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Judgment
Heard Mr. V.Raghunadh, learned counsel for the petitioner and Ms. B.Sapna Reddy, learned counsel for the respondents.
By filing this petition under Article 226 of the Constitution of India petitioner seeks a direction to the respondents to condone the delay in filing the return of income for the assessment year 2021-2022.
Petitioner is a company incorporated under the Companies Act, 2013. It is carrying on the business of construction of tunnels, mining works etc. It is an assessee under the Income Tax Act, 1961 (briefly, ‘the Act’ hereinafter).
It is stated that because of COVID-19 pandemic, financial condition of the petitioner was severely affected because of which it could not file the income tax return for the assessment year 2021-2022 within the due date. Due date for filing the return was 15.03.2022 but petitioner filed the return on 31.03.2022 under Section 139(4) of the Act. It is stated that petitioner has also paid the tax amount of Rs.7,84,360.00. Income tax return filed by the petitioner for the said assessment year was processed by the respondents under Section 143(1) of the Act whereafter an intimation was issued to the petitioner on 13.11.2022 calling upon the petitioner to pay an amount of Rs.38,45,310.00 instead of Rs.7,84,460.00 paid by the petitioner.
According to the petitioner, while issuing the intimation as above, respondents did not consider Form 10-IC application filed by the petitioner under sub-section (5) of Section 115 BAA of the Act belatedly along with the return.
In this connection, petitioner wrote to respondent No.1 on 02.12.2022 for condoning the delay in filing the income tax return and also to revise the demand by considering concessional rate of tax as contended by the petitioner. However, respondent No.1 passed an order dated 10.02.2023 rejecting the request of the petitioner for condoning the delay in filing the return. Order dated 10.02.2023 reads as follows:
The assessee, M/s. Deeprock TMS Private Limited, PAN: AAGCD2202G filed an application seeking condonation of delay in filing income tax return for A.Y.2021-22.
The assessee, vide petition dated 05.12.2022, seeking condonation of delay u/s. 119(2)(b) of Income Tax Act, declaring the total taxable income of Rs.2,64,76,670/-. The assessee has not claimed any refund/carry forward loss.
During the course of verification, it can be seen from CPC 2.0 portal that the assessee has already filed the ITR for A.Y.2021-22 on 31.03.2022 (belatedly) in order to claim concessional tax rate by filing Form10IC but CPC had not allowed the concessional tax rate while processing the ITR which resulted in raise of tax demand of Rs.38,45,310/-. Further, the CBDT Board’s circular 06/22 dated 17.03.2022, the condonation for filing Form-10IC was granted only for A.Y.2020-21 and there is no circular issued for condonation of delay for filing Form-10IC for A.Y. 2021-22 till date.
As ITR has been already filed, hence no action/interference u/s. 119(2)(b) of Income Tax Act, 1961 is warranted in the instant case. Accordingly, the condonation of delay in filing the return of income herewith is rejected for the A.Y.2021-22.
From a perusal of the above, it is seen that according to respondent No.1, Central Board of Direct Taxes (CBDT) had issued circular No.06/22 dated 17.03.2022 wherein power to condone the delay in filing Form 10-IC was granted only for the assessment year 2020-2021. There is no such circular for condonation of delay for the assessment year 2021-2022.
Section 119 of the Act confers power upon the CBDT to issue instructions to subordinate authorities. As per sub-section (1), CBDT may from time to time issue such orders, instructions and directions to other income tax authorities as it may deem fit for the proper administration of the Act. In the event such orders, instructions and directions are issued, the subordinate authority and all persons employed in the execution of the Act shall observe and follow the same. However, as per the proviso, such orders, instructions or directions are not to be issued to direct framing of assessment in a particular manner or to interfere with the appellate jurisdiction of the Commissioner (Appeals). Sub-section (2) of Section 119 of the Act has three clauses (a), (b) and (c). Clause (b) is relevant for the present purpose. Section 119(2)(b) of the Act says that without prejudice to the generality of the power conferred under CBDT under sub-section (1), CBDT may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise any income tax authority, not being the Commissioner (Appeals), 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 by or under the Act for making such application or claim and deal with the same on merit in accordance with law.
Insofar the present case is concerned, though the return ought to have been filed on 15.03.2022, it was belatedly filed on 31.03.2022. As a result, the concessional rate of tax claimed by the petitioner has not been considered.
On 28.03.2023, we had passed the following order:
Petitioner has assailed legality and validity of the order dated 10.02.2023 passed by respondent No.1 rejecting the petition of the petitioner dated 05.12.2022 seeking condonation of delay in filing income tax return for the assessment year 2021-22 under Section 119(2)(b) of the Income Tax Act, 1961 (briefly ‘the Act’ hereinafter).
As per the aforesaid order, Central Board of Direct Taxes (CBDT) had issued Circular dated 17.03.2022 granting authority to the Principal Commissioner to condone the delay in filing income tax return only for the assessment year 2020-2021. There is no circular issued by CBDT granting such authority to condone the delay in filing income tax return for the assessment year 2021-22.
Mr. J.V.Prasad, learned Standing Counsel, Income Tax Department to obtain instructions based on which we may pass appropriate order on the next date.
List this matter on 18.04.2023 under the same caption.
Learned counsel for the respondents submits that respondent No.1 has no power to condone the delay in submission of return for the assessment year 2021-2022. Respondent No.1 was conferred the power to consider condonation of delay in filing of return for the assessment year 2020-2021. Since the present case pertains to the assessment year 2021-2022, he had no other alternative but to reject the prayer of the petitioner.
After hearing learned counsel for the parties and considering the materials on record, we are of the view that it is a case of genuine hardship on the part of the petitioner which prevented it from filing the return and the related form within the due date. Besides, the delay is of only about fifteen days time.
That being the position, we feel that present is a fit case where CBDT may exercise its discretion under clause (b) of sub-section (2) of Section 119 of the Act and do the needful.
Accordingly, we direct respondent No.3 – CBDT, to consider the grievance of the petitioner and thereafter pass appropriate order under Section 119(2)(b) of the Act regarding condonation of delay in filing the return of income for the assessment year 2021-2022 along with Form 10-IC of the Act.
Let the above exercise be carried out within a period of two months from the date of receipt of a copy of this order.
This disposes of the writ petition.
Miscellaneous applications pending, if any, shall stand closed. However, there shall be no order as to costs.