Extension of Statutory Time limit can’t be claimed as a Vested Right without any Proof: Delhi High Court [Read Judgment]

Re-Assessment Notice - Delhi High Court - Tax Scan

The Delhi High Court in the case of B.U, Bhandari Nandgude Patil Associates versus Central Board of Direct Taxes & Ors where it has been ruled that extension of the statutory time limit cannot be claimed as a vested right without any proof.

In instant case Assessee M/s B.U. Bhandari Nandgude Patil Associates, an association of persons, has filed the present writ petition.

The return for the assessment was filed after five months of its due date as per the extended time provided under Section 139(4) of the Income-tax Act. During the proceedings, AO disallowed deduction under Section 80IB of the Act on the ground that the return of income was not filed within the time limit specified under Section 139(1) as mandated and also relied on Section 80AC of the Act.

On the first appeal before the Commissioner of Income Tax (Appeals), the disallowance was upheld. Upon the second appeal before the Income Tax Appellate Tribunal, the appeal was also dismissed by holding that for claiming deduction under Section 80IB, the return of income should have been filed before the due date prescribed under Section 139(1) of the Act.

However, the Tribunal noted that petitioner had filed an application for the extension of time in the filing of the return before the CBDT and also observed that the denial of the claim for deduction under Section 80IB on account of violation of Section 80AC of the Act was justified and in accordance with law.

The Counsel for the petitioner submitted that the delay in return filing was on account of the illness of the Chartered Accountant.

The bench comprising Sanjay Khanna and Chander Shekhar noted that the impugned order also describes the queries raised before petitioner and auditor therein found that the auditor had failed to furnish the reason that he had not maintained record or evidence of illness that had occurred 8 to 9 years back. This was notwithstanding that the purported illness would have been serious and prolonged for this was the sole reason and ground for delay of 5 months.

The Tribunals do not know the nature of the illness or medical emergency suffered by the auditor and how long the auditor was not capable for work and held that there was no reasonable ground or reason for the extension of time in the filing of the return.

Finally, the bench noted that “Discipline on time limits regarding the filing of returns have to be compiled and respected unless compelling and good reasons are shown and established for the grant of extension of time. Extension of time cannot be claimed as a vested right on mere asking and on the basis of vague assertions without proof.”

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