 did not confer any automatic or vested right to condonation and the power thereunder is discretionary in nature to be exercised in accordance with the statutory framework and the guidelines issued by the CBDT.

The Hon’ble High Court noted that as per the said Circular that there is a clear embargo not to entertain any condonation application for claim of refund/loss beyond 6 years from the end of the assessment year for which such application or claim is made. It is stipulated that the limit of 6 years shall be applicable to all Authorities having powers to condone the delay as per the prescribed monetary limits including the Board.

The Hon’ble High Court further observed that in the instant case, the claim for submission of the revised returns was within 6 years as per the Circular dated 09.06.2015, there was no embargo in entertaining the application for condonation of delay.

The Hon’ble High Court noted that no specific reason had been assigned except stating that the rejection was on account of the Circular dated 09.06.2015. The Circular dated 09.06.2015, however, not in absolute terms prohibit the condonation of delay except in a case where the period is more than six years from the end of the assessment year. Therefore, the impugned orders had been passed without proper application of mind and assigning cogent reasons.

The Hon’ble High Court further observed that in the affidavit-in-opposition the reason assigned was that the Petitioner did not submit the revised returns within the time permitted.

The Hon’ble High Court opined that the said reason was also without any basis and reflects complete non-application of mind in as much as had the Petitioner submitted the revised returns within the time permitted, there was no occasion for the Petitioner to submit the application for condonation of delay. Therefore, orders rejecting the Petitioner’s application for condonation of delay were not sustainable in law.

The Hon’ble High Court further added that it is also well settled that an application for condonation of delay should be considered liberally and not by taking a hyper technical view.

Accordingly, Hon’ble High Court allowed the Petition and  set aside and quashed the impugned orders and PCIT was directed to consider the application for condonation of delay afresh keeping in mind the settled principle of law as observed in the judgment.

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