If assessee does not file the return before due date then
Belated Income Tax Return under section 139(4) can be filed until the end of
the assessment year. But if, Taxpayer missed the Income Tax Return
filing deadline (both Normal & belated due date) and Income Tax Refund
claim was due, Central Board of Direct Taxes has given the powers to
income tax authorities to accept the income tax return for a financial year
even after the expiry of due date of the same by using its powers as laid down
under section 119(2)(b) of the Income Tax Act. In other words, if assessee
wants to file income tax returns for a financial year, whose due date of filing
income tax return and due date of filing belated income tax return has elapsed,
he needs to file income tax return under section 119(2)(b).
Section 119 empowers the Central Board of Direct Taxes
(CBDT) 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 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. However, such claims will only be allowed by the income tax
authority provided, making such a claim within the prescribed due date was
genuinely out of the control of the taxpayer.
Text of Section 119(2)(b)
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 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;
(c) 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 for reasons to be
specified therein, relax any requirement contained in any of the provisions of
Chapter IV or Chapter VI-A, where the assessee has failed to comply with any
requirement specified in such provision for claiming deduction thereunder,
subject to the following conditions, namely:—
(i) the default
in complying with such requirement was due to circumstances beyond the control
of the assessee; and
(ii) the assessee
has complied with such requirement before the completion of assessment in
relation to the previous year in which such deduction is claimed :
PROVIDED that
the Central Government shall cause every order issued under this clause to be
laid before each House of Parliament.
The provisions of Section 119(2)(b)
allow admitting the claim submitted after the expiry of the
period for:
(a)
Exemption
(b)
Deduction
(c)
Refund, or
(d)
Other relief under the Act
Procedure
to claim the refunds
In exercise of the powers under section 119(2)(b) of the Income-tax Act, 1961, the Central Board of Direct Taxes (CBDT) issued Circular No. 9/2015, dated 09.06.2015 under which an assessee can apply to the appropriate authority for the condonation of delay in filing the returns to claim the following reliefs in case of genuine reasons for the delay:
(a) Claiming of refund(s) for any relevant Assessment Year; and
(b)
Claiming of carry forward of loss and set-off thereof for any relevant Assessment
Year.
Authorities who can grant or reject such condonation applications
Applications
for claim of refund or carry forward of losses can be accepted beyond the due
date according to Section 119. However, certain guidelines for accepting or
rejecting these applications have been set out by the CBDT vide its Circular No. 9/2015, dated 09.06.2015.
The following authorities empowered on the basis of limit of claims made
by the assessee by application addressed to these authorities:
|
S. No. |
Monetary
Limit of claims made by the Assessee (in Rs.) |
Authorities to which have been
empowered or to whom application to be made |
|
(i) |
Where the amount of claim is not
more than Rs. 10,00,000 |
Principal Commissioners of
Income-tax/ Commissioners of Income-tax |
|
(ii) |
Where the amount of claim is more
than Rs. 10,00,000 but less than Rs. 50,00,000 |
Principal Chief Commissioners of
Income-tax/ Chief Commissioners of Income-tax |
|
(iii) |
Where the amount of claim is more
than Rs. 50,00,000 |
CBDT itself |
Conditions
prescribed for Acceptance/Rejection of Income Tax Refund Claim
The powers of acceptance/rejection
of the application within the monetary limits delegated to the Principal Chief Commissioners
of Income-tax or Chief Commissioners of Income-tax or Principal Commissioners
of Income-tax or Commissioners of Income-tax in case of such claims will be
subject to following conditions:
(i)
INCOME/ LOSS DECLARED AND/ OR REFUND CLAIMED IS CORRECT AND GENUINE
At the time of considering the case
under Section 119(2)(b), it shall be ensured that the income/loss declared
and/or refund claimed is correct and genuine and also that the case is of
genuine hardship on merits.
(ii) The case is of genuine hardship on merits i.e.
the delay in filing was due to reasonable cause.
(iii) The Principal Chief
Commissioners of Income-tax or Chief Commissioners of Income-tax or Principal
Commissioners of Income-tax or Commissioners of Income-tax dealing with the
case shall be empowered to direct the jurisdictional assessing officer to make
necessary inquiries or scrutinize the case in accordance with the provisions of
the Act to ascertain the correctness of the claim.
