The Madras High Court has condoned the delay of Income Tax Returns ( ITR ) filed beyond the due date on grounds of delay in receiving audit report and covid. The high court has granted relief to an agricultural society considering the genuine hardships which will be faced by the members of the society due to the delay in ITR filing.
The High Court addressed two writ petitions filed in 2024, challenging an order rejecting an application under Section 119(2)(b) of the Income Tax Act, 1961, and a consequential intimation under Section 143(1) of the Income Tax Act.
The petitioner, an Agricultural Co-operative Credit Society, pointed out that as per the Tamil Nadu Co-operative Societies Act, 1983, it is mandatory to subject its books of accounts to statutory audit. The audit for the financial year 2018-2019, corresponding to the assessment year 2019-2020, was completed on 30.09.2019. However, the audit report was received only in December 2019.
The petitioner claimed that they were unaware of the requirement to file the return of income within the stipulated period due to amendments in Section 80AC of the Income Tax Act under the Finance Act, 2018. The COVID-19 pandemic further delayed their filing, which was eventually done on 30.06.2020. Subsequently, the application under Section 119(2)(b) was rejected.
Ms.N.V.Lakshmi appeared for Mr.N.V.Balaji, the Counsel for the petitioner argued that being a small co-operative credit society with a modest turnover, the petitioner would face significant hardship if the delay in filing the return of income was not condoned.
On the contrary, Dr. B. Ramaswamy, senior standing counsel, representing the respondents, contended that adherence to statutory mandates is essential, and indulgence should not be granted to those who fail to comply.
The bench noted that “On examining the impugned order, it is clear that the Chief Commissioner of Income Tax was conscious of the fact that the audit was completed only on 30.09.2019. The said date was the original deadline for filing the return of income. Although the petitioner asserted in the application that the return was received only on 31.12.2019, the said aspect was not taken cognizance of in the impugned order.”
It was further observed that while the petitioner had not provided evidence of the date of receipt of the audit report, they had consistently asserted that it was received in December 2019.
However, considering the nature and scale of the petitioner’s society, a Single bench Justice Senthilkumar Ramamoorthy acknowledged that there would be genuine hardship if the delay in filing the return of income was not condoned. Citing precedents of the same Madras High Court and Bombay High Court where Section 119(2)(b) of Income Tax Act was construed liberally, the Court deemed it appropriate to condone the delay in this case.
Consequently, the writ petitions were allowed and the orders were quashed.
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