The High Court of Allahabad has quashed an order that rejected a delay condonation application after an astonishing 20 year lapse. The Principal Commissioner had rejected the application for condonation of delay on the reason that the records of the case are unavailable.
The court found that the delay condonation application should have been decided within the time provided by the law and records would have been available at that time. Therefore, the order passed more than 20 years later, claiming the records were not available, was quashed. The Principal Commissioner was instructed to reconsider the applications, aiming to reconstruct the records with the petitioner’s assistance.
The petitioner, Sri Kailash Chand Agarwal, had filed two Income Tax returns for the assessment years 1994-95 and 1995-96 with a delay of 1095 days and 730 days respectively. These returns were accompanied by delay condonation applications.
The petitioner, represented by Sri. Shambhu Chopra and Ms. Mahima Jaiswal argued that Section 119(2)(b) of the Income Tax Act, 1961 authorises the officials to condone such delays, and circulars supporting this provision were issued by the Central Board of Direct Taxes (CBDT). Relying on the circular dated June 9, 2015, they contended that a similar circular was in place when the petitioner had filed their Income Tax Returns along with the delay condonation applications.
The petitioner’s case hinged on the belief that if the delay condonation application had been approved within the stipulated six-month window, as per various circulars, the records would have been accessible and the case could have been decided on its merits. However, the delay in processing the application spanned over two decades, leading to significant complications.
The respondent revenue, the Principal Commissioner and another, represented by Sri. Gaurav Mahajan argued that the returns for the assessment years 1994-95 and 1995-96 were not filed within the prescribed time limit of June 30, 1994, and June 30, 1995, respectively, rendering them nonest returns, which could not be looked into.
The respondent revenue requested another opportunity to assess the case and pledged to reconstruct the records, including TDS receipts, with the petitioner’s cooperation. Additionally, they promised the petitioner a fair hearing in the process.
The High Court ruled in favour of the petitioner and emphasised that when the delay condonation application was filed on March 30, 1998, it should have been decided within the timeframe set by the Income Tax Act, 1961. At that juncture, all the records would have been readily available for examination.
The bench concluded that the order dated October 24, 2019, which had been issued after more than two decades, citing the unavailability of records, must be set aside. The Court declared the order null and void.
The Principal Commissioner of the Income Tax Department – I, Agra, was tasked with revisiting the petitioner’s applications, originally filed on March 30, 1998. During this review, every effort must be made to reconstruct the records with the petitioner’s cooperation and by utilising all available resources. Furthermore, the petitioner is to be afforded a proper hearing throughout this process.
In result, the division bench comprising Justice Siddhartha Varma and Justice Manoj Bajaj quashed the order rejecting the delay condonation application after 20 years and the Principal Commissioner was instructed to reconsider the applications, aiming to reconstruct the records with the petitioner’s assistance.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
