Gujarat High Court
Shri Monica Elande W/O. Shri Sumit ... vs Commissioner Of Income Tax (It And Tp) , ... on 23 June, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 5935 of 2024
==================================================
SHRI MONICA ELANDE W/O. SHRI SUMIT PENDHRAKAR
Versus
COMMISSIONER OF INCOME TAX (IT AND TP) , AHMEDABAD
==================================================
Appearance:
MR ASHISH GOYAL for MR JAYVIR N GADHAVI(9098) for the Petitioner(s) No. 1
MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1
==================================================
CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 23/06/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)
Heard learned advocate Mr. Ashish Goyal
for Mr. Jayvir Gadhavi for the petitioner and
learned Senior Standing Counsel Mr. Varun K.
Patel for the respondent.
2. By this petition under Article 226/227 of
the Constitution of India, the petitioner has
challenged the order dated 02.11.2023 passed
by the respondent - Commissioner of Income
Tax, (IT & PT), Ahmedabad under Section 119(2)
(b) of the Income Tax Act, 1961 (for short
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
"the Act") whereby the application filed by
the petitioner for condonation of delay in
filing the Return of Income for the Assessment
Year 2022-23 is rejected.
3. The brief facts which has led to filing of
the present are as under :
3.1. The petitioner is a non-resident of India
residing in United State of America (USA) . He
has not filed any return under the provisions
of the Act since last 22 years. However during
the Assessment Year 2022-23, the petitioner
sold the residential flat jointly owned with
his spouse for Rs.29,50,000/-. As per the
provisions of Section 195 of the Act, the Tax
was Deducted at Source(TDS) at Rs.6,74,960/-.
The Tax Deducted at Source was at gross value,
being sale consideration and the expenses and
cost of acquisition were ignored.
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
3.2. It is the case of the petitioner that
when he computed his tax liability, it
amounted to 'NIL'. Therefore, there was
refund of Rs.6,74,960/-. The petitioner being
a non-resident was under the impression that
no Return of Income was required to be filed
as per the provisions of the Act as there was
no tax liability. When the legitimate refund
was not received by the petitioner, he thought
it fit to file return claiming return at the
time of his visit to India. However, the
petitioner was not aware that Section 139(4)
of the Act as amended, restricted the filing
of belated returns upto three months prior to
the end of the relevant Assessment Year.
Therefore, as per the provisions of Section
139(4)of the Act, the petitioner was required
to file his return of Assessment Year till
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
31.12.2022. When the petitioner came to India
in September, 2023, it was brought to his
notice by the Tax Consultant that he would not
be in a position to file return for the
Assessment Year, 2022-23 in September, 2023
since the same has become invalid as per the
provisions of Section 139(4) of the Act.
3.3. In such circumstances and with a view
to file return and claim refund of excess Tax
Deducted at Source, the petitioner filed an
application under Section 119(2)(b) of the Act
before the Commissioner of Income Tax (IT &
TP), Ahmedabad on 21.06.2023. It is the case
of the petitioner that along with the
application, he had also annexed Form 26AS,
computation of income, passport etc. On
11.10.2023, notice was sent electronically by
the respondent directing the petitioner to
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
furnish written submissions till 19.12.2023.
3.4. It is the case of the petitioner that
he was in USA at the time of issuance of
notice and was suffering from Covid-19.
Therefore he was not in a position to give
reply to the notice. To show his bona fide of
suffering from Covid-19 during that
interregnum period, the petitioner has annexed
his medical report of USA. However, without
affording any opportunity, the respondent by
way of an ex-parte order dismissed the
application preferred by the petitioner. In
such circumstances, the petitioner preferred
review/rectification application before the
respondent on 29.11.2023 which was accompanied
by the affidavit and medical certificates.
However, the respondent dismissed the
application preferred by the petitioner vide
order dated 14.12.2023 stating that there is
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
no provisions with regard to the
review/rectification of the order rejecting
the application under Section 119(2)(b) of the
Act. In view of such circumstance, the
petitioner has preferred the present petition
challenging the order dated 02.11.2023 vis-a-
vis the order rejecting the application under
Section 119(2)(b) of the Act.
