Case Law Details
Marayamuttom Service Co-Operative Bank Ltd Vs ITO (Kerala High Court)
Introduction: In a recent judgment, the Kerala High Court addressed a crucial aspect of income tax return filing. The case, titled ‘Marayamuttom Service Co-Operative Bank Ltd vs. ITO,’ dealt with the power of the Commissioner of Income Tax (CIT) to condone delays in filing income tax returns under Section 119(2)(b) of the Income Tax Act. This article explores the key details and implications of this judgment.
Detailed Analysis
1. Background: The petitioner, Marayamuttom Service Co-Operative Bank Ltd, sought a writ of mandamus to compel the 1st and 3rd respondents to open an online window for filing the annual income tax return for the assessment year 2022-23. The petitioner had failed to file the return within the prescribed timeline due to its reliance on an Audit Report from the Co-operative Department, which it obtained after the deadline had passed.
2. Statutory Provisions: Section 139(1) of the Income Tax Act sets the timeline for filing income tax returns. If this timeline is not met, Sub Section (4) of Section 139 allows assessees to file the return before three months prior to the end of the relevant assessment year or before the completion of the assessment year, whichever is earlier. Sub Section (8A) of Section 139 permits filing updated returns. Furthermore, Section 119(2)(b) empowers the Commissioner of Income Tax to condone delays in filing the return.
3. Petitioner’s Approach: The petitioner, represented by learned counsel, expressed its intention to approach the jurisdictional Commissioner with an application for condoning the delay in filing the return. If the Commissioner approves this request, the petitioner will upload the return, treating it as filed on time.
4. Revenue Department’s Position: The learned counsel for the Revenue Department did not object to the petitioner’s proposed steps. This is because the Income Tax Act itself empowers the Central Board of Direct Taxes (CBDT), or through delegation, the Commissioner, to condone delays in filing income tax returns.
5. Court’s Decision: The Kerala High Court disposed of the writ petition, granting the petitioner the liberty to approach the jurisdictional Commissioner with an application for condoning the delay. This application must be made within 15 days from the date of the judgment. If such an application is submitted, the jurisdictional Commissioner is tasked with deciding it expeditiously, in accordance with the law, and after providing an opportunity for a hearing to the petitioner.
Conclusion: The Kerala High Court’s judgment in the case of Marayamuttom Service Co-Operative Bank Ltd vs. ITO clarifies the powers of the Commissioner of Income Tax to condone delays in filing income tax returns. This decision underscores the importance of adhering to the statutory provisions outlined in the Income Tax Act and highlights the legal recourse available to assessees in case of delays. It is a significant development for taxpayers and tax authorities alike, providing clarity on the procedures to be followed when filing returns after the stipulated deadline.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
1. Present writ petition has been filed praying for a writ of mandamus commanding the 1st and 3rd respondents to open online window to the petitioner to enable him to file the annual income tax return for the assessment year 2022-23 (Financial Year-2021-22).
2. Section 139(1) of the Income Tax Act set out time line for filing return of income tax. Admittedly, the petitioner could not file return of his income within the time line prescribed under Section 13(1) of the IT Act. The reason for not filing of the income tax return on time is that the petitioner being a co-operative society, which was required the help of Audit Report from the Co-operative Department of the State and which the petitioner could get after the timeline prescribed under Section 139 (1) of the IT Act got expired. Therefore, the petitioner could not file return of income within the timeline prescribed under the IT Act.
3. If the timeline got expired and the assessee could not file return by 31st December of the Assessment year, then there is a provision under Sub Section (4) of Section 139, which allows the assessees to file the return for any previous year at any time before three months prior to the end of the relevant assessment year or before completion of the assessment year, whichever is earlier. There is yet another provision ie., Sub Section (8A) of Section 139, which also permits filing of the updated returns. The Commissioner of Income Tax is empowered under Section 119 (2)(b) of the Act to condone the delay in filing the return on time.
4. Learned counsel for the petitioner submits that he will approach the jurisdictional Commissioner with an application for condoning the delay in filing the return and if the Commissioner condones the delay, he will upload the return of his income, which may be treated as the the return filed on time.
5. Learned counsel for the Revenue Department does not have much objection to the steps suggested by the petitioner, inasmuch as the Act itself empowers the Central Board of Direct Taxes (CBDT) or on delegation of the said power to the Commissioner to condone the delay in filing the income tax return on time.
6. Therefore, this writ petition is disposed of with liberty to the petitioner to approach the jurisdictional Commissioner with an application for condoning the delay, within a period of 15 days from today. If such an application is made, the jurisdictional Commissioner will decide the application expeditiously, in accordance with law, after affording an opportunity of hearing to the petitioner.
With the aforesaid direction, this writ petition stands disposed of.
