Bhatewara Associates Manik Vs Union of India (Bombay High Court)
Bombay High Court held that genuine hardship faced by the tax consultant which led to omission of timely filing of petitioner’s return sufficient cause for condonation of delay under section 119(2)(b) of Income Tax Act.
Facts- The petitioner under a joint venture with M/s. Sanghvi Premise Pvt. Ltd. developed a housing project which was entitled for deduction u/s 80IB(10) of the Income Tax Act. Deduction u/s 80IB(10) was duly granted for A.Y. 2010-11, 2012-13 and 2013-2014. However, in case of petitioner for A.Y. 2011-2012 the return of income remained to be filed in time by the Chartered Accountant.
It was submitted that the respective tax consultant overlooked the filing of ITR due to his son’s handicap coupled with innumerable medical emergencies in the year 2011.
The petitioner firm filed an application dated 11th October, 2019 u/s. 119 (2)(b) of the Act seeking condonation of delay in filing of the ITR for AY 2011-12 caused due to the said tax consultant, depriving the petitioner of a deduction of Rs. 2,42,88,917/- causing grave hardship to the said firm.
Aggrieved by the rejection of its application under Section 119(2)(b), by the CBDT, the petitioner has filed this petition.
Conclusion- The said tax consultant’s affidavit clearly setting out the circumstances which led to the omission to file the petitioner’s as well as the returns of around 28 other assessees for AY 2011-12
In our view, the affidavit of the income tax consultant, clearly setting out the circumstances which led to the omission to file the petitioner’s return for AY 2011-12, which has neither been disputed nor controverted by the respondents is sufficient cause for condonation of delay in filing the application under Section 119 (2)(b) of the Act. Besides it is not in dispute that the return for AY 2011-12 was in fact filed by the petitioner albeit 365 days later on 30th September, 2012. That in respect of the other years from 2010-11 to 2013-14 except 2011-12, the income tax authorities have allowed the deduction under Section 80 IB (10) through the petitioner. In our view, substantial injustice would be caused to the petitioner if the order dated 7th May, 2021 is not set aside. This is clearly a case falling within the phrase “genuine hardship”. As mentioned above. Technical consideration above cannot come in the way of substantial justice. It is neither an allegation of malafide nor an allegation that the delay has been deliberate. We do not find that the omission to file petitioner’s return by the income tax consultant to be an act of negligence.
