Western Arch Developers Vs PCIT (Central) (Bombay High Court)
In a significant ruling for taxpayers, the Bombay High Court has set aside an order by the Principal Commissioner of Income Tax (PCIT) that had rejected a developer’s application to condone a 45-day delay in filing its income tax return. The court, led by a co-ordinate bench, ruled that the tax authority’s reasons for rejecting the application were unsustainable and directed them to open the portal to allow the developer to file the return.
The case, Western Arch Developers vs. PCIT (Central), centered on the petitioner, a partnership firm engaged in construction and development. The firm had undertaken a housing project and was following the project completion method of accounting. For the Assessment Year 2024-25, after receiving a completion certificate, the firm declared a profit of approximately Rs. 3.6 crore from the project. According to the petitioner, it was eligible for a 100% deduction on this profit under Section 80IBA of the Income Tax Act, 1961.
The petitioner’s troubles began after it obtained the necessary tax audit report and other forms by October 2024. The due date for filing the return, as extended by the CBDT, was November 15, 2024. The petitioner claimed that it could not file the return on time due to the ill-health of its managing partner. The firm subsequently attempted to upload the return on December 31, 2024, but faced a technical error on the income tax portal that prevented the submission.
