B.N. Srinivas Reddy Vs PCIT (Karnataka High Court)
Summary: Karnataka High Court set aside the Principal CIT’s rejection of condonation for a 326-day delay in filing Form 68, holding that the taxpayer’s mistaken manual filing instead of online submission was a bona fide and technical error. Emphasizing that procedural lapses arising from genuine mistakes should not override substantive justice, the Court adopted a liberal, justice-oriented interpretation of Section 119(2)(b) read with CBDT Circular No. 9/2015. Observing that the 67-year-old petitioner had made timely manual compliance and acted in good faith, the Court ruled that such errors warranted leniency and remanded the matter to the PCIT for fresh consideration. The judgment reinforces that tax authorities must prioritize fairness and genuine hardship over rigid procedural compliance, ensuring relief is not denied for inadvertent or technical lapses.
Petitioner aged 67, filed a writ petition seeking to quash the order dated 30.04.2025 passed by the PCIT, Bengaluru-2, rejecting his application for condonation of delay u/s 119(2)(b) in filing Form 68 for AY 2022-23. The delay was 326 days.
Petitioner explained that his tax consultant had mistakenly assumed Form 68 had to be filed manually, & accordingly, the form was manually submitted before AO on 14.05.2024, which was within time. Later, when AO passed an order u/s 270A imposing penalty, & the Petitioner attempted to appeal u/s 264, it was realized that the form had to be filed online. On becoming aware of the procedural lapse, the Petitioner filed the form online on 12.03.2024 & sought condonation of delay citing genuine hardship under CBDT Circular No.9/2015 dated 09.06.2015.
Revenue opposed the plea contending that the Pr.CIT had rightly rejected the application for lack of sufficient cause.
Justice S.R. Krishna Kumar, after hearing both sides, observed that the Petitioner’s failure to file Form 68 online within the due date was a bona fide & technical error, since the form had in fact been manually filed before the AO within time. The Court held that such procedural lapses warranted a liberal, justice-oriented approach consistent with CBDT’s circular & principles of natural justice.
Accordingly, the impugned order dated 30.04.2025 was set aside, & the matter was remitted back to the Pr.CIT for fresh consideration of the condonation petition. The Court directed the authority to provide the Petitioner with adequate opportunity to submit additional documents & explanations, & to verify the claim in accordance with law.
The writ petition was allowed; the Pr.CIT’s order rejecting condonation u/s 119(2)(b) was quashed, & the case was remanded for fresh adjudication with directions to adopt a liberal & equitable approach while reconsidering the taxpayer’s plea.
The ruling reinforces that technical non-compliance or procedural delay arising from bona fide mistakes should not defeat substantive justice, especially when the taxpayer had made timely manual compliance. The Karnataka HC’s insistence on a “justice-oriented approach” under Section 119(2)(b) aligns with the CBDT’s intent to relieve genuine hardship rather than penalize inadvertent procedural lapses.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, petitioner seeks quashing of the impugned order at Annexure – G dated 30.04.2025 passed by the respondent No.1, whereby the application filed by the petitioner under Section 119(2)(b) of the Income Tax Act, 1961 seeking condonation of delay of 326 days in filing the Form 68 in relation to the Assessment Year 2022-23 was rejected by the respondent No.1.
2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
3. A perusal of the material on record will indicate that in relation to the aforesaid Assessment Year 2022-23, the petitioner filed Form 68 after the prescribed period along with the application seeking condonation of delay of 326 days in filing Form 68 interalia contending that the Tax-consultant of the petitioner was of the assumption that form 68 should be filed manually and hence made the said compliance manually before the Assessing Officer on 14.05.2024. Subsequently, when an Order under section 270A of the Act was passed and the petitioner approached his tax-consultant top file an appeal under section 264 of the Act realised that Form 68 should be filed online and not manually. Realizing the said defect, the petitioner filed the said Form 68 online on 12.03.2024. It was contended that the delay in filing Form 68 was due to genuine hardship as contemplated in the Circular No.9/2015 dated 09.06.2015 and as such, the first respondent committed an error in rejecting the application for condonation of delay filed by the petitioner under Section 119(2)(b) of the I.T. Act, which deserves to be set aside.
4. Per contra, learned counsel for the respondents-Revenue would support the impugned order and submits that there is no merit in the petition and the same is liable to be dismissed.
5. Though several contentions have been urged by both sides as regards to the petitioner not having filed Form 68 in requisite manner within the due date and his inability and omission to file the said Form within due date in a requisite manner is a matter of record so also the fact that the petitioner in his application under section 119(2)(b) hasn’t brought to the notice of the first respondent regarding the filing of form 68 manually on 14.05.2024 which falls within the due date.
6. Under these circumstances, having regard to the specific assertion on the part of the petitioner that his inability and omission to file Form 68 in requisite manner within due date was due to bonafide reasons, unavoidable circumstances and sufficient cause, I deem it just and appropriate to adopt a justice oriented approach and remit the matter back to the first respondent or reconsideration of the matter afresh in accordance with law by setting aside the impugned order dated 30.04.2025.
7. In the result, I pass the following:
O R D E R
(i) The petition is hereby allowed.
(ii) The impugned order at Annexure-G dated 30.04.2025, is hereby set-aside;
(iii) The matter is remitted back to the first respondent for reconsideration afresh in accordance with law from the stage of considering the application dated 14.03.2025 filed by the petitioner under section 119(2)(b) of the IT Act.
(iv) Liberty is reserved in favour of the petitioner to submit replies, pleadings, documents etc., which shall be considered by the first respondent who shall prvide sufficient and reasonable opportunity to the petitioner and hear them and proceed further in accordance with law.
(v) It is needless to state that respondents are at liberty to verify the claim of the petitioner and proceed further in accordance with law.