Supplementary
(Additional) Claim of Income Tax Refund after completion of assessment
A belated application for
supplementary claim of refund (claim of additional amount of refund after
completion of assessment for the same year) can be admitted for condonation
provided other conditions as referred above are fulfilled. The powers of
acceptance/rejection within the monetary limits delegated to the The Principal
Chief Commissioners of Income-tax or Chief Commissioners of Income-tax or
Principal Commissioners of Income-tax or Commissioners of Income-tax in case of
returns claiming refund and supplementary claim of refund would be subject to
the following further conditions:
(i) Income of the assessee not assessable in
hands of any other person,
(ii) No interest under section 244A will be
admissible on belated claim of refunds; and
(iii) Such refund has arisen as a result of excess tax
deducted/collected at source (TDS/ TCS) or excess Advance Tax payment and or excess
payment of Self-assessment Tax payments as per the provisions of the Act.
Time limit for filing Application
The
assessees to file an application for making a claim of refund or carry
forward of loss within next 6 years from the end of the relevant assessment
year. In other words, no condonation application for claim of refund
or carry forwarded of loss shall be entertained beyond six years from the end
of the assessment year for which such application/claim is made. This limit of
six years shall be applicable to all authorities having powers to condone the
delay as per the above prescribed monetary limits, including the Board.
For example : Mr ‘A’ wants to claim a refund which he failed to claim by
not filing his return due to his health conditions in Financial year 2017-18 (Assessment
year 2018-19) for Rs. 3,50,000 and decided to files an application to Principal
Commissioner of Income Tax for allowing him to file his income tax return for
the relevant assessment year. He will be able to file this application anytime
on or before 31 March 2025.
Time limit
for processing Application
A condonation application should be
disposed of within six months from the end of the month in which the
application is received by the competent authority, as far as possible.
For example : Mr ‘A’ files the application for relief on 21st June 2020
the concerned authority shall accept and close or reject the application by
31st December 2020.
Extended Time limit for Filing Application
In a case
where refund claim has arisen consequent to a Court order, the period for which
any such proceedings were pending before any Court of Law shall be ignored
while calculating the said period of six years, provided such condonation
application is filed within six months from the end of the month in which the
Court order was issued or the end of financial year whichever is later.
In other words, if any refund is
given to any person on the basis of any such relief by the court, then the
period for which court case was pending will not be considered for calculating
6 years of time. This period is ignored only where an application has been
filed within 6 months from the end of the month of the court’s order or end of
the relevant financial year – whichever is later.
To
whom such application be submitted
A condonation application can be
submitted to the respective appropriate authorities. Alternatively, an assessee
can submit the application in the Aaykar Seva Kendra (ASK) which seems to be
much convenient procedure.
Where
to file return under section 119(2)(b)
Return under section 119(2)(b) can
be filed electronically by the taxpayer on the website
www.incometaxindiaefiling.gov.in by log in using E filing User ID and Password.
Procedure to file Return under
section 119(2)(b)
One receiving the order of
acceptance of claim applied, the Taxpayer can file return under section
119(2)(b) from income tax e-filing website by following the below steps :
Step - I : Login to your income tax e-filing portal
Visit the official website of the Income
Tax portal at the income tax e-filing portal and log in using valid user-id credentials.
Step - II : Go to the “e-file” tab and select “Income tax
returns” from the drop-down menu.
Step
- III : After login Go to the “e-file”
tab and select “Income tax returns” from the drop-down list.
Select the assessment
year and for which you have to file the return under this section.
Step - IV : Then,
After Selecting choose the filing type as “Filing against
notice/order”.
Step - V : And then Select
the filing section as “139 read with section 119(2)(b)”
Step - VI : After successfully providing
the above details, then, upload an XML and file your
return by verifying it.
KEY NOTE
Select
section 139(4) i.e belated return while filling up the income tax form.
CBDT Circular No. 06/2020, dated 19.02.2020
Subject : Condonation of delay
under section 119(2)(b) of the Income-tax Act, 1961 in the filing of Return of
Income for Assessment years 2016-17, 2017-18, and 2018-19 and Form No. 9A and Form No. 10.
