ITR not Filed in Time as CA was Discharging Family Obligations is ‘Genuine Hardship’, Delay to be Condoned

Case Details: ADCC Infocom (P.) Ltd. v. Principal Chief Commissioner of Income-tax - [2023] 150 taxmann.com 529 (Bombay)

Judiciary and Counsel Details

• • A.S. Chandurkar & M.W. Chandwani, JJ.
  • Atharva S. Manohar, Adv. for the Petitioner.
  • Anand Parchure & B.N. Mohata, Advs. for the Respondent.

Facts of the Case

Assessee-company, engaged in the business of Geospatial and Engineering Services, suffered losses in its business. Since it suffered the loss in the relevant year, it was required to file its return of income before the due date prescribed under section 139(1) in order to carry forward such losses. However, the assessee failed to furnish the return of income within the prescribed time limit and filed the same after a delay of 36 days.

Subsequently, the assessee filed an application for condonation of delay of 36 days before Principal Chief Commissioner of Income Tax (PCCIT) along with an affidavit by its Chartered Accountant (CA) demonstrating that the delay was due to family obligations of its CA. Considering it not the case of ‘genuine hardship’, PCCIT rejected the assessee’s application for condonation of delay.

Aggrieved-assessee filed a writ petition before the Bombay High Court.

High Court Held

The Court held that the Central Board of Direct Taxes (Board) is vested with the power under section 119(2)(b) to admit an application or claim for any exemption, deduction, refund or any other relief under the Act after the expiry of the period specified under the Act where the Board considers it desirable or expedient so to do for avoiding genuine hardship. The Board issued various instructions in the form of Circulars, and latest by Circular No. 9/15, dated 9-6-2015. Therefore, while considering the application for condonation of delay, the authority is required to consider the genuine hardship.

The phrase genuine hardship would, inter alia, mean genuine difficulty, and it should be construed liberally, particularly in matters of entertaining applications seeking condonation of delay.

Further, there is a statement on oath of the assessee’s CA contending that she was discharging her family obligations which was neither disputed nor controverted by the PCCIT. She has taken responsibility for the delay mentioning that there was a failure on her part to file the return of the assessee before the due date. It is a settled principle that for the mistake on the part of the professionals, the litigant should not suffer. In addition, the delay is only of 36 days, and there is no allegation of mala fide or deliberate delay on the part of the assessee.

Thus, the delay in filing the return deserves to be condoned.

List of Cases Reviewed

• • B.M.Malani v. CIT [2008] 174 Taxman 363/306 ITR 196 (SC) (para 14)
  • Sitaldas K Motwani v. Dy. CIT [2010] 187 Taxman 44 (Bom.) (para 14)
  • Subhkaran & Sons v. N.A. Kazi 1984 SCC Online Bom 411 (para 13) followed.

List of Cases Referred to

• • B.M.Malani v. CIT [2008] 174 Taxman 363/306 ITR 196 (SC) (para 8)
  • Sitaldas K Motwani v. Director General of Income Tax (International Taxation) [2010] 187 Taxman 44 (Bom.) (para 9)
  • Subhkaran & Sons v. N.A. Kazi 5th ITO 1984 SCC Online Bom 411 (para 13).