Condonation of delay under section 119(2)(b) of the Income Tax Act, 1961 in filing of Return of Income

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.