In a recent case, the Gujarat High Court directed to avoid pedantic approach while considering petition under section 119(2)(b) Income Tax Act, 1961 and condoned one year delay in filing return.
The petition was filed by Nirzari Amitbhai Mehta, seeking to condone over one year delay in filing of her income tax return for an assessment year. A circular issued by CBDT in this behalf in the year 2015 stipulates that at the time of considering the case under Section 119(2)(b), it shall be ensured that the income/loss declared and /or refund claimed is correct and genuine and also that the case is of genuine hardship on merits.
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Petitioner claimed that her income tax return was filed by her lawyer for many years but, due to inadvertent delay her return could not be filed for the Assessment Year 2022-23. It was contended that she should not be deprived of legitimate refund merely for delay in filing the return, particularly without issuing any notice of hearing.
The authority had however rejected relief on the ground that Petitioner had not provided any proof to prove the genuineness of the hardship which she faced in filing the return of income, as per the 2015 Circular. The High Court observed that the Income Tax authority ought to have considered Petitioner’s application under section 119(2)(b) of the Act, without adopting any pedantic technical approach.
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A division bench of Justices Bhargav D. Karia and Mauna M. Bhatt criticised the “pedantic approach” in deciding Petitioner’s application under section 119(2)(b) of the Income Tax Act, 1961. The provision empowers Central Board of Direct Taxes ( CBDT ) to direct Income Tax authorities to allow refund/ deduction claims or any other relief under the Act, even after the expiry of prescribed limitation period.
It was viewed in Bombay Mercantile Co-op. Bank Ltd, the Bombay High Court had held that in matters of condonation of delay, a highly pedantic approach should be eschewed and a justice-oriented approach should be adopted and a party should not be made to suffer on account of technicalities.
While allowing the petition, the High Court remanded the matter back to the Income Tax authority, directing it to pass an appropriate order under Section 119(2)(b) within 12 weeks.
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