Rajbir Singh Vs PCIT (Punjab and Haryana High Court)
Condonation of delay under section 119(2)(b) cannot be rejected mechanically; the competent authority must independently examine whether the refund claim is correct and genuine and whether genuine hardship exists, and cannot substitute the “sufficient cause” test under the Limitation Act for the statutory requirements of section 119(2)(b).
Core Issue Whether the Principal Commissioner of Income Tax was justified in rejecting an application under section 119(2)(b) seeking condonation of delay for filing a revised return claiming refund, merely on the basis that a favourable order in the case of a similarly situated employee had not been accepted by the Department on merits, no order had been passed in the assessee’s own case, and no genuine hardship was established, without independently examining the correctness and genuineness of the claim and the existence of genuine hardship as required by CBDT Circular No. 9/2015.
Facts The petitioner was a former employee of HMT Limited’s Tractor Division at Pinjore, which was proposed to be closed following financial difficulties. The petitioner had opted for VRS in 2016 and received Rs. 29,14,500/- under the scheme. In Form-16, HMT treated Rs. 5 lakh as exempt under section 10(10C) and the balance of Rs. 24,14,500/- as taxable. Relying on Form-16, the petitioner filed his return for AY 2017-18 on 3 August 2017 and the return was processed and accepted. Subsequently, in the case of similarly situated HMT employees, the CIT(A) granted exemption under section 10(10B), instead of section 10(10C), and the ITAT subsequently allowed appeals in favour of other similarly situated employees. Those decisions attained finality.