4. Learned advocate Mr. Ashish Goyal for the
petitioner submitted that the respondent
failed to provide fair and reasonable
opportunity to the petitioner, though he was
suffering from Covid-19 and had also attached
his medical certificates to show that there
was genuine hardship attributed to the
circumstances of the petitioner. The
respondent has failed to consider that the
petitioner being non-resident was not aware
about the amendment in the Act. When the
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
petitioner came to know about the amendment
under Section 139(4) of the Act restricting to
file belated return, the petitioner visited
India again to file belated return. However,
without looking to the medical condition of
the petitioner, the respondent has rejected
the application under Section 119 (2)(b)of the
Act, which is unjust, unfair in every manner.
4.1. It was, therefore, submitted that
there was no liability of tax on the
petitioner. Once the claim of the petitioner
was not found to be unacceptable, the refund
ought to have been granted and ought not to
have been denied on the technical grounds. It
was further submitted that in the facts of the
present case, tax has been collected in excess
by the exchequer. Such collection is not as
per the law. When the factum of Rs.6,74,960/-
being excessively collected is not
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
controverted by the exchequer, then the
petitioner was eligible for refund and ought
not to have been denied the refund on
technical ground.
5. In support of his submissions, reliance
was placed on the following decisions :-
(1) In the case of R. Seshammal's v. Income Tax
Officer reported in [1999] 237 ITR 185 (Mad.)
[Madras High Court].
(2) In the case of M/s. Motilal Padampat Sugar
Mills. Co. v. State of Uttar Pradesh & Ors.,
reported in 118 ITR 326 (SC).
(3)In the case of Nirmala R. Mehta v.
Commissioner of Income-Tax reported in [2024] 139
taxman 394 (Bombay).
(4) In the case of Sanchit Software & Solutions
(P) Ltd., v. Commissioner of Income Tax reported
in [2012] 349 ITR 404 (Bombay).
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
(5) In the case of A. Balakrishnan v. General
Manager, Hindustan Machine Tools Ltd., reported
in [2007] 161 taxman 379 (Karnataka).
(6) In the case of Pankaj Kailash Agarwal v.
Assistant Commissioner of Income-Tax reported in
[2024] 161 taxmann.com 383 (Bombay).
6. On the other hand, learned Senior Standing
Counsel Mr. Varun K. Patel for the respondent
submitted that the petitioner failed to show
any genuine cause which has resulted into any
hardship to the petitioner which may have led
to belatedly filing of income tax return. The
petitioner has not pointed out any other cause
except the fact that he was residing in USA
and therefore, there was a genuine difficulty
in filing the income tax return. The
petitioner was duty bound to file the income
tax return by 30.12.2022 as per the provisions
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
of Section 139(4) of the Act. Ignorance of law
cannot be a ground to claim the benefit of
refund. Therefore, according to learned Senior
Standing Counsel Mr. Patel, the petitioner is
not entitled to any benefit of refund after
filing of income tax return for the Assessment
Year 2022-23.
7. Having heard the learned advocates for the
respective parties and considering the facts
of the case, it is not in dispute that the
petitioner is subjected to Tax Deducted at
Source for Rs.6,74,960/- despite the fact that
there was no other taxable income qua the
petitioner. The petitioner has categorically
placed medical certificate before the
authorities showing the fact and reasons for
not giving reply to the notice of the
petitioner pursuant to the application under
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
Section 119(2) (b) of the Act. This genuine
hardship is totally ignored by the respondent
authority. However, it is not in dispute that
the petitioner has not filed his return of
income for the last 22 years and he was
staying far away from India. Therefore, coming
to the facts of the case when the petitioner
was not aware of the procedural aspect of the
income tax law as well as the fact that he was
medically unfit during the pendency of the
application under Section 119 (2) (b) of the
Act, the respondent authority could not have
rejected the application as filing of return
for claiming benefit under the provisions of
the Act is procedural and the benefit accrued
to the assessee cannot be taken away on
account of technicalities when there is a
genuine hardship. This can be drawn from the
case of Sitaldas K. Motwani v. Director
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
General of Income Tax (International
Taxation) reported in [2010] 187 Taxman 44
{=323 ITR 223 (Bombay)} as well as the case of
Bombay Mercantile Co-op. Bank Ltd., v. CBDT
reported in [2010] 195 Taxman 106 {=332 ITR
87(Bombay)}. Similarly in case of Pankaj
Kailash Agarwal v. Assistant Commissioner of
Income Tax reported in [2024] 464 ITR 65
(Bombay), the Hon'ble Bombay High Court has
held as under :-
"10. On the issue of genuine hardship, relying
on R. K. Madhani Prakash Engineers (Supra),
Mr. Sarda submitted that while considering
this aspect of genuine hardship, the
authorities are expected to bear in mind that
ordinarily applicant applying for condonation
of delay does not stand to benefit by lodging
its claim late. Moreso, when applicant is
claiming the deductions under Section 80IC of
the Act. Mr. Sarda submitted that CBDT has
failed to understand that when the delay is
condoned, the highest that can happen is that
the cause would be decided on merits after
hearing the parties and the approach of the
CBDT should be justice oriented so as to
advance cause of justice.