Representations
have been received seeking condonation of delay in filing Return of Income by
the Charitable institutions for the Assessment Year 2016-17 onwards on the
grounds of hardship. The Board has issued Circulars authorizing the
Commissioners of Income Tax to admit belated applications of Form 9A and Form
10 and to decide on merit the condonation of delay under section 119(2)(b) of
the Income-tax Act, 1961 (Act). However, in those cases where the Income Tax
Returns have also been filed beyond the due date prescribed under section
139(1) of the Act, the condonation of delay in filing of Form 9A & Form 10
by the Commissioners is not of any help to the assessee, as section 13(9) of
the Act, inserted w.e.f. 01.04.2016, stipulates twin conditions of filing of
Fonn 9A/Fonn 10 and also of filing Return of Income before the due date.
2.
Accordingly, in continuation of earlier Circulars issued in this regard, with
the view to prevent hardship to the assessee and in exercise of powers
conferred under section I19(2)(b) of the Act, the CBDT has decided that where
the application for condonation of delay in fi lingForm 9A and Form 10 has been
filed, and the Return of Income has been filed on or before 31 S1 March of the
respective assessment years i.e. Assessment Years 2016-17, 2017-18 and 2018-19,
the Commissioners of Income-tax (Exemptions) arc authorized 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.
3.
For all other applications for condonation of delay not mentioned above, the
power of condonation of delay under section 119(2)(b) of the Act will continue
with the respective authorities as per the extant Rules and Practice.
CBDT Circular No. 9/2015, dated
09.06.2015
Subject
: Section 119 of the Income-tax Act, 1961 - Income-tax authorities -
instructions to subordinate authorities - Condonation of delay in filing refund
claim and claim of carry forward losses under section 119(2)(b)
In
supersession of all earlier Instructions/Circulars/Guidelines issued by the
Central Board of Direct Taxes (the Board) from time to time to deal with the
applications for condonation of delay in filing returns claiming refund and
returns claiming carry forward of loss and set-off thereof under section
119(2)(b) of the Income-tax Act, (the Act) the present Circular is being issued
containing comprehensive guidelines on the conditions for condonation and the
procedure to be followed for deciding such matters.
2. The
Principal Commissioners of Income-tax/Commissioners of Income-tax
(Pr.CsIT/CsIT) shall be vested with the powers of acceptance/rejection of such
applications/claims if the amount of such claims is not more than Rs.10 lakhs
for any one assessment year. The Principal Chief Commissioners of Income-tax/Chief
Commissioners of Income-tax (Pr.CCsIT/CCsIT) shall be vested with the powers of
acceptance/rejection of such applications/claims if the amount of such claims
exceeds Rs.10 lakhs but is not more than Rs. 50 lakhs for any one assessment
year. The applications/claims for amount exceeding Rs.50 lakhs shall be
considered by the Board.
3. No
condonation application for claim of refund/loss shall be entertained beyond
six years from the end of the assessment year for which such application/claim
is made. This limit of six years shall be applicable to all authorities having
powers to condone the delay as per the above prescribed monetary limits,
including the Board. A condonation application should be disposed of within six
months from the end of the month in which the application is received by the
competent authority, as far as possible.
4. In
a case where refund claim has arisen consequent to a Court order, the period
for which any such proceedings were pending before any Court of Law shall be
ignored while calculating the said period of six years, provided such
condonation application is filed within six months from the end of the month in
which the Court order was issued or the end of financial year whichever is
later.
