M/S Nikon Finlease Pvt. Ltd v. Pr. Commissioner Of Income Tax -04, Delhi & Ors

$~20 *IN THE HIGH COURT OF DELHI AT NEW DELHI %Date of Decision : 08.05.2025 +W.P.(C) 1654/2025 M/S NIKON FINLEASE PVT. LTD. .....PetitionerThrough:Mr Amol Sinha and Mr Ankit Kumar,Advocates.versus PR. COMMISSIONER OF INCOME TAX -04, DELHI & ORS. .....RespondentsThrough:MrGauravGupta,SSC,MrShivendra Singh, Mr Yojit Pareek,JSCsandMsPrakritiRastogi,Advocate. CORAM:HON'BLE MR. JUSTICE VIBHU BAKHRUHON'BLE MR. JUSTICE TEJAS KARIA VIBHU BAKHRU, J. (ORAL) 1.The petitioner has filed the present petition, inter alia, impugning anorder dated 09.10.2024 [impugned order] passed by the learned PrincipalCommissioner of Income Tax, Delhi – 4 whereby the petitioner’sapplication under Section 119(2)(b) of the Income Tax Act, 1961 [the Act]for condonation of delay in filing the revised income tax return inrespect of Assessment Year 2022-23, was rejected. 2.The petitioner states that it has been regularly filing its ITR for the past assessment years. It had also filed its ITR for the AY 2022-23 on03.11.2022.However, the Central Processing Centre rejected theITR filed by the petitioner on the ground that it was not accompanied by theTax Audit Report . According to the petitioner, there is norequirement for furnishing a TAR as its turnover was less than ₹10.00 Crores. 3.Accordingly, on 24.12.2022 the petitioner filed the response to thecommunication dated 14.12.2022 issued by the CPC under Section 139(9) ofthe Act. The said response was not accepted and the CPC rejected thepetitioner’s ITR on 13.12.2023 terming the same as invalid. The petitionersent a communication dated 29.01.2024 seeking to contest the rejection ofits ITR. This was followed up by raising a grievance before the CPC on08.02.2024. Thereafter, on 04.06.2024, the petitioner also submitted therepresentation to respondent no.3. 4.The petitioner’s grievance was not addressed to its satisfaction. In theaforesaid backdrop, the petitioner filed the aforesaid application underSection 119(2)(b) of the Act seeking condonation of delay in filing therevised ITR, which in a sense was to seek an opportunity to rectify thedefects as pointed out by the CPC. However, the petitioner’s applicationunder Section 119(2)(b) of the Act for condonation of delay in filing therevised ITR was rejected by the impugned order. 5.The controversy essentially relates to the rejection of the petitioner’sITR on the ground that it was not accompanied with the TAR under Section44AB of the Act. As noted above, according to the CPC, the TAR was required to accompany the ITR filed by the petitioner. 6.We consider it apposite to refer to the communication dated14.12.2022 issued by the CPC pointing out the defects in the petitioner’sITR and the probable resolution for the same. The contents of the saidcommunication are set out below: - “Error Description Tax Payer has claimed gross receipt or Incomeunder the head “Profits and gains of Business orProfession” more than 1 crore. however, books ofaccount are not audited u/s 44AB of the IncomeTax Act Probable Resolution The complete details of Profit and loss account andBalance Sheet are to be entered in Part A andtaxpayer has to e-file the audit report, specifiedunder Section 44AB.” 7.The petitioner disagreed with the resolution as suggested andcommunicated its reasons for the same. The same are set out below: - “Response Disagree Reason for disagreeing with the defect As per the provisions of Section 44AB of theIncome Tax Act-1961, the limit of tax audit isRs.10 Crores if the total amount received duringthe year in cash does not exceeds 5% of the totalreceipts and total payments made in cash duringthe year does not exceeds 5% of the totalpayments. Our cash receipt is Rs. NIL of totalreceipt of Rs.1,01,00,084 which does not exceeds5% (0%) and total cash payment is Rs.2,81,069 oftotal expenditure of Rs.98,40,439 which does notexceeds 5% (2.86%).” 7.The petitioner disagreed with the resolution as suggested andcommunicated its reasons for the same. The same are set out below: - “Response Disagree Reason for disagreeing with the defect As per the provisions of Section 44AB of theIncome Tax Act-1961, the limit of tax audit isRs.10 Crores if the total amount received duringthe year in cash does not exceeds 5% of the totalreceipts and total payments made in cash duringthe year does not exceeds 5% of the totalpayments. Our cash receipt is Rs. NIL of totalreceipt of Rs.1,01,00,084 which does not exceeds5% (0%) and total cash payment is Rs.2,81,069 oftotal expenditure of Rs.98,40,439 which does notexceeds 5% (2.86%).” 8.It is the petitioner’s case that its turnover was less than ₹10.00 Crores, and therefore, it was not required to file TAR along with the ITR. Thepetitioner claimed that it satisfied requisite conditions for the availing thebenefit of the higher turnover threshold of ₹10.00 Crores (instead of ₹1.00 Crores) as the payments made in it cash did not exceed 5 percent of the totalpayments and its cash receipts were NIL. 9.There is no cavil that in the given facts, the petitioner was notrequired to file TAR along with its ITR. The controversy essentially arisesbecause of an inadvertent clerical error that had crept in the ITR filed by thepetitioner: the petitioner had placed a tick mark in the check box “No”instead of “Yes” against the queries in paragraph (a2ii) and (a2iii) under thesection ‘Audit Information’ of the ITR.The image of the relevant portionof the ITR is set out below: - 10.Since the petitioner’s case is that its cash payment and receipts did notexceed five percent of the total receipts and payments, the petitioner wasrequired to tick the box with ‘Yes’ instead of box ‘No’. It is the petitioner’scontention that its ITR could not be rejected on this ground. However, thereis no appeal provided against the order rejecting the ITR as invalid. We do not consider it apposite to examine this question as the petitioner does notdesire to pursue any contentious proceedings and seeks rectification of itsreturn by filing the revised return.It is in the aforesaid context, thepetitioner moved the application under Section 119(2)(b) of the Act. 11.It is apparent from the above that the entire controversy has arises onaccount of checking the incorrect box in the return, which has no implicationon the assessment of the income of the petitioner. 12.It is also material to note that the petitioner’s claim that its cashreceipts are NIL and its cash payment did not exceed five percent of the totalpayments is not controverted. 13.In the peculiar facts of this case, we are of the view that the petitionerhas made out a case of genuine hardship for condonation of delay in filingthe revised ITR. Accordingly, the petition is allowed and the impugnedorder is set aside. In case the petitioner files its revised ITR for the AY2022-23 limited only to curing the aforesaid defects, within the period oftwo weeks from date, the same would be considered uninfluenced by thequestion of delay by the appropriate authority. 14.The petition is disposed of in the aforesaid terms. VIBHU BAKHRU, J TEJAS KARIA, J MAY 08, 2025MsClick here to check corrigendum, if any