11. In the affidavit in reply, respondents
have only reiterated what was stated in the
impugned order and Mr. Rattesar resubmitted
the same.
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
12. We would agree with Mr. Sarda that no
assessee would stand to benefit by lodging its
claim late. Moreso, in case of the nature at
hand, where assessee would get tax
advantage/benefit by way of deductions under
Section 80IC of the Act. Of course, there
cannot be a straight jacket formula to
determine what is 'genuine hardship'. In our
view, certainly the fact that an assessee
feels that he would be paying more tax if he
does not get the advantage of deduction under
Section 80IC of the Act, that will be
certainly a 'genuine hardship'. It would be
apposite to reproduce paragraph 4 of judgment
in K. S. Bilawala & Ors. Vs. PCIT & Ors.
(2024) 158 taxmann.com 658 (Bombay), which
reads as under:
"4. There cannot be a straight jacket
formula to determine what is genuine
hardship. In our view, certainly the fact
that an assessee feels he has paid more tax
than what he was liable to pay will
certainly cause hardship and that will be
certainly a 'genuine hardship'. This Court
in Optra Health Pvt. Ltd. v. Additional
Commissioner of Income Tax (HQ), Pune &
Ors. (Writ Petition No.15544 of 2023 dtd.
and 10 held as under:
9. While considering the genuine
hardship, the PCCIT was not expected to
consider a solitary ground as to whether
the assessee was prevented by any
substantial cause from filing the
corrections within a due time. Other
factors also ought to have been taken
into account. The phrase "genuine
hardship" used in Section 119(2)(b) of
the Act should have been construed
liberally. The Legislature has conferred
the power to condone the delay to enable
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
the authorities to do substantial
justice to the parties by disposing the
matters on merits. The expression
'genuine' has received a liberal meaning
in view of the law laid down by the Apex
Court 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
erroneous returns. Refusing to condone
the delay can result in a meritorious
matter being thrown out at the very
threshold and cause of justice being
defeated. As against this, when delay is
condoned, the highest that can happen is
that a cause would be decided on merits
after hearing the parties. When
substantial justice and technical
considerations are pitted against each
other, cause of substantial justice
deserves to be preferred, for the other
side cannot claim to have vested right
in injustice being done because of a
non-deliberate action. There is no
presumption that a delay in correcting
an error or responding to a notice of
invalid return received under Section
139(9) of the Act is occasioned
deliberately or on account of culpable
negligence or on account of mala-fides.
A litigant does not stand to benefit by
resorting to delay. In fact, he runs a
serious risk. The approach of authority
should be justice-oriented so as to
advance cause of justice. If the case of
an applicant is genuine, mere delay
should not defeat the claim. We find
support for this view in Sitaldas K.
Motwani v. Director General of Income-
tax (International Taxation), New Delhi,
relied upon by Mr. Walve, where
paragraph nos. 13 to 17 read as under :
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
"13. Having heard both the parties, we
must observe that while considering
was not expected to consider a
solitary ground so as to whether the
petitioner was prevented by any
substantial cause from filing return
within due time. Other factors
detailed hereinbelow ought to have
been taken into account.
14. The Apex Court, in the case of B.M.
Malani v. CIT [2008] 10 SCC 617, has
explained the term "genuine" in
following words:
"16. The term 'genuine' as per the
New Collins Concise English
Dictionary is defined as under :
'Genuine' means not fake or
counterfeit, real, not pretending
(not bogus or merely a ruse)'.
17. ******
18. The ingredients of genuine
hardship must be determined keeping
in view the dictionary meaning
thereof and the legal conspectus
attending thereto. For the said
purpose, another well-known
principle, namely, a person cannot
take advantage of his own wrong, may
also have to be borne in mind....."
(p. 624).