5. The
powers of acceptance/rejection of the application within the monetary limits
delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/CsIT in case of such claims will be
subject to Following conditions:
|
i. |
|
At the time of considering the case under Section
119(2)(b), it shall be ensured that the income/loss declared and/or refund
claimed is correct and genuine and also that the case is of genuine hardship
on merits. |
|
ii. |
|
The Pr.CCIT/CCIT/Pr.CIT/CIT dealing with the case shall be
empowered to direct the jurisdictional assessing officer to make necessary
inquiries or scrutinize the case in accordance with the provisions of the Act
to ascertain the correctness of the claim. |
6. A
belated application for supplementary claim of refund (claim of additional
amount of refund after completion of assessment for the same year) can be
admitted for condonation provided other conditions as referred above are
fulfilled. The powers of acceptance/rejection within the monetary limits
delegated to the Pr.CCsIT/CCsIT/Pr.CsJT/CsIT in case of returns claiming refund
and supplementary claim of refund would be subject to the following further
conditions:
|
i. |
|
The income of the assessee is not assessable in the hands
of any other person under any of the provisions of the Act. |
|
ii. |
|
No interest will be admissible on belated claim of
refunds. |
|
iii. |
|
The refund has arisen as a result of excess tax
deducted/collected at source and/or excess advance tax payment and/or excess
payment of self-assessment tax as per the provisions of the Act. |
7. In
the case of an applicant who has made investment in 8% Savings (Taxable) Bonds,
2003 issued by Government of India opting for scheme of cumulative interest on
maturity but has accounted interest earned on mercantile basis and the
intermediary bank at the time of maturity has deducted tax at source on the
entire amount of interest paid without apportioning the accrued interest/TDS,
over various financial years involved, the time limit of six years for making
such refund claims will not be applicable.
8. This
circular will cover all such applications/claims for condonation of delay under
section 119(2) (b) which are pending as on the date of issue of the Circular.
9. The
Board reserves the power to examine any grievance arising out of an order
passed or not passed by the authorities mentioned in para 2 above and issue
suitable directions to them for proper implementation of this Circular.
However, no review of or appeal against the orders of such authorities would be
entertained by the Board.
INSTRUCTIONS TO SUBORDINATE AUTHORITIES -
AUTHORISATION REGARDING CONDONATION OF DELAY IN FILING REFUND CLAIM
1
ORDER [F. NO. 225/208/93-IT(A-II)], DATED 26.10.1993
Section
119(2)(b) of the Income-tax Act, 1961 - Central Board of Direct Taxes -
Instructions to subordinate authorities - Authorisation regarding condonation
of delay in filing refund claim
1. I am directed to enclose a copy
of the order under section 119(2)(b) from file of even number dated
12-10-1993 (see Annex One) and also the Circular No. 670 (Annex
Three) of even date from the same file.
2. In this context, I have been
directed to draw your attention to Instruction No. 1867, dated 30-11-1990
(see Annex Two) and to inform you that paras 2, 3 and
4 of the said Instruction shall continue to be applicable. The Chief Commissioner/Director
General/Commissioner of Income-tax/Director of Income-tax should not only see
that the conditions laid down by the various Circulars of the Board are
satisfied, but should also look further into the facts of the case and examine
other aspects such as the source of income, whether the income returned is
reasonable considering the extent of profits disclosed, whether books of
account had been maintained and whether there was any manipulation of accounts
in the course of the delayed filing of the claim of refund, etc., for deciding
the genuineness of the claims.
3. The powers delegated under
section 119(2)(b) should be invoked only in suitable cases after
scrutiny as suggested above and the claim should not be disposed of in a
routine manner.
ANNEX ONE
ORDER [F. NO. 225/208/93-IT(A-II)], DATED 12.10.1993
1. In continuation of earlier
orders dated 5-2-1988 and 17-8-1988 issued from F. No. 225/201/87-IT(A-II), the
Central Board of Direct Taxes, in exercise of the powers conferred by clause (b)
of sub-section (2) of section 119 of the Income-tax Act, 1961, hereby order
that, in all cases where an otherwise valid refund claim under section 237 of
the Income-tax Act, 1961, is filed by an assessee after the expiry of the
statutory time limit prescribed under section 239 of the Act, the Assessing
Officer, having jurisdiction over the case, may admit the said refund claim and
dispose of the same on merits and in accordance with law provided the following
conditions are satisfied :
(i ) the
refund arises as a result of excess tax deducted at source, collected at source
and payments of advance tax under the provisions of Chapters XVII-B, XVII-BB
and XVII-C respectively and the amount of refund does not exceed Rs. 1 lakh for
any assessment year;
(ii ) the
returned income is not a loss where the assessee claims the benefit of carry
forward of the loss;
(iii ) the
refund claimed is not supplementary in nature, i.e., claim for
additional amount of refund after the completion of the original assessment for
the same assessment year; and
(iv ) the
income of the assessee is not assessable in the hands of any other person under
any of the provisions of the Act.
