Technical Consideration Cannot Come In The Way Of Substantial Justice: Bombay High Condones ITR-filing Delay

The Bombay High Court has condoned a year-long delay in filing the Income Tax Return (ITR) over "genuine hardships."

The division bench of Justice Dhiraj Singh Thakur and Justice Abhay Ahuja has observed that technical considerations cannot come in the way of substantial justice. It is neither an allegation of malafide nor an allegation that the delay has been deliberate.

The petitioner/assessee is in the business of real estate, building, and development. The assessee had entered into a joint venture agreement with Sanghvi Premise Pvt. Ltd. to jointly develop a housing project named "Sanghvi Nakshatra," situated at Nasik. The project, having met the conditions under Section 80 IB (10), was entitled to a deduction.

The tax consultant was supposed to file the return on or before September 30, 2011. However, due to the inadvertent delay on his account, the ITR was filed on September 30, 2012, after a delay of 365 days.

The petitioner firm filed an application under Section 119(2)(b) seeking condonation of the delay in filing the ITR caused by the tax consultant, depriving the petitioner of a deduction and causing grave hardship to the firm. However, the CBDT has rejected the application made by the petitioner.

The department contended that the return of income was due to be filed on September 30, 2011, but was filed only on September 30, 2012, i.e., after a delay of 365 days. Although the books of accounts of the petitioner were admittedly audited on September 21, 2011, and the assessment was completed on March 14, 2014, it disallowed the deduction claimed by the petitioner under Section 80 IB (10).

The department submitted that no man can take advantage of his own wrong, and the basis of the income tax consultant's omission due to his son's physical and mental condition and ill health cannot be used by the petitioner to claim hardship. The petitioner has already availed of the benefits under the DTVSV Act, as the petitioner has already been issued Form 3, by which the petitioner was liable to pay 100% of the tax liability without any interest or penalty. The petition deserves to be dismissed.

"The income tax authority acted accordingly and considered the claim for deduction under Section 80 IB(10) for AY 2011–12 made by the petitioner in accordance with law, as if there had been no delay in filing the return. The authorities under the DTVSV Act also act in accordance with the said findings and amend Form 3 in respect of the amounts to be paid by the petitioner," the court directed.

The court has not delved into the merits of the petitioner's claim under Section 80 IB (10) for AY 2011-2012. If any observation has been made in this regard, it has only been in considering the order under Section 119(2)(b) of the Income Tax Act.

Case Title: M/s Bhatewara Associates Versus Union Of India

Citation: Writ Petition No. 4832 Of 2021

Date: 23.08.2022

Counsel For Petitioner: Advocates Sanket S. Bora, Vidhi K. Punmiya

Counsel For Respondent: Advocate N. N. Singh

Citation: 2022 LiveLaw (Bom) 512  

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