Ujala Dyeing And Printing Mills Private Limited Vs DCIT (Gujarat High Court)
The Gujarat High Court addressed a case where Ujala Dyeing And Printing Mills Private Limited inadvertently made an error in their income tax return filed on September 24, 2018, while claiming a refund of ₹38,08,115. The petitioner wrongly disclosed disallowable expenditures in column 23 instead of the correct columns 15 and 18 of the return. The Centralized Processing Center (CPC) issued an intimation on September 3, 2019, pointing out this mismatch with the Tax Audit Report. This intimation was received by the petitioner after the deadline for filing a revised return, which was March 31, 2019, had already passed. In response to the CPC’s intimation, the petitioner filed a corrected return on September 6, 2019, rectifying the column error while the total income remained unchanged. Subsequently, the petitioner applied for condonation of the delay in filing the corrected return under Section 119(2)(b) of the Income Tax Act, 1961. However, this application was rejected by the tax authorities, compelling the petitioner to seek recourse from the Gujarat High Court.
The primary argument presented before the High Court on behalf of the petitioner was that the error was purely a misclassification of disallowable items in the return columns, without any impact on the actual tax liability or causing any loss to the revenue. It was contended that the rejection of the condonation of delay application under Section 119(2)(b) caused genuine hardship to the petitioner, as a substantial refund was being withheld due to a mere procedural mistake. The court examined the provisions of Section 143(1)(a) of the Act and the Centralized Processing of Returns Scheme, 2011, which outline the process for handling discrepancies in tax returns. The court noted that the CPC itself had identified the mistake and prompted the petitioner to respond. Given that the petitioner promptly filed a corrected return upon realizing the error after the revised return deadline, the court found the rejection of the condonation application to be unjustified. The High Court emphasized that the mistake was technical and did not affect the tax payable or refundable. Consequently, the Gujarat High Court ruled in favor of the petitioner, quashing the order under Section 119(2)(b) and directing the respondents to process the corrected return in accordance with the law, thereby allowing the petitioner’s legitimate refund claim to be considered.
