Filing subsequent ITRs in time no reason for rejecting petition u/s 119(2)(b) to condone the delay for return filing for claiming refund – High Court
ABCAUS Case Law Citation:
ABCAUS 2484 (2018) 08 HC
The instant petition was filed by assessee against the rejection of its petition u/s 119(2)(b) of the Income tax Act, 1961 9the Act) for condoning the delay in filing return of income by the Commissioners of Income Tax as authorised by the Central Board of Direct Taxes as contemplated in Circular No.670 dated 26.10.1993.
Under Section 119(2)(b) of the Act, the Central Board of Direct Taxes has powers to, either by general or special order, authorise any income tax authority to admit an application or claim for any exemption, deduction, refund or any other relief, after the expiry of the period specified under the Act for making such application or claim and deal with the same on merits and in accordance with law.
Such authorisation has been given by the Central Board of Direct Taxes vide instructions No. 13/2006, dated 22.12.2006, whereby Commissioners of Income Tax have been authorised to admit the application for condoning the delay for claim of refunds not exceeding Rs.10 lakhs.
Now, the online filing of application u/s 119(2)(b) for condonation of delay has also been enabled.
The petitioner had filed return of income before the CIT making a claim for refund. The income tax return was filed after the due dates for filing return under Sections 139(1) and 139(4) of the Act. Therefore, an application under Section 119(2)(b) of the Act, was filed by the petitioner before the Commissioner to condone the delay in filing the return of income and seeking refund of income.
The specific averment of the petitioner was that he was not able to file return of income in time due to heavy losses suffered in the business in the subsequent year. The CIT by impugned order, rejected his application to condone the delay in filing income tax return stating that the petitioner had filed return for the subsequent years in time and therefore, he was aware of the statutory obligation to file income tax return within the time limit prescribed under Sections 139(1) and 139(4) of the Act and hence, the reason stated by the petitioner that he was suffering from financial burden in the business, was not convincing.
As against the said order, the petitioner had filed the instant writ petition.
The Income Tax Department contended that since there was a standing order by the authorities not to consider the application for refund submitted beyond the time limit, such claim of the petitioner made after the prescribed period cannot be considered, for the reason that the petitioner had filed return for the subsequent years in time and therefore, he was aware of the statutory obligation to file the return within the time limit prescribed under Sections 139(1) and 139(4) of the Act. Secondly, the burden will be cast upon the department to pay interest on the refund amount.
The petitioner agreed that he will not claim interest for the refund amount.
The Hon’ble High Court observed that the petitioner had filed income tax return for the subsequent years in time, that could not be the reason for rejecting his application to condone the delay in filing income tax return, especially when authorisation had been given to the income tax authority to admit the application for condoning the delay for claim of refund in alike cases.
Therefore the Hon’ble High Court set aside the impugned order passed by the Commissioner of Income Tax and directed him to consider the petitioner’s application for refund. Also it was directed that the petitioner was not entitled to interest for the refund amount, if any.