The Gujarat High Court in the case
of Gujarat Electric Co. Ltd. (supra)
was pleased to hold as under:
"... The Board was not justified in
rejecting the claim for refund on
the ground that a case of genuine
hardship was not made out by the
petitioner and delay in claiming
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
the relief was not satisfactorily
explained, more particularly when
the returns could not be filed in
time due to the ill health of the
officer who was looking after the
taxation matters of the
petitioner...." (p. 737).
The Madras High Court in the case of
R. Seshammal (P.) Ltd. (supra), was
pleased to observe as under:
"This is hardly the manner in which
the State is expected to deal with
the citizens, who in their anxiety
to comply with all the requirements
of the Act pay monies as advance tax
to the State, even though the monies
were not actually required to be
paid by them and thereafter, seek
refund of the monies so paid by
mistake after the proceedings under
the Act are dropped by the
authorities concerned. The State is
not entitled to plead the hyper
technical plea of limitation in such
a situation to avoid return of the
amounts. Section 119 of the Act
vests ample power in the Board to
render justice in such a situation.
The Board has acted arbitrarily in
rejecting the petitioner's request
for refund." (p.187)
15. The phrase "genuine hardship"
used in section 119(2)(b) should
have been construed liberally even
when the petitioner has complied
with all the conditions mentioned in
Circular dated 12-10-1993. 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 merit. The
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
expression "genuine" has received a
liberal meaning in view of the law
laid down by the Apex Court referred
to herein-above and while
considering this aspect, the
authorities are expected to bare in
mind that ordinarily the applicant,
applying for condonation of delay
does not stand to benefit by lodging
its claim late. Refusing to condone
delay can result in a meritorious
matter being thrown out at the very
threshold and cause of justice being
defeated. As against this, when
delay is condoned the highest that
can happen is that a cause would be
decided on merits after hearing the
parties. When substantial justice
and technical considerations are
pitted against each other, cause of
substantial justice deserves to be
preferred for the other side cannot
claim to have vested right in
injustice being done because of a
non-deliberate delay. There is no
presumption that delay is occasioned
deliberately, or on account of
culpable negligence, or on account
of mala fides. A litigant does not
stand to benefit by resorting to
delay. In fact he runs a serious
risk. The approach of the
authorities should be justice-
oriented so as to advance cause of
justice. If refund is legitimately
due to the applicant, mere delay
should not defeat the claim for
refund.
16. Whether the refund claim is
correct and genuine, the authority
must satisfy itself that the
applicant has a prima facie correct
and genuine claim, does not mean
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
that the authority should examine
the merits of the refund claim
closely and come to a conclusion
that the applicant's claim is bound
to succeed. This would amount to
prejudging the case on merits. All
that the authority has to see is
that on the face of it the person
applying for refund after
condonation of delay has a case
which needs consideration and which
is not bound to fail by virtue of
some apparent defect. At this stage,
the authority is not expected to go
deep into the niceties of law. While
determining whether refund claim is
correct and genuine, the relevant
consideration is whether on the
evidence led, it was possible to
arrive at the conclusion in question
and not whether that was the only
conclusion which could be arrived at
on that evidence.
17. Having said so, turning to the
facts of the matter giving rise to
the present petition, we are
satisfied that respondent No. 1 did
not consider the prayer for
condonation of delay in its proper
perspective. As such, it needs
consideration afresh."
10. This was followed by this Court in
Artist Tree (P.) Ltd. v. Central Board of
Direct Taxes, (2014) 52 taxmann.com 152
(Bombay) relied upon by Mr. Walve, where
paragraph nos. 19, 21 and 23 read as
under :
"19. The circumstance that the
accounts were duly audited way back
on 14 September 1997, is not a
circumstance that can be held against
the petitioner. This circumstance, on
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
the contrary adds force to the
explanation furnished by the
petitioner that the delay in filing
of returns was only on account of
misplacement or the TDS Certificates,
which the petitioner was advised, has
to be necessarily filed alongwith the
Return of Income in view of the
provisions contained in Section 139
of the said Act read alongwith Income
Tax Rules, 1962 and in particular the
report in the prescribed Forms of
Return of Income then in vogue which
required an assessee to attach the
TDS Certificates for the refund being
claimed. The explanation furnished is
that on account of shifting of
registered office, it is possible
that TDS Certificates which may have
been addressed to the earlier office,
got misplaced. There is nothing
counterfeit or bogus in the
explanation offered. It cannot be
said that the petitioner has obtained
any undue advantage out of delay in
filing of Income Tax Returns. As
observed in case of Sitaldas K.
