> v. 5 421-Aswp-6089-2024.Doc

IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 6089 OF 2024 Bhatewara Associates…PetitionerVersusIncome Tax Appellate Tribunal, Pune & Ors.…Respondents Mr. Sanket Bora with Ms. Vidhi Punmiya, for Petitioner.Mr. Vikas Khanchandani, for Respondents/Revenue. CORAM:K. R. SHRIRAM &DR. NEELA GOKHALE, JJ.DATED:29[th] April 2024 PC:- 1.Petitioner, which had entered into a joint venture agreementwith one Sanghvi Premise Private Limited, for whatever reason hadnot filed its return of income (“ROI”) for Assessment Year 2011-12.Therefore, an assessment order dated 14[th] March 2024 came to bepassed. Petitioner was not given a deduction under Section 80IB ofthe Income Tax Act, 1961 (“the Act”) because of filing belated ROI.Petitioner’s appeal came to be dismissed by the Commissioner ofIncome Tax (Appeals) [CIT(A)] vide an order dated 31[st] March 2017on the same ground that Petitioner did not file the ROI on time.Petitioner challenged that order of the CIT (A) by filing an appealbefore the Income Tax Appellate Tribunal (“ITAT”). During thependency of the appeal, Petitioner also filed an application underSection 119(2)(b) of the Act before the Central Board of Direct TaxesGaikwad RD (“CBDT”). The CBDT rejected Petitioner’s application on 7[th] May2021. Against that order passed by the CBDT under Section 119(2)(b) of the Act rejecting Petitioner’s application for condonation ofdelay in filing the ROI, Petitioner preferred a writ petition being WritPetition No.4832 of 2021. That petition came to be disposed on 23[rd]August 2022. In between, Petitioner also filed application under theDirect Tax Vivad Se Vishwas Act, 2020 (“DTVSV”) which application,Mr. Bora states, is still pending. During the pendency of the writpetition before this Court, Petitioner’s appeal came to be dismissed on4[th] May 2022 on the ground that the ROI filed by Petitioner underSection 139(1) of the Act was well beyond the due date. The HighCourt in its order dated 23[rd] August 2022, condoned the delay byobserving in paragraph 22 that the Income Tax Authority shouldconsider the claim for deduction under Section 80IB(10) of the Actfor AY 2011-12 made by Petitioner in accordance with law, as if therewas no delay in filing the return. Paragraphs 21, 22 and 23 of theorder passed by the High Court read as under: “21. In our view, the affidavit of the income tax consultant whichhas neither been disputed nor controverted by the respondents issufficient cause for condonation of delay in filing the applicationunder Section 119 (2)(b) of the Act. Besides it is not in disputethat the return for AY 2011-12 was in fact filed by the petitioneralbeit 365 days later on 30[th] September, 2012. That in respect ofthe other years from 2010-11 to 2013-14 except 2011-12, theincome tax authorities have allowed the deduction under Section80 IB (10) through the petitioner. In our view, substantialinjustice would be caused to the petitioner if the order dated 7[th]May, 2021 is not set aside. This is clearly a case falling within thephrase “genuine hardship”. As mentioned above. Technicalconsideration above cannot come in the way of substantialhas neither been disputed nor controverted by the respondents issufficient cause for condonation of delay in filing the applicationunder Section 119 (2)(b) of the Act. Besides it is not in disputethat the return for AY 2011-12 was in fact filed by the petitioneralbeit 365 days later on 30[th] September, 2012. That in respect ofthe other years from 2010-11 to 2013-14 except 2011-12, theincome tax authorities have allowed the deduction under Section80 IB (10) through the petitioner. In our view, substantialinjustice would be caused to the petitioner if the order dated 7[th]May, 2021 is not set aside. This is clearly a case falling within thephrase “genuine hardship”. As mentioned above. Technicalconsideration above cannot come in the way of substantial justice. It is neither an allegation of malafide nor an allegationthat the delay has been deliberate. We do not find that theomission to file petitioner’s return by the income tax consultantto be an act of negligence. Any person in his situation wouldhave been mentally disturbed. The very fact that not only thepetitioner’s ITR was not filed in time, there were also 28 otherswhose return filing was delayed beyond the due date. Theauthorities should refrain from over analysis which leads toparalysis of justice. We are, therefore, of the view that theimpugned order dated 7[th] May 2021 deserves to be set aside andis hereby set aside. 22. The income tax authority to act accordingly and consider theclaim for deduction under Section 80 IB(10) for AY 2011-12made by the petitioner in accordance with law, as if there was nodelay in filing the return. The authorities under the DTVSV Actalso to act in accordance with the said findings and amend Form3 in respect of the amounts to be paid by the petitioner. 23. We make it clear that we have not delved into the merits ofpetitioner’s claim under Section 80 IB (10) for AY 2011-2012 andif any observation has been made in this regard, it has only beenfor considering the impugned order under Section 119 (2)(b) ofthe Act.” 2.Armed with this order of the High Court, Petitioner filed a Miscellaneous Application under Section 254(2) of the Act before theTribunal seeking to recall Tribunal’s order dated 4[th] May 2022. By anorder pronounced on 31[st] July 2023, the Tribunal rejected theMiscellaneous Application by observing that the High Court states theIncome Tax Authority and the ITAT is not an authority and there wasno apparent mistake in its order dated 4[th] May 2022 as requiredwithin the four corners of Section 254(2) of the Act. It is this order,which is impugned in this Petition. 3.Though we would agree with the view expressed by the ITATthat in the order dated 4[th] May 2022 there was no error, the ITATfailed to appreciate the spirit in which the order dated 23[rd] Augustthat in the order dated 4[th] May 2022 there was no error, the ITATfailed to appreciate the spirit in which the order dated 23[rd] August 2022 was passed by the Hon’ble High Court. The High Court hadvery categorically observed that the authority should refrain fromover analysis which leads to paralysis of justice. Therefore, the delayhaving been condoned by the High Court, we hereby quash and setaside the assessment order dated 14[th] March 2014 and remand thematter to the stage of the Assessing Officer (“AO”), who shall passfresh assessment order in accordance with law by considering theclaim for deduction under Section 80IB(10) of the Act for AY 2011-12 made by Petitioner as if there was no delay in filing the return. Infact, what we understand from paragraph 22 of the order dated 23[rd]August 2022 of the High Court is that the matter was beingremanded to the AO. Instead, Petitioner has approached the ITAT byfiling an application under Section 254(2) of the Act. 4.The AO shall pass fresh assessment order on or before 31[st]August 2024 and before he passes any order, shall give a personalhearing to Petitioner, notice whereof shall be communicated atleastfive working days in advance. The assessment order shall be areasoned order dealing with all submissions of Petitioner. 5.We hasten to add that we have not delved into the merits ofPetitioner’s claim under Section 80IB(10) of the Act for AY 2011-12. 6.Petition disposed. No order as to costs. order based on the order passed by the High Court on 23[rd] August2022, consequence thereof will be that the orders passed by theCIT(A) as well as the ITAT will also not survive. (DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)