Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) ================================================================

C/SCA/6097/2020 JUDGMENT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 6097 of 2020With CIVIL APPLICATION (FOR FIXING DATE OF HEARING) NO. 1 of 2020 In R/SPECIAL CIVIL APPLICATION NO. 6097 of 2020 FOR APPROVAL AND SIGNATURE: ================================================================SARVODAYA CHARITABLE TRUST VersusINCOME TAX OFFICER (EXEMPTION) ================================================================ Appearance: MR B S SOPARKAR(6851) for the Petitioner(s).MRS MAUNA M BHATT(174) for the Respondent(s).================================================================ CORAM: HONOURABLE MR. JUSTICE J.B.PARDIWALAandHONOURABLE MR. JUSTICE ILESH J. VORA Date : 09/12/2020 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1.By this writ-application under Article 226 of theConstitution of India, the writ-applicant, a public charitabletrust, has prayed for the following reliefs : “(a)quash and set aside the impugned orders atAnnexure-A to this petition and direct the respondent no.2 tocondone the delay; (b)pending the admission, hearing and final disposal ofthis petition, to stay implementation and operation of theimpugned notice dated 28.8.2018 at Annexure-C to thispetition. (c)any other and further relief deemed just and proper begranted in the interest of justice;” 2.The facts giving rise to this writ-application may besummarised as under : 3.The writ-applicant is a public charitable trust. Thewrit-applicant seeks to challenge the order passed by therespondent no.2 dated 19[th] August 2019 under Section 119(2)(b)of the Income Tax Act, 1961 (for short, ‘the Act 1961’), rejectingthe application filed by the writ-applicant for condonation ofdelay in filing the Form no.10B of the Act 1961 for the Assessment Year 2016-17. The writ-applicant also seeks tochallenge the rectification order dated 12[th] February 2020,wherein the respondent no.2 rejected the rectificationapplication. 4.It is the case of the writ-applicant that being a publiccharitable trust, it is registered with the Charity Commissioneras well as with the Income Tax authorities under Section 12A ofthe Act 1961 past more than 30 years. The books of accounts ofthe writ-applicant are being audited regularly and the return ofincome is also filed without any issues. For the Assessment Year2016-17, the due date for filing the return of income wasextended from 30[th] September 2016 to 17[th] October 2016 videorder under Section 119 of the Act 1961 dated 9[th] September2016. The Auditor of the writ-applicant filed the audit report inthe Form no.10B under Section 12A(b) of the Act 1961 on 6[th]October 2016. The said document was required to be confirmedby the writ-applicant using the online account. Unfortunately,the trustees of the trust failed to confirm the same and, as aresult, the audit report did not get e-filed alongwith the return ofincome. 5.An order under Section 143(1) came to be passed dated17[th] March 2018 rejecting the benefit of exemption to thewrit-applicant and a demand notice for Rs.1,67,41,980=00 cameto be issued on 28[th] August 2018. The notice referred to abovestated the reason for demand on account of non e-filing of theaudit report in the Form no.10B and suggested that the samemay be filed with a request to condone the delay. 6.It is the case of the writ-applicant that the aforesaid noticeultimately brought the fact to their knowledge as regards thenon-filing of the audit report. 5.An order under Section 143(1) came to be passed dated17[th] March 2018 rejecting the benefit of exemption to thewrit-applicant and a demand notice for Rs.1,67,41,980=00 cameto be issued on 28[th] August 2018. The notice referred to abovestated the reason for demand on account of non e-filing of theaudit report in the Form no.10B and suggested that the samemay be filed with a request to condone the delay. 6.It is the case of the writ-applicant that the aforesaid noticeultimately brought the fact to their knowledge as regards thenon-filing of the audit report. 7.On receipt of the demand notice dated 28[th] August 2018referred to above, the writ-applicant e-filed the audit report inthe Form no.10B on 2[nd] September 2018 and requested tocondone the delay vide letter dated 5[th] September 2018addressed to the respondent no.2. The respondent no.2, vide hisreply dated 23[rd] October 2018, informed the writ-applicant thatno ground for condonation of delay was made out and that itwas only after the issuance of the demand notice that thewrit-applicant had e-filed the audit report. 8.On 12[th] November 2018, the writ-applicant replied to therespondent no.2 explaining the entire chain of events andrequested to condone the delay. However, another notice dated26[th] December 2018 came to be issued to the writ-applicantasking the trustees or any legal representative to remain presentwith the documentary evidence for the purpose of substantiatingthe claim. 