Motwani (supra), there is no
presumption that delay is occasioned
deliberately or on account of
culpable negligence or on account of
mala fides. It cannot be said that in
this case the petitioner has
benefited by resorting to delay. In
any case when substantial justice and
technical consideration are pitted
against each other, the cause of
substantial justice deserves to
prevail without in any manner doing
violence to the language of the Act.
21. We find that the impugned order
dated 16 May 2006 of the CBDT also
seeks to reject the application for
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
condonation of delay on account of
delay from the date of filing the
Return of Income, i.e., 14 September
1999 upto 30 April 2002. This was not
the ground mentioned in notice dated
7 February 2006 given to the
petitioner by the CBDT for rejecting
the application for condonation of
delay. Thus the petitioner had no
occasion to meet the same. It appears
to be an afterthought. However, as
pointed out in paragraph 20
hereinabove, the delay in filing of
an application if not coupled with
some rights being created in favour
of others, should not by itself lead
to rejection of the application. This
is ofcourse upon the Court being
satisfied that there were good and
sufficient reasons for the delay on
the part of the applicant.
23. In light of the aforesaid
discussion, we are of the opinion
that an acceptable explanation was
offered by the petitioner and a case
of genuine hardship was made out. The
refusal by the CBDT to condone the
delay was a result of adoption of an
unduly restrictive approach. The CBDT
appears to have proceeded on the
basis that the delay was deliberate,
when from explanation offered by the
petitioner, it is clear that the
delay was neither deliberate, nor on
account of culpable negligence or any
mala fides. Therefore, the impugned
order dated 16 May 2006 made by the
CBDT refusing to condone the delay in
filing the Return of Income for the
Assessment Year 1997-98 is liable to
be set aside. Consistent with the
provisions of Section 119(2)(b) of
the said Act, the concerned I.T.O. or
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
the Assessing Officer would have to
consider the Return of Income and
deal with the same on merits and in
accordance with law."
The Court has held that the phrase
'genuine hardship' used in Section 119(2)
(b) of the Act should be considered
liberally. CBDT should keep in mind,
while considering an application of this
nature, that the power to condone the
delay has been conferred is to enable the
authorities to do substantial justice to
the parties by disposing the matters on
merits and while considering these
aspects, the authorities are expected to
bear in mind that no applicant would
stand to benefit by lodging delayed
returns. The court also held that
refusing to condone the delay can result
in a meritorious matter being thrown out
at the very threshold and cause of
justice being defeated. As against this,
when the delay is condoned, the highest
that can happen is that a cause would be
decided on merits after hearing the
parties. Similar issue came to be
considered in R. K. Madhani Prakash
Engineers (Supra), where paragraph 8
reads as under :
"8 Further it is recorded in the
impugned order that petitioner has
failed in proving the genuine hardship.
In this regard, we would refer to the
judgment of a Division Bench of this
court in the case of Sitaldas K.
Motwani Vs. Director General of Income
Tax (International Taxation) & Ors.,
(2009 Scc Online Bom 2195) where the
court has discussed the phrase "genuine
hardship" used in Section 119(2)(b) of
the Act. The court has held that the
phrase "genuine hardship" should be
construed liberally particularly when
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
the legislature had conferred the power
to condone the delay to enable the
authorities to do substantive justice
to the parties by disposing the matter
on merits. While considering this
aspect of genuine hardship, the
authorities are expected to bear in
mind that ordinarily applicant applying
for condonation of delay does not stand
to benefit by lodging its claim late.
More so, in the case at hand where
applicant was seeking refund of a large
amount of Rs.82,13,340/-. Refusing to
condone the delay can result in a
meritorious matter being thrown out at
the very threshold and cause of justice
being defeated. The authorities fail to
understand that when the delay is
condoned, the highest that can happen
is that the cause would be decided on
merits after hearing the parties. In
our view, the approach of the authority
should be justice oriented so as to
advance cause of justice. If refund is
legitimately due to applicant, mere
delay should not defeat the claim for
refund.
Paragraphs 13 to 16 of Sitaldas K.
Motwani (Supra) read as under:
13. Having heard both the parties, we
must observe that while considering
the genuine hardship, respondent No.
1 was not expected to consider a
solitary ground as to whether the
petitioner was prevented by any
substantial cause from filing return
within due time. Other factors
detailed herein below ought to have
been taken into account.
