Case Law Details
Balaji Super Alloys Vs PCIT (Madras High Court)
In a significant ruling, the Madras High Court condoned a mere 21-second delay in filing an income tax return (ITR) by the petitioner, Balaji Super Alloys. The case involved the Principal Commissioner, Coimbatore, who initially rejected the petitioner’s deduction claim under Section 80IA due to the minor delay.
The petitioner filed its income tax return at 00.00.21 am on 16th February 2021, just 21 seconds after the deadline. Despite this minimal delay, the return was considered late, and a deduction under Section 80IA was disallowed, resulting in a consequential demand. The petitioner’s request to condone the delay was initially rejected, leading to the filing of the writ petition.
The court, noting the negligible delay, ruled in the petitioner’s favor, considering it a human error that should be condoned in the interests of substantial justice. The court also observed that while the return filing software is programmed to close the portal at midnight, the condonation request should have been considered by a human who could recognize the minor delay’s exceptional nature.
However, the court also underlined the importance of adhering to deadlines, cautioning the petitioner to ensure timely compliance with statutory requirements to avoid such issues in the future.
The ruling in Balaji Super Alloys Vs PCIT reflects a more flexible approach to minor deviations from statutory deadlines, acknowledging the potential for human error. It emphasizes the principle of substantial justice over strict rule application. However, the decision should not be seen as an invitation for late compliance, but rather a recognition of the occasional inevitable minor delay. The court’s ruling reinforces the need for businesses to maintain rigorous compliance while providing some relief in extraordinary circumstances.
FULL TEXT OF THE JUDGMENT/ORDER OF MADRAS HIGH COURT
The petitioner is a company and has challenged order dated 24.11.2022 passed by the sole respondent, Principal Commissioner, Coimbatore under Section 119(2)(b) of the Income Tax Act, 1961 (in short ‘Act’) and a subsequent order passed by the respondent on 03.03.2023 rejecting the representation filed by the petitioner on 15.02.2023.
2. The petitioner has filed a return of income for assessment year (AY) 2020-2021 on 16.02.2021. Admittedly, the return had come to be uploaded only on 00.00.21 am of 16.02.2021, with a delay of 21 seconds, as the last date for filing of return was 15.02.2021 midnight.
3. This is explained by the petitioner at paragraph 5 of its affidavit to the effect that the return had been prepared in Extensible Markup Language (XML) format on 15.02.2021 and filed at 11.59 p.m. However, it so happened that the uploading of the return took place 21 seconds later. Hence, and on the basis that the return of income had been uploaded belatedly, the intimation issued under Section 143(1) on 24.12.2021 disallowed the claim of deduction under Section 80IA of the Act and a consequential demand was raised.
4. The petitioner thus sought condonation of the delay of 21 seconds for filing return of income which had come to be rejected by the respondent vide order dated 24.11.2022, wherein it is stated that the return of income had been due on or before 10.01.2021, not noticing that the time had been extended till 15.02.2021. This necessitated the petitioner to approach the respondent by way of a rectification petition dated 15.02.2023, which has also been dismissed on 03.03.2023, the respondent stating that the error in date only constitutes a typographical error.
5. There is nothing untoward in the rejection of the deduction under Section 80IA for the reason that the return has admittedly been uploaded belatedly. However, the quantum of delay is not substantial, being 21 seconds. Undoubtedly, the petitioner ought not to have undertaken the exercise of filing of the return literally at the last second, but in my considered view, the 21 seconds delay could be considered to be a human error and condoned, bearing in mind the dictates of substantial justice.
6. Even as per the affidavit filed in support of the Writ Petition, the return had been filed only at 11.59 p.m. on 15.02.2021. The petitioner, being a company, ought to have ensured that the filing of return was sufficiently in time factoring in possible glitches or technical difficulties.
7. The defence of the learned Standing Counsel is that there is nothing wrong in the rejection of the return, since the software is so programmed to automatically close the portal at midnight. This may well be right. However, the request for condonation has been considered not by a machine but a human being, who, in my view, could well have considered the request in proper perspective, condoning the delay of 21 seconds.
8. For the aforesaid reasons, the impugned orders are set aside and the delay is condoned. The return of the petitioner for assessment year 2020-2021 shall be taken to have been filed in time with all consequences thereof. The petitioner will ensure that, henceforth, statutory compliances and due diligence are effected well in time.
9. This Writ Petition stands allowed. No costs. Connected Miscellaneous Petitions are closed.
