S. 119(2)(b) Income Tax Act | Gujarat HC Directs Commissioner To Avoid Pedantic Approach, Condone One Year Delay In Filing Return
The Gujarat High Court recently allowed the petition preferred by a woman seeking to condone over one year delay in filing of her income tax return for an assessment year.
A division bench of Justices Bhargav D. Karia and Mauna M. Bhatt also criticized the “pedantic approach” in deciding Petitioner's application under section 119(2)(b) of the Income Tax Act, 1961.
The provision empowers CBDT to direct Income Tax authorities to allow refund/ deduction claims or any other relief under the Act, even after the expiry of prescribed limitation period.
A circular issued by CBDT in this behalf in the year 2015 stipulates that at the time of considering the case under Section 119(2)(b), it shall be ensured that the income/loss declared and /or refund claimed is correct and genuine and also that the case is of genuine hardship on merits.
Petitioner claimed that her income tax return was filed by her lawyer for many years but, due to inadvertent delay her return could not be filed for the Assessment Year 2022-23. It was contended that she should not be deprived of legitimate refund merely for delay in filing the return, particularly without issuing any notice of hearing.
The authority had however rejected relief on the ground that Petitioner had not provided any proof to prove the genuineness of the hardship which she faced in filing the return of income, as per the 2015 Circular.
The High Court observed that the Income Tax authority ought to have considered Petitioner's application under section 119(2)(b) of the Act, without adopting any pedantic technical approach.
It referred to Sitaldas Motwani v. DIT whereby the Bombay High Court had held that the phrase “genuine hardship” used in Section 119(2)(b) should be construed liberally.
“The legislature has conferred the power to condone delay to enable the authorities to do substantive justice to the parties by disposing of the matters on the merits. The expression 'genuine" has received a liberal meaning in view of the law laid down by the Apex Court referred to hereinabove and while considering this aspect, the authorities are expected to bear in mind that ordinarily the applicant applying for condonation of delay does not stand to benefit by lodging its claim late. Refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold a cause of justice being defeated,” it was held.
Similarly, in Bombay Mercantile Co-op. Bank Ltd. (supra), the Bombay High Court had held that in matters of condonation of delay, a highly pedantic approach should be eschewed and a justice-oriented approach should be adopted and a party should not be made to suffer on account of technicalities.
Accordingly, the High Court remanded the matter back to the Income Tax authority, directing it to pass an appropriate order under Section 119(2)(b) within 12 weeks.
Appearance: Advocate SN Divatia for Petitioner; Senior Standing Advocate Varun K. Patel for Respondent
Case title: Nirzari Amitbhai Mehta v. Pr. Commissioner Of Income Tax-1 Or His Successor
Case no.: R/SPECIAL CIVIL APPLICATION NO. 3188 of 2024