VRG Electronics Pvt Ltd Vs PCIT (Delhi High Court)
Condonation of Delay in Filing ITR under Section 119(2)(b) – Liberal Interpretation of “Genuine Hardship” Reaffirmed
1. Introduction
The Income-tax Act, 1961 (“the Act”) prescribes strict timelines for filing returns of income and related forms. However, recognising that rigid application of limitation periods may cause hardship, Section 119(2)(b) empowers the Central Board of Direct Taxes (CBDT) to authorise condonation of delay in appropriate cases to mitigate “genuine hardship.”
The Delhi High Court in VRG Electronics Pvt. Ltd. (2025:DHC:8064) dealt with a case where a 60-day delay in filing ITR and Form 10-IC was rejected by the Principal Commissioner of Income Tax (“PCIT”) on the ground that negligence of the accountant does not constitute “genuine hardship.” The Court has once again emphasised that condonation powers under Section 119(2)(b) must be exercised liberally, with a justice-oriented approach.
2. Statutory Framework
- Section 119(2)(b): CBDT may, by general or special order, authorise income-tax authorities to admit applications for exemption, deduction, refund, or relief even after the prescribed period, to mitigate genuine hardship.
- CBDT Circular No. 9/2015 dated 09.06.2015: Lays down monetary limits and procedural guidelines for condonation of delay applications.
- CBDT Circular dated 12.10.1993: Earlier circular emphasising liberal interpretation of “genuine hardship.”
3. Facts of the Case
- Petitioner: VRG Electronics Pvt. Ltd., a company required to file ITR along with Form 10-IC (for opting concessional corporate tax regime under Section 115BAA).
- The ITR and Form 10-IC were filed 60 days late.
- Reason: Accountant inadvertently forgot to file within due date; lapse came to light upon receiving a departmental email. Returns were promptly filed thereafter.
- Application for condonation of delay was filed before PCIT under Section 119(2)(b).
- PCIT rejected the application on 21.06.2024, holding that mere negligence of accountant is not “genuine hardship,” relying on CBDT Circular No. 9/2015.
- Assessee challenged the order before the Delhi High Court.
4. Arguments Advanced
