Condonation of delay in filing ITR allowed as delay caused due to ‘genuine hardship’

Central Board of Direct Taxes Vs. Vasudev Adigas Fast Food Pvt Ltd (Karnataka High Court)

Conclusion: Delay  in filing return was condoned as CBDT, in virtually passing an assessment order on the return of income of assessee had traversed beyond the scope of its power to condone the delay under Section 119(2)(b) and had acted contrary to the provisions of Section 119(2)(b). CBDT had also ignored the recommendations of the jurisdictional authorities to condone the delay in filing the return of income, at the time of considering the application of assessee seeking condonation of delay in filing the return of income.

Held: Assessee-company filed an application before the CBDT, seeking condonation of delay in filing the return of income for the assessment year 2014­-15, setting out in detail the reason for the delay in filing the return. CBDT however passed an order rejecting the aforesaid application for condonation of delay on the ground that delay was not caused by any external factors which assessee had no control over. CBDT had examined the return filed by assessee on merits and rejected the claim on the ground that the claim was not genuine, relying on Circular No.9/2018, dated 9.6.2015, effectively passing an assessment order, contrary to the settled principles of law. Single Judge had allowed the writ petition and had quashed the order passed by  CBDT and had also allowed the application for condonation of delay in filing the return of income for the assessment year 2014-15. On appeal. It was held that CBDT, in virtually passing an assessment order on the return of income of assessee had traversed beyond the scope of its power to condone the delay in filing the return of income under Section 119(2)(b) and had acted contrary to the provisions of Section 119(2)(b). CBDT had ignored the recommendations of the jurisdictional authorities to condone the delay in filing the return of income, at the time of considering the application of assessee seeking condonation of delay in filing the return of income. CBDT had sought for a report from the Principal Commissioner of Income Tax-II, as well as the jurisdictional Additional Commissioner of Income Tax. It was pertinent to note that both the Principal Commissioner of Income Tax-II as well as the jurisdictional Additional Commissioner of Income Tax had given a report that the delay in filing the return of income might be condoned. Though the CBDT had referred to the said opinions, but had not taken the same into consideration while deciding the application of assessee. This Court opined that the order passed by Single Judge did not warrant interference. Also, for the purpose of scrutiny and for the purpose of other proceedings also, the limitation should start from the date the order had been passed by the Single Judge.

FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT

The delay in filing the appeal is condoned.

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