Case Law Details
Nilgiri Vanijya Private Limited Vs PCIT (Calcutta High Court)
The Calcutta High Court considered a writ petition challenging the legality of an order dated 18.02.2026 passed under Section 119(2)(b) of the Income-tax Act, 1961 for Assessment Year 2024-25. The principal issue was whether the Principal Commissioner of Income Tax (PCIT) was authorised to entertain an application for condonation of delay in filing Form 10-IC for AY 2024-25 in the absence of a specific CBDT circular authorising such condonation, when CBDT Circular No. 17/2024 dated 18.11.2024 covered only AYs 2020-21, 2021-22, and 2022-23.
The petitioner submitted that the delay in filing Form 10-IC was caused by genuine hardship and was neither intentional nor aimed at obtaining any undue advantage. It was argued that the power to condone delay under Section 119(2)(b) is a statutory power vested in the Board and specified authorities and is not restricted to particular assessment years. The petitioner further contended that CBDT Circular No. 17/2024 was merely an enabling circular for specified years and could not override or curtail the statutory provisions of the Act. It was also submitted that failure to consider the application on merits amounted to a failure to exercise jurisdiction.
The Income Tax Department submitted that the impugned order only rejected the application for condonation of delay and did not decide the petitioner’s eligibility under Section 115BAA. It further argued that the rejection was consistent with Section 119(2)(b) and CBDT Circular No. 17/2024, under which the PCIT was authorised to condone delays only for AYs 2020-21, 2021-22, and 2022-23.
After hearing both sides, the High Court found that the CBDT circular authorised the PCIT to condone delays in filing Form 10-IC only for the assessment years specifically mentioned in the circular. Since no circular existed for AY 2024-25, the Court held that the CBDT was the competent authority to consider the petitioner’s application under Section 119(2)(b).
Accordingly, the Court quashed and set aside the impugned order and directed the petitioner to file an appropriate application before the CBDT within three weeks. The CBDT was directed to consider the application within six weeks of its receipt, grant the petitioner an opportunity of hearing, pass a reasoned order in accordance with law, and communicate its decision within one week thereafter. The writ petition was disposed of without examining the merits of the case.
FULL TEXT OF THE JUDGMENT/ORDER OF CALCUTTA HIGH COURT
1. The affidavit of Service filed in Court is taken on record.
2. The petitioner in the instant case challenges inter alia, the legality and validity of the Order dated 18.02.2026 for the Assessment Year 2024-25 passed under Section 119 (2)(b) of the Income Tax Act, 1961 (hereinafter referred to as the said Act).
3. The core issue involved in the instant case is as to whether the Principal Commissioner of Income Tax (PCIT), the respondent No. 1 herein is the authorised officer to entertain the application for condonation of delay in filing Form 10-IC for Assessment Year 2024-25 in the absence of a specific CBDT Circular authorising condonation for that year when Circular No. 17/2024 dated 18.11.2025 only covers Assessment Years 2020-21, 2021-22, 2022-23.
4. The petitioner has a desirable reason causing genuine hardship which prevented timely filing of Form No. 10-IC. The delay was not intentional or designed to gain any undue advantage.
5. The Learned Counsel appearing for the petitioner submits that the power to condone delay under Section 119 (2)(b) is a statutory power vested directly in the Board and the specified authorities, including the respondent No. 1. The statute does not limit this power to any particular Assessment Year.
6. It is submitted CBDT Circular No. 17/2024 dated 18.11.2024 is an enabling circular issued to address wide spread hardship for Assessment Year 2020-21, 2021-22, 2022-23. It does not operate as a negated covenant to divest the respondent No. 1 of his statutory power to consider individual cases for other years. A circular cannot override or curtail the provisions of the Act as it held in DCIT Vs Pepsi Foods Limited reported at (2021) 433 ITR 2 95 Supreme Court.
7. It is further submitted where genuine hardship is pleaded the authority vested power under Section 119(2)(b) has a duty to exercise discretion as held in B.M. Malani Vs. CIT reported at 2008(306) ITR 196 Supreme Court. Refusal to entertain the application on merits is a failure to exercise jurisdiction and thus the Order dated 18.02.2026 is liable to be quashed and set aside.
8. The Learned Counsel appearing for the respondent Income Tax authorities submits that the impugned order has only rejected the application on the ground of condonation of delay and did not adjudicate upon the petitioner’s substantive eligibility under Section 115BAA of the said Act.
9. It is further submitted that the impugned Order dated 18th February 2026 is fully consistent with Section 119(2)(b) of the said Act as per the binding CBDT Circular No. 17/2024 dated 18th November 2024 and the settled principles governing delegated statutory authorities. Therefore, the order of rejection is sustainable in the eye of law.
10. As per CBDT Circular dated 18.11.2024, the authority to condone delay authorised by the CBDT pertains exclusively to Assessment Year 2020-21, 2021-22 and 2022-23. Respondent No. 1 is not authorised by Board for the Assessment Year involved herein i.e. 2024-25.
11. After hearing the parties and upon perusing the record this Court finds that as per the Circular dated 18th November 2024, the respondent No. 1 has been authorised to condone the delay under Section 119(2)(b) of the said Act in filing Form 10-IC exclusively for the Assessment Year 202021, 2021-22 and 2022-23. Since there is no relevant circular for deciding condonation of delay in filing Form 10-IC for the relevant Assessment Year 2024-25, the Board is a competent authority to consider and adjudicate the same.
12. As per Section 119(2)(b) of the said Act, CBDT is the competent authority to issue orders instructions and directions to the Income Tax authorities as it may deem fit for the purpose of the said Act. The legislature contemplates the board to be most authoritative body to issue orders and directions to the Income Tax authorities.
13. In view of the above, the Order passed under Section 119(2)(b) dated 18.11.2024 is hereby quashed and set aside directing inter alia the petitioner to file an appropriate application under Section 119(2)(b) of the said Act before the respondent no. 3 within a period of three weeks from the date of communication of this order and the Board shall consider the same within six weeks from the date of the receipt of the application to be filed by the petitioner and shall pass a reasoned order in accordance with law upon affording an opportunity of hearing to the petitioner and shall communicate such decision within a week there after.
14. With the above observation and direction the Writ Petition is disposed of without going into the merits of the case.
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