14. The Apex Court, in the case of
B.M. Malani v. CIT and Anr.
MANU/SC/4268/2008 : (2008) 10 SCC
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
617, has explained the term "genuine"
in following words:
16. The term "genuine" as per the New
Collins concise English Dictionary is
defined as under: 'Genuine' means not
fake or counterfeit, real, not
pretending (not bogus or merely a
ruse).
18. The ingredients of genuine
hardship must be determined keeping
in view the dictionary meaning
thereof and the legal conspectus
attending thereto. For the said
purpose, another well known
principle, namely a person cannot
take advantage of his own wrong, may
also have to be borne in mind.
The Gujarat High Court in the case of
Gujarat Electric Co. Ltd. V. CIT
MANU/G1/0407/2001: 255 ITR 396, was
pleased to hold as under:
The Board was not justified in
rejecting the claim for refund on the
ground that a case of genuine
hardship was not made out by the
petitioner and delay in claiming the
relief was not satisfactorily
explained, more particularly when the
returns could not be filed in time
due to the ill health of the officer
was looking after the taxation
matters of the petitioner.
The Madras High Court in the case of
Seshammal (R) v. ITO MANU/ TN/ 0879/
1998: (1999) 237 ITR 185 (Madras),
was pleased to observe as under:
This is hardly the manner in which
the State is expected to deal with
the citizens, who in their anxiety to
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
comply with all the requirements of
the Act pay monies as advance tax to
the State, even though the monies
were not actually required to be paid
by them and thereafter seek refund of
the monies so paid by mistake after
the proceedings under the Act are
dropped by the plea of limitation in
such a situation to avoid return of
the amounts. Section sit of the Act
vests ample power in the Board to
render justice in such a situation.
The Board has acted arbitrarily in
rejecting the petitioner's request
for refund.
15. The phrase "genuine hardship"
used in Section 119(2)(b) should have
been construed liberally even when
the petitioner has complied with all
the conditions mentioned in Circular
dated 12th October, 1993. 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 merit. 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 bare in mind that
ordinarily the applicant, applying
for condonation of delay does not
stand to benefit by lodging its claim
late. Refusing to condone delay can
result in a meritorious matter being
thrown out at the very threshold and
cause of justice being defeated. As
against this, when delay is condoned
the highest that can happen is that a
cause would be decided on merits
after hearing the parties. When
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
substantial justice and technical
considerations are pitted against
each other, cause of substantial
justice deserves to be preferred for
the other side cannot claim to have
vested right in injustice being done
because of a non-deliberate delay.
There is no presumption that delay is
occasioned deliberately, or on
account of culpable negligence, or on
account of malafides. A litigant does
not stand to benefit by resorting to
delay. In fact he runs a serious
risk. The approach of the authorities
should be justice oriented so as to
advance cause of justice. If refund
is legitimately due to the applicant,
mere delay should not defeat the
claim for refund.
16. Whether the refund claim is
correct and genuine, the authority
must satisfy itself that the
applicant has a prima facie correct
and genuine claim, does not mean that
the authority should examine the
merits of the refund claim closely
and come to a conclusion that the
applicant's claim is bound to
succeed. This would amount to
prejudging the case on merits. All
that the authority has to see is that
on the face of it the person applying
for refund after condonation of delay
has a case which needs consideration
and which is not bound to fail by
virtue of some apparent defect. At
this stage, the authority is not
expected to go deep into the niceties
of law. While determining whether
refund claim is correct and genuine,
the relevant consideration is whether
on the evidence led, it was possible
to arrive at the conclusion in
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
question and not whether that was the
only conclusion which could be
arrived at on that evidence."
(emphasis supplied)
This court in R.K. Madhani Prakash
Engineers (Supra) had quashed and set
aside the impugned order on the
ground that the impugned order is not
passed by the CBDT but only with the
approval of the Member (IT & R),
CBDT. So also in the case of TATA
Autocomp (supra) wherein paragraphs
11, 12 and 13 read as under:
"11. Moreover, the order says, "This
issues with the approval of Member
(IT&R), Central Board of Direct
Taxes" and is signed by one Virender
Singh, Additional Commissioner of
Income Tax (ITA Cell), CBDT, New
Delhi. If a personal hearing has
been granted by the Member (IT&R),
the order should have been passed by
him. Mr. Sharma states there could
be file notings. If that is so, that
has not been made available to
Petitioner.