9.The writ-applicant appeared before the respondent no.2and tried to make good its case for the purpose of condonationof delay. However, the application ultimately came to be rejectedvide the order dated 19[th] August 2019. 10.It appears from the materials on record that relying on theCircular No.10 of 2019 issued by the Central Board of DirectTaxes, a rectification application came to be filed by thewrit-applicant before the respondent no.2. However, vide orderdated 12[th] February 2020, the rectification application also cameto be rejected. 11.Being dissatisfied with the two orders referred to abovepassed by the respondent no.2, the writ-applicant is here beforethis Court with the present writ-application. SUBMISSIONS ON BEHALF OF THE WRIT-APPLICANT : 12.Mr.B.S.Soparkar, the learned counsel appearing for thewrit-applicant vehemently submitted that the impugned orderspassed by the respondent no.2 are patently errorneous in law.According to Mr.Soparkar, the respondent no.2 ought to haveappreciated that it was a bonafide mistake on the part of thetrustees who believed that it was the Auditor who was obliged toupload all the required documents without any follow-up actionon their part. Mr.Soparkar would submit that it was only afterthe exemption was disallowed and demand was raised that theissue came to the knowledge of the writ-applicant. It is arguedthat the delay in electronically filing was caused due to thecircumstances beyond the control of the writ-applicant. 13.It is also pointed out that the writ-applicant filed the reportimmediately upon having come to know that the audit reportcould not be uploaded in accordance with law. 14.Mr.Soparkar would submit that the respondent no.2 oughtto have adopted a liberal approach for the purpose of condoningthe delay rather than adopting a highly pedantic approach. 15.Mr.Soparkar, in support of his above noted submissions,has placed reliance on the following two decisions of this HighCourt : (1) Jai Vijay Express Carriers vs. Commissioner of IncomeTax-III, (2013)34 taxmann.com 61 (Gujarat);Tax-III, (2013)34 taxmann.com 61 (Gujarat); (2) Commissioner of Income Tax-IV vs. Xavier Kelavani Mandal(P) Ltd., (2014)41 taxmann.com 184 (Gujarat)(P) Ltd., (2014)41 taxmann.com 184 (Gujarat) 16.In such circumstances referred to above, Mr.Soparkarprays that there being merit in his writ-application, the samemay be allowed and the two impugned orders be quashed andset-aside. SUBMISSIONS ON BEHALF OF THE RESPONDENTS : 15.Mr.Soparkar, in support of his above noted submissions,has placed reliance on the following two decisions of this HighCourt : (1) Jai Vijay Express Carriers vs. Commissioner of IncomeTax-III, (2013)34 taxmann.com 61 (Gujarat);Tax-III, (2013)34 taxmann.com 61 (Gujarat); (2) Commissioner of Income Tax-IV vs. Xavier Kelavani Mandal(P) Ltd., (2014)41 taxmann.com 184 (Gujarat)(P) Ltd., (2014)41 taxmann.com 184 (Gujarat) 16.In such circumstances referred to above, Mr.Soparkarprays that there being merit in his writ-application, the samemay be allowed and the two impugned orders be quashed andset-aside. SUBMISSIONS ON BEHALF OF THE RESPONDENTS : 17.On the other hand, this writ-application has beenvehemently opposed by Ms.Mauna Bhatt, the learned senior standing counsel appearing for the Revenue. Ms.Bhatt wouldsubmit that no error, not to speak of any error of law, could besaid to have been committed by the respondent no.2 in passingthe two impugned orders. 18.Ms.Bhatt would submit that although the audit report inthe Form no.10B was to be filed along with the return of income,yet the assessee failed in doing so. It is argued that therespondent no.2 has thought fit, in exercise of his discretion, notto condone the delay and such discretion cannot be said to havebeen exercised arbitrarily or unjudiciously. 19.Ms.Bhatt would submit that in the case on hand, theCommissioner has recorded cogent reasons while declining tocondone the delay. She would submit that the two decisions ofthis High Court upon which reliance is placed on behalf of thewrit-applicant has, on the contrary, sounded a note of cautionthat the powers should be exercised cautiously with due careand circumspection and not in a routine manner only to extendthe limitation provided by the Act. Ms.Bhatt has expressed astrong apprehension about a difficulty that may arise ifultimately the two impugned orders are quashed and the Formno.10B is ordered to be taken on record. According to her, as perthe proviso to Section 142(2) of the Act, no notice can be servedon the assessee after the expiry of six months from the end ofthe financial year in which the return is furnished. She wouldsubmit that the said date has elapsed. Similarly, according toMs.Bhatt, no notice under Section 142(1) of the Act can beissued as the time limit for passing the assessment order under Section 143(3) of the Act has also expired. She would argue thateven after the writ-applicant is allowed to upload the Formno.10B along with the audit report, the veracity thereof isrequired to be ascertained. It will also have to be ascertained,whether the writ-applicant is eligible to the benefits/exemptionunder Section 11 of the Act. She would submit that the timelimit as aforesaid has expired. 