Case Law Details
Mohan Poovampally Gopal Vs PCIT (Kerala High Court)
In the case of Mohan Poovampally Gopal vs. Principal Commissioner of Income Tax (PCIT), the Kerala High Court ruled on the approach for handling delay condonation applications under Section 119(2)(b) of the Income Tax Act, 1961. The petitioner, Gopal, challenged an order rejecting his request to file revised income tax returns for multiple assessment years (2007-08 to 2018-19), arguing that his application should have been evaluated solely on the grounds of whether he had a valid reason for the delay rather than on the merits of his claim. The petitioner cited precedent, specifically the Daisy vs. Principal Commissioner of Income Tax case, asserting that evaluating the substantive merits of the tax claim in such applications contradicts judicial guidance.
The court, after reviewing arguments, found merit in Gopal’s contention, emphasizing that the Income Tax Act’s Section 119(2)(b) is meant to provide relief in exceptional cases based on “sufficient reason” for the delay, rather than judging the validity of the claim itself. The Court noted that the PCIT’s order had instead assessed the petitioner’s tax claim, diverging from the procedural focus intended for delay condonation applications. Consequently, the court quashed the previous order and directed the PCIT to reconsider Gopal’s application, focusing on whether there was a sufficient cause for the delay and providing the petitioner an opportunity to be heard. This ruling reinforces that tax authorities must adhere to the procedural scope of Section 119(2)(b), concentrating on the applicant’s delay justification rather than the merits of the underlying claim.
FULL TEXT OF THE JUDGMENT/ORDER OF KERALA HIGH COURT
The petitioner has approached this Court challenging Ext.P6 order issued under the provisions of Section 119(2)(b) of the Income Tax Act, 1961 (hereinafter referred to as the ‘1961 Act’), refusing to extend the time for filing revised return of income for assessment years 2007-2028 to 2018-2019.
2. It is the case of the petitioner that in the peculiar facts and circumstances of the case and considering the circumstances under which an application under Section 119(2)(b) of the 1961 Act was filed, the competent authority ought to have permitted the filing of revised returns for the assessment years noticed above. It is submitted that instead of considering the merits of the application for condonation of delay, the competent authority considered the merits of the claim raised by the petitioner and concluded that the petitioner is not entitled to any relief under Section 119(2)(b) of the 1961 Act. It is submitted that it is directly contrary towards the law laid down by the Division Bench of this Court in Daisy v. The Principal Commissioner of Income Tax, Trivandrum in W.A.No.1420 of 2023.
3. Heard the learned Senior Standing Counsel appearing for the respondents also. The learned Senior Standing Counsel would submit that the impugned order is a detailed and speaking order. It is submitted that the power under Section 119(2)(b) of the 1961 Act can be exercised only in exceptional circumstances and not as a matter of course. It is submitted that though reference has been made to the merits of the matter, the competent authority has found no reason for extending the time for filing revised returns for the assessment years in question and therefore, the petitioner has not made out any case for grant of relief under Article 226 of the Constitution of India.
4. Having heard the learned counsel for the petitioner and the learned Senior Standing Counsel appearing for the respondents, I am of the view that the petitioner is right in contending that the application for condonation of delay should be considered not on the merits of the claim putforth by the petitioner, but on the question as to whether there was sufficient reason for condoning the delay in terms of the provisions contained in Section 119(2)(b) of the 1961 Act. A reading of Ext.P6 indicates that the Principal Commissioner of Income tax (1st respondent) had considered the merits of the claims raised by the petitioner instead of considering the question as to whether there was sufficient reason to condone the delay/extent time in terms of the provisions contained in Section 119(2)(b) of the 1961 of the Act read with the provisions of the Circular No.9/2015 dated 09.06.2015 (Circular issued by the Central Board of Direct Taxes in the matter of consideration of claims for condonation of delay under Section 119(2)(b) of the 1961 Act).
Accordingly, this writ petition is allowed. Ext.P6 is quashed. The application filed by the petitioner is restored to the file of the 1st respondent, who shall pass fresh orders, after considering the observations in this judgment and after affording an opportunity of hearing to the petitioner.
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