HC sets aside CBDT's order u/s 119 refusing to admit belated refund claim filed by a habitual late filer of ITR
December 5, 2014[2014] 52 taxmann.com 152 (Bombay)
IT : CBDT could not refute admitting belated refund claim filed by an assessee on the ground that assessee was a habitual late filer of return of income and wanted to avoid scrutiny by late filing, especially when there was no malafide intension of assessee behind late filing of return
Facts
| (a) | Assessee filed return of income beyond the period specified for belated return in section 139(4) and claimed refund of the TDS. | |
| (b) | Assessing Officer did not act on the same and, consequently, assessee approached CBDT u/s 119(2)(b) and sought condonation of delay in filing return of income. | |
| (c) | It was stated by the assessee in the application that, at the relevant time, its office was shifted and certain records including TDS certificates got misplaced and it took considerable time to retrieve them which caused delay in filing of return. | |
| (d) | CBDT declined to condone the delay, inter alia, on the following grounds: (a) that audited accounts were prepared well before the due date of filing of return of income. However, there was no proper explanation was furnished by assessee as to why the return was not filed within due date. All this, led to the inference that delayed return was filed only to avoid scrutiny; (b) that no documentary evidence in support of misplacement of TDS Certificate by postal authorities on account of change in address of the assessee's company or evidencing delay in receipt of duplicate TDS Certificate was produced. | |
| (e) | (e) Assessee challenged CBDT's order by filing a writ petition in the High Court. |
The High Court held in favour of assessee as under-
| (1) | It may be true that the returns might not have been filed within the period specified under Section 139(1) of the Income-tax Act, nevertheless, the returns were filed in respect of all assessment years (except assessment year in question) within the time allowable under Section 139(4) of the said Act. Further, in almost all cases return was accepted with only some minor disallowances. In light of such facts, the CBDT was obviously not right in condemning the assessee as a 'habitual late filer' | |
| (2) | It could not be said that intension behind late filing of return was to avoid scrutiny since assessee had already made it clear that it had no objection to scrutiny assessment for the purposes of determining refund for the relevant Assessment Year. | |
| (3) | The circumstance that the accounts were duly audited within due date of filing of return was not a circumstance that could be held against the assessee. This circumstance, on the contrary added force to the explanation furnished by the assessee that the delay in filing of returns was only on account of misplacement of the TDS Certificates. | |
| (4) | For condonation of delay, what was really important was the acceptability of the explanation offered by the assessee rather than length of delay. Explanation offered by assessee that TDS certificates got misplaced due to shifting of office was not bogus. Hence, it could be said that the assessee had obtained any undue advantage out of delay in filing of Income Tax Returns. | |
| (5) | In every case of delay, there might be some lapse on the part of the party concerned. That by itself was not ordinarily sufficient to turn down the plea or to shut the doors against him. If the explanation offered did not smack of mala fides or it was not put forth as a part of dilatory strategy, the Court was expected to show utmost consideration to the applicant. | |
| (6) | An acceptable explanation was offered by the assessee and a case of genuine hardship was made out. Accordingly, the impugned order made by the CBDT was to be set aside. The delay in filing the Return of Income for the relevant Assessment Year was to be condoned and Return of Income was directed to be admitted for consideration. | |
| (7) | The jurisdictional Assessing Officer was to be directed to scrutinize the Return of Income and to examine the claim for refund on merits in accordance with law. |
Regards
Prarthana Jalan
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