20.In the last, Ms.Bhatt submitted that if ultimately thisCourt is convinced that sufficient cause has been assigned bythe writ-applicant for the purpose of condonation of delay, thenthis Court may clarify that despite the time period havingexpired, it shall be open for the department to issue notice underSection 143(2) of the Act or Section 142(1) of the Act, as the casemay be. 21.In such circumstances referred to above, Ms.Bhatt praysthat there being no merit in this writ-application, the same maybe rejected. ANALYSIS : 22.Having heard the learned counsel appearing for the partiesand having gone through the materials on record, the onlyquestion that falls for our consideration is, whether therespondent no.2 committed any error in passing the impugnedorders. 23.For the purpose of seeking condonation of delay, thewrit-applicant moved an application filed under Section 119(2) ofthe Act addressed to the Principal Commissioner of Income Tax(Exemption), stating as under : “Re: Condonation of delay in Form No.10B in case ofSarvodaya Charitable Trust for A.Y. 2016-17. P.A. No.AABTS2931H Sir, 21.In such circumstances referred to above, Ms.Bhatt praysthat there being no merit in this writ-application, the same maybe rejected. ANALYSIS : 22.Having heard the learned counsel appearing for the partiesand having gone through the materials on record, the onlyquestion that falls for our consideration is, whether therespondent no.2 committed any error in passing the impugnedorders. 23.For the purpose of seeking condonation of delay, thewrit-applicant moved an application filed under Section 119(2) ofthe Act addressed to the Principal Commissioner of Income Tax(Exemption), stating as under : “Re: Condonation of delay in Form No.10B in case ofSarvodaya Charitable Trust for A.Y. 2016-17. P.A. No.AABTS2931H Sir, (1)We are in receipt of your letter dated 23.10.2018(received on 29.10.2018) seeking the reasons forcondonation of delay in filing Form No.10B. In this regard,we submit as under : (2)The assessee is a charitable Trust primarily running aschool named Ishvarlal Gulabbhai Desai Vidya Sankul inthe name of freedom fighter Late Shri Ishvarlal GulabbhaiDesai to provide education to the children primarily of theslum and those coming from low-level income. Activities ofthe Trust are attached (Page No.1). (3)The Trust is registered with the Charity Commissionervide Registration No.E-2357-Surat, as per the BombayPublic Trust Act, 1950 (Page No.2). (4)The Trust is also registered with the Income-tax Act,1961 u/s.12A (Page No.3) and enjoys recognition u/s.80G(5)of the Act (Page No.4). (5)The Trust has been scrutinized by the Income-taxDepartment from time to time. Copy of assessment order forA.Y.2010-11 is attached (Page No.5 to 7). (6)With the above, it is clear that the Trust is a bonafideTrust rendering charitable activities, accepted by thedepartment time and again. (7)Form No.10B is required to be filed on on-line as perRule 17B by the statutory auditors of the Trust in theirlog-in. The trustees of the Trust remained under theimpression that the auditors of the Trust would have filedForm No.10B from his log-in in compliance with thenecessary requirements. Only after demand springing fromthe e-portal that the Trust realized that the auditor hadfailed to furnish Form No.10B. (8)The Trust has always been mindful in its compliance.Hence, Form No.10B furnished by the Trust of last 7 yearsare stated below. Asst. Date of furnishing Form 10BPage No.Year2018-19Entire Income is exempt u/s.10(23C)8-11 (iiiab) of the Act. Hence Form 10B was 2017-18not required to be filed.2016-1717.10.201612-142015-1630.9.201515-192014-1529.9.201420-222013-1429.9.201323-252012-1330.9.201226-30 (9)Given the above, the lapse occurred only for one yearand that too on account of oversight. Therefore, it is urgedthat relief u/s.11 may kindly not be denied on account of ahyper-technical lapse. (10)To support the above, an affidavit is attached (PageNo.31 to 32). (11)In the matter, reliance is placed on the followingdecisions. Sr. CitationNameBrief SummaryNo.146-DTR-30Sir Kikabhai Non-filing of audit report with return – 2 (Mumbai Premchand Assessee's chartered accountant 'E')Trusthaving filed an affidavit affirming thathe has conducted the audit of assessee's accounts and issued auditreport in Form No.10B which was not filed along with the return due to oversight, provisions of s.12A(1)(b) stand complied with and assessee is entitled to exemption under s.11. C/SCA/6097/2020 JUDGMENT (10)To support the above, an affidavit is attached (PageNo.31 to 32). (11)In the matter, reliance is placed on the followingdecisions. Sr. CitationNameBrief SummaryNo.146-DTR-30Sir Kikabhai Non-filing of audit report with return – 2 (Mumbai Premchand Assessee's chartered accountant 'E')Trusthaving filed an affidavit affirming thathe has conducted the audit of assessee's accounts and issued auditreport in Form No.10B which was not filed along with the return due to oversight, provisions of s.12A(1)(b) stand complied with and assessee is entitled to