12. In the circumstances, on these
two grounds alone, we quash and set
aside the impugned order dated 5th
December 2023 and remand the matter
to CBDT. The Member/Members shall
within three weeks from the date
this order is uploaded make
available to Petitioner all Field
Reports/ documents/ instructions
received by the CBDT from the Field
Authorities and within two weeks of
receiving the same, Petitioner shall
file, if advised, further
submissions in support of their
application for condonation of
delay.
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
13. Thereafter, an order shall be
written, passed and that order shall
be authored and signed by the Member
of CBDT, who has given a personal
hearing and when we say this, it is
not the Member holding the same
designation. The same individual who
gave a personal hearing, shall write
and sign the order. All rights and
contentions of Petitioner are kept
open. Before passing any order which
shall be a reasoned order dealing
with all submissions of Petitioner,
a personal hearing shall be given to
Petitioner, notice whereof shall be
communicated at least seven working
days in advance."
13. In our view, legislature has
conferred power on respondent no.3 to
condone the delay to enable the
authorities to do substantive justice to
the parties by disposing the matter on
merits. Routinely passing the order
without appreciating the reasons why the
provisions for condonation of delay has
been provided in the act, defeats the
cause of justice."
8. This Court in the case of Surat Smart
City Development Ltd. (supra) has also
considered the decision of the Hon'ble Apex
Court in the case of Principal Commissioner
of Income Tax v. Wipro Limited reported in
446 ITR 1 (SC) and observed as under :-
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
"17. On perusal of the above observation of the
Hon'ble Apex Court, it is also apparent that the
Hon'ble Apex Court has considered the significance
of filing declaration under Section 10B(8) of the
Act considering the provisions of Section 10B(5)
of the Act being a check to verify the correctness
of the claim of deduction at the time of filing of
return so that if an assessee claims an exemption
under the Act by virtue of Section 10B of the Act,
then the correctness of the claim has already been
verified under Sub-section (5) of Section 10B and
therefore, if the claim is withdrawn post the date
of filing of return, the report of the Accountant
filed under Section 10B(5) of the Act would become
falsified and would stand to be nullified.
However, the provisions of Section 115BAA of the
Act are in a way granting relief to the assessee-
Companies to enable them to pay the reduced rate
of tax at rate of 22% on exercise of the option on
the various conditions mentioned therein.
18. In such circumstances, the respondent No.1 was
required to consider the facts of the case by
permitting the petitioner to file a fresh Form
10IC and condoning the delay in filing such Form
by molding the prayer made by the petitioner to
treat the Form 10IC filed by the petitioner for
Assessment Year 2021-2022 to be treated as that of
for Assessment Year 2021. The provisions of
Section 119(2)(b) of the Act are meant for
redressal of the grievance and hardships caused to
the petitioner as held by the Hon'ble Madras High
Court in case of R.Seshammal (Supra) as under :
"This is hardly the manner in which the State
is expected to deal with the citizens, who
under anxiety to comply with all the
requirements of the Act pay monies as advance
tax to the State, even though the monies were
not actually required to be paid by them and
thereafter seek refund of the monies so paid
by mistake after the proceedings under the
Act are dropped by the authorities concerned.
The State is not entitled to plead the
hypertechnical plea of limitation in such a
situation to avoid return of the amounts.
Section 119 of the Act vests ample power in
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
the Board to render justice in such a
situation. The Board has acted arbitrarily in
rejecting the petitioner's request for
refund."
9. Considering the facts of the case as well
as the settled legal position, the petition
succeeds and is accordingly allowed. The
impugned order dated 02.11.2023 is hereby
quashed and set aside and the matter is
remanded to the respondent to pass a fresh
order to condone the delay in filing the
income tax return so as to enable the
petitioner to get the refund as per the
provisions of the Act.
9.1. The respondent shall also pass
appropriate order directing the Assessing
Officer to pass a fresh order qua refund in
assessment by the petitioner in accordance
with law and pass a fresh intimation under
Section 143(1) of the Act.
NEUTRAL CITATION
C/SCA/5935/2024 ORDER DATED: 23/06/2025
undefined
9.2. Such exercise shall be completed
within twelve (12) weeks from the date of
receipt of a copy of this order.
10. The petition is accordingly disposed of.
Notice is discharged.
(BHARGAV D. KARIA, J)
(PRANAV TRIVEDI,J)
phalguni