This order
will be effective from 1-11-1993.
ANNEX TWO
INSTRUCTION NO. 1867, DATED 30.11.1990
1. Reference is invited to the
earlier instructions/circulars issued by the Board regarding condonation of
delays in claiming refunds, etc., by invoking the provisions of section 119(2)(b)
of the Income-tax Act, specifically the following :
(i ) Instruction
No. 1795, dated 17th August, 1988 and Letter No. 225/263/88-IT(A-II), dated
23rd January, 1989 stating that the Assessing Officer shall, before
entertaining a belated refund claim, obtain the prior approval of the Commissioner
of Income-tax where the refund claim does not exceed Rs. 1,000 and of the Chief
Commissioner of Income-tax/Director General of Income-tax where the refund
exceeds Rs. 1,000 but does not exceed Rs. 10,000; and
(ii ) Order
No. 225/201/87-IT(A-II), dated 5-12-1988 clarifying that the Board has
delegated the power to condone the delay in case the refund does not exceed Rs.
10,000, provided the Chief Commissioner of Income-tax/Director General of
Income-tax or the Commissioner of Income-tax as the case may be, is satisfied
that the conditions laid down in the various instructions/circulars on the
subject are satisfied. However, such delegation was restricted to condonation
of delay and not rejection thereof.
2. Some Chief Commissioners have recommended
the cases of contractors and other persons engaged in business, who had made
applications under section 119(2)(b) of the Income-tax Act for the
purpose of claiming refunds of income-tax deducted at source from contract
receipts, etc., for rejection as they were not satisfied that the income
returned by the said persons was full and true or even reasonable considering
the extent of profit disclosed. It was also noticed that such persons were not
maintaining any books of account and, therefore, the possibility of purposely
delaying the filing of the returns so as to avoid scrutiny by the Department
could not be ruled out. Needless to say that such cases were not found to be of
genuine hardship.
3. The Board has been accepting
such recommendations as it would be against public policy to condone such
delays thereby giving an extended time to such assessees to manipulate their
accounts so as to evade taxes.
4. The Board now desire that the
Chief Commissioners/Directors General/Commissioners should not only see that
the conditions laid down by the various Board’s circulars are satisfied, but
also look further into the facts of the case and examine the source of income,
whether the income has been reflected in other years or not whether there is
any scope for manipulation of accounts due to the delay in filing the claim of
refund, etc., before applying the provision of section 119(2)(b) of the
Income-tax Act. It is desired that only genuine cases should be considered for
the purpose of applying the provisions of section 119(2)(b) of the Act
and the applications should not be disposed of in a routine manner.
ANNEX THREE
CIRCULAR NO. 670, DATED 26.10.1993
1. I am directed to forward
herewith the order contained in F. No. 225/208/93-IT(A-II), dated 12th October,
1993, passed by the CBDT in exercise of the powers conferred on it under
section 119(2)(b) of the Income-tax Act. By virtue of this order the
Assessing Officers can admit belated refund claims under section 237 of the
Income-tax Act in cases where refunds may arise as a result of tax
deducted/collected at source and advance tax payments where the amount of such
refund does not exceed Rs. 1 lakh for any assessment year.
2. Board have also decided that in
such cases—
(i) where the
refund does not exceed Rs. 10,000 for any assessment year the Assessing Officer
shall obtain the prior approval of the CIT before entertaining a belated refund
claim; and
(ii) where the refund
exceeds Rs. 10,000 but does not exceed Rs. 1,00,000 for any assessment year the
Assessing Officer shall obtain the prior approval of CCIT or DGIT before
entertaining a belated refund claim.
3. The CCIT/DGIT/CIT, as the case
may be, shall ensure that the conditions laid down under Board’s order under
section 119(2)(b) referred to above are fulfilled.
4. Where a Chief Commissioner of
Income-tax/Director General of Income-tax/Commissioner of Income-tax/Director
of Income-tax finds that the four conditions laid down in the order under
section 119(2)(b), dated 12-10-1993 are satisfied but still it is not a
case of "genuine hardship", he should refer the belated refund
application to the Board for final decision.
