A two-judge bench of the Delhi High Court has held that the omission on the part of the Chartered Accountant/ auditor would constitute a reasonable cause delay in claiming the refund by the assessee.
The assessee claimed that a sum of Rs.31,25,000/- was inadvertently left out by its auditor/chartered accountant in the calculation while filing the return. It was claimed that when it did discern the error or claim, it had applied on 12.09.2016 to the Chief Commissioner, for condoning the delay for filing the application for refund. The application was rejected by the Commissioner – on 28.03.2018. In its application, the assessee had claimed that its Chartered Accountant had inadvertently overlooked the TDS amounts, as a consequence it could not have sought an appropriate refund at the first instance or even claimed it before the period of seeking refund had expired.
The bench comprising Justice Ravindra Bhatt and Justice Prateek Jalan held that the net result of the impugned order is in effect that the petitioner’s claim of inadvertent mistake is sought to be characterized as not bonafide.
“The court is of the opinion that an assessee has to take leave of its senses if it deliberately wishes to forego a substantial amount as the assessee is ascribed to have in the circumstances of this case. “Bonafide” is to be understood in the context of the circumstance of any case. Beyond a plea of the sort the petitioner raises (concededly belatedly), there can not necessarily be independent proof or material to establish that the auditor, in fact, acted without diligence. The petitioner did not urge any other grounds such as illness of someone etc., which could reasonably have been substantiated by independent material. In the circumstances of the case, the petitioner, in our opinion, was able to show bonafide reasons why the refund claim could not be made in time,” the bench said.
“The statute or period of limitation prescribed in provisions of law meant to attach finality, and in that sense are statutes of repose; however, wherever the legislature intends relief against hardship in cases where such statutes lead to hardships, the concerned authorities – including Revenue Authorities have to construe them in a reasonable manner. That was the effect and purport of this court’s decision in Indglonal Investment & Finance Ltd. (supra). This court is of the opinion that a similar approach is to be adopted in the circumstances of the case,” the bench added.
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