Bhupathi Hotels Limited Vs Centralized Processing Centre (Andhra Pradesh High Court)
Andhra Pradesh HC: CBDT Circular Cannot Curtail Statutory Power Under Section 119(2)(b); Rejection of Refund Claim Solely on Six-Year Limitation Set Aside
The Andhra Pradesh High Court held that the statutory power conferred under section 119(2)(b) to condone delay for admitting claims for refund or other relief cannot be curtailed solely by the six-year time limit prescribed in CBDT Circular No. 9/2015. The Court observed that section 119(2)(b) itself does not prescribe any limitation period, but vests the authority with discretionary power to condone delay where doing so would avoid genuine hardship. Consequently, rejection of an application solely on the basis of the Circular, without considering the assessee’s explanation on merits, is legally unsustainable.
In the present case, the petitioner’s applications under section 119(2)(b) seeking condonation of delay and grant of refund for Assessment Years 2013-14 and 2015-16 were rejected exclusively on the ground that they had been filed beyond six years, as stipulated in CBDT Circular No. 9/2015. The petitioner explained that the delay resulted from severe financial difficulties, closure of business, and the Managing Director’s health issues. However, the authority failed to examine these grounds and mechanically rejected the applications by applying the Circular.
The High Court held that while CBDT circulars are binding on departmental authorities, they cannot override or restrict the scope of the statutory discretion conferred by section 119(2)(b). Accordingly, the Court set aside the impugned orders and directed the authorities to reconsider the petitioner’s refund claims on merits, after taking into account the explanation for the delay, and to pass appropriate orders within six weeks. The writ petitions were allowed.
Cases Discussed
- W. P.No. 29398 of 2024 (Andhra Pradesh High Court), dt.29.01.2026
- W. P.No. 31360 of 2023 (Telangana High Court), dt.24.11.2023
FULL TEXT OF THE JUDGMENT/ORDER OF ANDHRA PRADESH HIGH COURT