5. This order is effective from 01.11.1993 and will apply to all claims of refund pending as on that date and
also in respect of all refund claims filed on or after that date.
CLARIFICATION
1. The procedure for dealing with
the applications for condonation of delay in filing returns and claiming refund
is presently governed by the Board’s earlier orders/circulars issued under section
119(2)(b) of the Income-tax Act, 1961, namely, F. No. 225/208/93-ITA-II,
dated 12-10-1993 read with Board’s Circular No. 670, dated 26-10-1993 issued
from F. No. 225/208/93-ITA-II and also Circular No. 8/2001, dated 16-5-2001
issued from F. No. 212/35/99-ITA-II. As per the existing procedure laid down by
the aforesaid orders/circulars, the powers of condonation of delay are
exercisable by Commissioners of Income-tax if the claim is below Rs. 10,000,
and by the Chief Commissioners of Income-tax if it is above Rs. 10,000 and up
to Rs. 1,00,000. In respect of cases where amount involved is more than Rs.
1,00,000, the applications/requests are dealt with and decided by the Board in
accordance with the powers vested in the Board.
2. The matter regarding delegation
of powers for acceptance/rejection of applications, requests for condonation of
delay under section 119(2)(b) of the Income-tax Act, 1961 has been
receiving the attention of the Board. In modification of the aforesaid
orders/circulars, the Board has decided to vest the CCIT with the powers of
acceptance/rejection of such applications requests involving refund
claims upto Rs. 5,00,000, and the decision of the CCIT would be final. The CIT
will have the powers of acceptance/rejection in cases involving refund claims
up to Rs. 1,00,000. However, cases involving refund claims exceeding Rs.
5,00,000 would continue to be processed by the Central Board of Direct Taxes,
both for acceptance and rejection.
3. It has also been decided that
cases where delayed claims of refunds are being considered would be taken up
for scrutiny.
4. The powers of
acceptance/rejection within the monetary limits delegated to the CCIT as above
would be subject to the following conditions :
(i ) the
refund has arisen as a result of excess tax deducted/collected at source and
payments of advance tax under the provisions of Chapters XVIIB, XVIIBB and
XVIIC, respectively and the amount of refund does not exceed Rs. 5,00,000 for
any one assessment year;
(ii ) the
income of the assessee is not assessable in the hands of any other person under
any of the provisions of the Act;
(iii ) no
interest will be admissible on the belated refund claims;
(iv ) if
the refund arises from the return of income filed for the first time, then the
CCIT will be empowered to direct the Assessing Officer to make a regular
assessment under section 143(3) and then issue the refund, if any;
(v ) no
claims under this provision will be entertained where a period of more than 6
assessment years prior to the current assessment year has elapsed;
(vi ) these
instructions will cover the requests for condonation of delay under section
119(2)(b) where such requests have been filed in the Board, or have been
forwarded to the Board by CCIT/DGIT.
These
instructions would, however, not cover cases prior to assessment year 1996-97.
CBDT Instruction No. 12/2003, dated 30.10.2003.
Condonation
of delay in filing returns - Reasonable cause
Where assessee an NRI could not
file return in time due to financial criss in USA and sustaining injuiries by
her in accident and also old age problems, the delay of 1232 days was to be
condoned.--Assessee, an NRI, residing permanently at USA filed petition for
condonation of delay of 1,232 days in filing returns under section 119(2)(b)
before CCIT on grounds that there was severe financial criss in USA and
injuiries sustained by her in accident as well as age-related problems. CCIT
rejected the application on ground that medical certificate did not support the
case of assessee to condone the inordinate delay of 1,232 days in filing
returns. Assessee filed a writ petition challenging the order passed by CCIT. Held: It was the case of assessee that
she was entitled for refund, being a non-resident owing to the recession at U.
S. and the accidental injuries suffered, no returns were filed within the
period prescribed. In the circumstances, it could not be held that the assessee
had obtained any undue advantage of the delay in filing the income tax returns.
