Orissa High Court
M/S. Manpreet Engineering And vs Central Board Of Direct Taxes on 5 January, 2024
Bench: B.R. Sarangi, Murahari Sri Raman
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No. 37786 of 2023
M/s. Manpreet Engineering and .... Petitioner
Construction Company
Mr. R.P. Kar, Senior Advocate
assisted by Mr. Chitrasen Parida, Advocate
-versus-
Central Board of Direct Taxes, Delhi .... Opposite Parties
and Others
Mr. Tushar Kanti Satapathy, Senior Standing Counsel
CORAM:
ACTING CHIEF JUSTICE DR. B.R. SARANGI
MR. JUSTICE MURAHARI SRI RAMAN
ORDER
Order No. 05.01.2024
02. 1. Heard Mr. R.P. Kar, learned Senior Advocate along with Mr.
Chitrasen Parida, learned counsel appearing for the petitioner and
Mr. Tusharkanti Satapathy, learned Senior Standing Counsel for the
Opposite Parties.
2. The petitioner has filed this writ petition seeking to quash the
rejection order dated 09.11.2023 (Annexure-1) passed by the
Opposite Party No.2-Principal Commissioner of Income Tax,
Bhubaneswar-1, Bhubaneswar under Section 119(2)(b) of the
Income Tax Act (IT Act) for the assessment year 2022-23.
3. Mr. R.P. Kar, learned Senior Advocate for the petitioner
vehemently contended that the petitioner is a partnership firm and it
has been running its business in the name and style of "M/s.
Manpreet Engineering and Construction Company, Matha Sahi,
Tulasipur, Cuttack. It has been engaged in the business of works
contract. During the assessment year 2022-23, the petitioner-firm
got its books of accounts audited as per Section 44AB of the IT
Act. While the petitioner made attempt to file its return on
31.12.2022, the same could not be uploaded in the income tax e-
portal and as such the same was not accepted by the Centralized
Processing Center (CPC). Immediately thereafter, the petitioner
lodged complaint before the CPC about the technical glitches and
because of the situation, the petitioner could not upload the returns
within time. The CPC without solving the problems of the
petitioner, it rather advised the petitioner to approach the
jurisdictional Principal Commissioner of Income Tax for
condonation of delay under Section 119(2)(b) of the IT Act.
Accordingly, the petitioner filed an application on 24.04.2023
before Opposite Party No.2 -Principal Commissioner of Income
Tax under Section 119(2)(b) of the IT Act for condonation of delay
in filing the income tax return for the assessment year 2022-23 by
explaining the reason for non-filing of return in the income-tax e-
portal within the time limit prescribed under the IT Act. But the
same has not been considered in proper perspective and the
authority rejected the prayer of the petitioner. Therefore, the
petitioner approached this Court in the present application.
4. To substantiate the case, reliance has been placed on the
judgment of the High Court of Kerala at Ernakulam in W.A.
No.1420 of 2023 disposed of on 26th September, 2023 (Daisy v. The
Principal Commissioner of Income Tax) which has been filed
against a judgment of the learned Single Judge dated 24.07.2023 in
W.P.(C) No.32420 of 2017.
5. Mr. T.K. Satapathy, learned Senior Standing Counsel appearing
for the Opposite Parties vehemently objected the contentions raised
by the learned Senior Counsel appearing for the petitioner.
Referring to the counter affidavit, he contended that as per the
provisions of para 2 of the Circular 9/2015 dated 06.05.2015, the
Principal CIT has been vested with the power of
acceptance/rejection of claims if the amount of such claims is not
more than Rs.10 lakhs for any one assessment year. Since the
application for condonation of delay in filing of return for
assessment year 2022-23 relates to claim of refund of Rs.3,09,820/-
, as such it falls under the jurisdiction of Principal CIT as per the
Circular No.9/2015 dated 06.05.2015 of CBDT. Thereby, it is
contended that the authority is well justified by not acceding to the
prayer of the petitioner for condonation of delay.
6. Having heard learned counsel for the parties and considering the
materials available on records, we are of the view that it is not in
dispute that the petitioner has approached the authority for
condonation of delay for furnishing the returns for the assessment
year 2022-23 but the reasons which have been assigned by the
authority for not accepting the application for condonation of delay
cannot sustain in view of the ratio decided by the High Court of
Kerala at Ernakulam Bench. The principal question raised therein
was as to whether there were any justifiable reasons for delay in
preferring the refund application and whether such application was
considered by the Principal Commissioner on merit. But it is found
that the Principal Commissioner on the merits of the refund claim is
flawed, since he has overlooked the fact that in respect of the land
in question, the assessee had in 2006 obtained refund of the tax
deducted at source from the initial compensation amount awarded
to him for acquisition of his land. This has been observed so far as
the merits of the case is concerned.
However, so far as the merit of the case with regard to
condonation of delay is concerned, the Division Bench of the
Kerala High Court held that the issue on merit is something that has
to be considered by the assessing authority to whom the matter
must necessarily be relegated. The Principal Commissioner of
Income Tax finds that there are justifiable reasons offered by the
petitioner for the delay in preferring the claim for refund.
Therefore, since the decision on merit with regard to delay,
application for condonation of delay under Section 119(2)(b) of the
IT Act has not been taken by the Principal Commissioner, the Court
has expressed that it is compelled to remit the matter to the said
authority for fresh consideration strictly in accordance with Section
119(2)(b) of the IT Act.
7. If the ratio in Daisy's case is applied to the present case, the
compelling reasons for not filing the returns well within time
specified under the IT Act on account of hardship faced by the
petitioner, i.e. technical glitches and even if the fact is brought to
the notice of the authority, the same has not been taken into
consideration. It is noticed as stated in para 6 of the counter
affidavit that;
"6. That as regard the averment made in Para-1 of
the writ application, it is humbly submitted that as
per the provision of the para-2 of Circular 9/2015
dated 06.05.2015, the Pr. CIT has been vested with
the powers of acceptance/rejection of claims if the
amount of such claims is not more than Rs.10 lakhs
for any one assessment year. Since the application
for condonation of delay in filing of return for the
AY. 2022-23, the petitioner has claimed refund of
Rs.3,09,820/-, as such it falls under the jurisdiction
of Pr. CIT as per the Circular 9/2015 dated
06.05.2015 of CBDT.
Further, as regards of non-consideration of genuine
hardship and technical glitches, the AR intimated
the following during the hearing;
"The assessee M/s Manpreet Engineering and
Const Co., failed to file the return of income before
the due date i.e. 31st December 2022, due to certain
technical glitches in the income tax e-filing portal."
Therefore, there is no reason whatsoever has been
given by the petitioner as to why return of income
for the assessment year 2022-23 was not filed by
31.12.2022. However, no adverse inference has
been drawn by this department against this
contention."
8. In view of such position, the order dated 09.11.2023 (Annexure-
1) so passed by the authority cannot be sustained and the same is
liable to be quashed. It is hereby quashed. Consequently, the matter
is remitted to the authority to reconsider the same on the basis of
factual and legal aspects in accordance with law.
9. With the above observation and direction, the writ petition is
disposed of.
(DR. B.R. SARANGI)
ACTING CHIEF JUSTICE
(M.S. RAMAN)
JUDGE
SK Jena/Secy.
Location: High Court of Orissa, Cuttack.
