Optra Health Private Limited Vs ACIT (Bombay High Court)
In the case of Optra Health Private Limited vs. ACIT, the Bombay High Court addressed an issue stemming from a mismatch be-tween the name used in the income tax return (ITR) and the company’s updated legal name. Optra Health had changed its name from Optra Technologies Private Limited in January 2017, prior to filing its ITR for AY 2017-18 in November 2017. Despite correctly using its PAN, the return was marked defective due to the outdated name. The Income Tax Department issued notices via email to the company’s CFO, Mr. Prasad Sathe, who failed to act due to personal issues and eventually left the organization in 2019. As no physical notice was sent and other officials were unaware of the emails, the company was unable to rectify the error within the stipulated time, resulting in the return being declared invalid.
Seeking relief, Optra Health filed an application under Section 119 of the Income Tax Act for condonation of delay, which was initially rejected by tax authorities. After a writ petition, the Bombay High Court remanded the matter for fresh consideration, but the application was rejected again on grounds that the company failed to demonstrate “genuine hardship.” The Court disagreed with this restrictive interpretation, observing that the error was not intentional or due to negligence. Emphasizing that the term “genuine hardship” should be construed liberally, the Court ruled that administrative lapses should not override substantive justice. Accordingly, the Court directed tax authorities to reopen the portal to allow Optra Health to correct the company name in its return, without delving into the merits of the tax return itself.