It is trite law that rendering substantial justice shall be paramount
consideration of the Courts as well as the Authorities rather than rejecting on
hyper-technicalities. Sufficient cause shown by the assessee for condoning the
delay was acceptable and the same could not be rejected out-rightly on
technicalities. Considering the overall circumstances, the delay of 1,232 days
in filing the returns for the relevant assessment years in question was
condoned subject to denial of interest for the delayed period if found to be
entitled for refund. Respondent No. 3 was permitted to scrutinize the returns
in accordance with law, subject to the condition that assessee gave an
undertaking before this Court that she would not raise objections on the aspect
of limitation in the event any demand had to be made by the department rather
than making refund, as claimed, if found so, on concluding the assessments.
Such undertaking would be filed before this Court within a period of six weeks
from date of order. (Related Assessment years : 2010-11 to 2012-13 – [Dr. Sudha Krishnaswamy v. Chief CIT (2019)
414 ITR 144 : (2018) 255 TAXMAN 46 (Karn)]
The expression 'genuine hardship' should be
construed liberally, particularly in matters of entertaining of applications
seeking condonation of delay under section 119(2)(b)
(i)
The expression ‘genuine hardship’ came up for consideration of the Supreme
Court in case of B.M. Malani v. CIT 306
ITR 196 (SC), wherein, by reference to New
Collins Concise English Dictionary, the Supreme Court accepted the position
that ‘genuine’ means not fake or counterfeit, real, not pretending (not bogus
or merely a ruse). Further, a genuine hardship would, inter alia, mean a
genuine difficulty. The ingredients of genuine hardship must be determined
keeping in view the dictionary meaning thereof and legal conspectus attending
thereto. For the said purpose another well known principle, namely, that a
person cannot take advantage of his own wrong, may also have to be borne in
mind. Compulsion to pay any unjust dues per se would cause hardship. But a
question as to whether the default in payment of the amount was due to
circumstances beyond the control of assessee, also bears consideration.
(ii) 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
October 12,1993. 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 the merits. The expression “genuine” has received a liberal
meaning in view of the law laid down by the apex court referred to hereinabove
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 its claim late. Refusing to condone delay can result in a
meritorious matter being thrown out at the very threshold an 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 the merits after hearing the
parties. When substantial justice and technical considerations are pitted
against each other, the cause of substantial justice deserves to be preferred
for the other side cannot claim to have a vested right in injustice being done
because of a non-deliberate delay. There is no presumption that delay 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 runs a serious risk. The approach of the authorities should be justice
oriented so as to advance the cause of justice. (Related Assessment year : 1997-98)
– [Artist Tree (P) Ltd v. CBDT – Date of Judgement :
03.12.2014
(Bom)]
Specimen of Application for
condonation of delay in filing of
return claiming refunds exceeding Rs. 50,00,000
To
The
Central Board of Direct Taxes,
New Delhi.
Sir,
Subject :
Petition for condonotion of delay in filing Return and Claim of Refund. A.Y. ……..
We are
assessed to income-tax in Ward ……. as per the above mentioned PAN numbers. Our
Case falls within the jurisdiction of Chief Commissioner of Income Tax, ……….
We have
been assessed to Tax as a partnership firm upto the A Y …….. During the
previous year relevant to A Y ….. there was a dispute amongst the partners and
a retirement deed and new partnership deed was drawn up. However, the retiring
partner was reluctant to sign the partnership deed and as a result one of the
continuing partners had a reservation in signing the new deed. Further some of
the TDS Certificates and Advance Tax Challans required to be filed with the
return of Income were in the possession of the retiring partner. The return of
income could therefore not be filed as per the provisions of the Income Tax Act.
The
entire dispute was a subject matter Arbitration, before Justice ABC retired
judge of the …… High Court. The arbitration award has been now given and the
relevant documents are available for filing the return.
The total
refund due to the firm is Rs. …... We understand that as the prescribed time
limits have long been passed, the jurisdiction for admitting the return and the
claim of refund, now rests only with the Board, Hence this application is filed.
It may
further be appreciated that we were prevented from filing the return and
claiming the refund within the prescribed time limit, due to reasonable cause
and the non acceptance will cause genuine hardship to the firm.
Anticipating
a fovourable response.
Yours
truly,
For X Y Z & Co
Partner.
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