exemption under s.11. C/SCA/6097/2020 JUDGMENT 2.42-SOT-40Sir Kikabhai Assessee had not filed audit report in 3 (Mumbai)Premchand Form No.10B along with return of Trustincome. Along with return of income, assessee had filed report of auditor which was required to be given under Bombay Public Trust Act, 1950. On facts, assessee's plea that report in Form No.10B, which was similar to report under Bombay Public Trust Act,1950, was not obtained due to oversight, could be accepted. It was tobe held that assessee had complied with provisions of section 12A(1)(b) and, therefore, it was entitled to exemption under section 11. (12)Considering all the above, it is requested to kindlycondone the delay and oblige. Please appreciate thatsubstantial relief should not be denied to the Trust solely onthe ground that the auditors of the Trust had failed tofurnish Form No.10B particularly when the Trust compliedwith all the other conditions.” 24.The respondent no.2, however, declined to condone thedelay and rejected the said application by the impugned orderdated 19[th] August 2019 (Annexure-A), assigning the followingreasons in the impugned order : “-ORDER U/S.119(2)(b) OF THE INCOMETAX ACT, 1961 The applicant, Sarvodaya Charitable Trust has filed anapplication dated 05.09.2018 in the office on 19.09.2018,for condonation of delay in filing Form No.10B of the I.T. Act,1961 for the A.Y. 2016-17. The application stated that the assessee received notice of demand of Rs.1,67,41,980/-fromCPC,Bangaloreunderreferenceno.CPC/1617/C94/1803900360 dated 28.08.2018. Thereason provided therein by CPC for raising of demand wasnon filing of Audit report in Form 10B. The assesseethereafter filed Form 10B on 02.09.2018 and submittedapplication for Condonation of delay. 2.As no specific reason was given in the application forthe delay in filing Audit Report in Form No.10B, show causenotice was issued to the assessee vide letter dated23.10.2018. In response to the show cause notice theassessee submitted a detailed reply vide letter dated12.11.2018 filed in this office on 13.11.2018. The assessee,in its reply, further submitted that the assessee trust isprimarily running a school named Ishvarlal Gulabbhai DesaiVidya Sankul providing education to the children from slumand low income group and it has been regularly filing itsreturn of income and Form 10B on time. It was under theimpression that the statutory auditors of the Trust wouldhave filed Form 10B for A.Y. 2016-17 on time. However, itwas only on receipt of notice of demand from CRC,Bangalore that it realized that Form 10B has not been filedby its auditor. Applicant Trust has also filed an affidavitduly signed by one of its trustees namely Shri ParimalGunvantlal Desai affirming on solemn above facts of thecase. It has also relied upon the Judgement of ITAT, MumbaiBench ‘E’ rendered in the case of ITO, Mumbai v. Shri Kikabhai Premchand Trust (2010)42 SOT 403 (Mum.)submitting that the facts are squarely applicable to the factsof its case. The assesse was granted one more opportunityof being heard, vide this office letter dated 26.12.2018 toprocuce documentary evidence to substantiate its claim.However, in response thereto, the assessee, vide letterdated 09.01.2019 sought adjournment of the hearing.Acceding to the request of the applicant, another letter wasissued on 05.04.2019 to submit documentary evidence topresent its case. The Trustee and Secretary namely ShriParimal Desai attended on 18.04.2019 and stated that itrelied on its earlier submission filed on 13.11.2018. 3.The reply of the assessee is carefully examined in lightof CBDT’s circular no.10/2019 dated 22.05.2019. In para4(ii) of the said circular, it has been emphasized that theCommissioner shall satisfy himself that the assessee wasprevented by reasonable cause from such belatedapplication in filing Form no. 10B within the stipulated time.After going through the submission of the applicant, it isfound that it does not meet the criteria of Para 4(ii) ofreasonable cause which prevented it from timelycompliance. In the present case, Form no. 10B was to bee-filed on or before 17.10.2016 but it was e-filed on02.09.2018, after a gap of 23 months, more so when filingof return of income for Assessment years i.e. 2017-18 wasover. Simply saying that the trustees of the trust remainedunder the impression that the auditor of the trust would have filed Form no.10B audit report in Form no. 10B couldnot be filed is not acceptable. 4.It should be noted the Legislature has provided timelimits for certain obligations under the Act and these timelimits have to be observed to be able to claim certaindeductions, allowances and avoid interest and penalty. Ifthese time limits were to be relaxed in a particular case,mere fact that a default occurred due to some reason is notenough to establish the claim of genuine hardship.Discipline on time limits regarding uploading Audit report inForm no.10B online have to be complied and respected,unless compelling and good reasons are shown andestablished for grant of extension of time. Extension of timecannot be claimed as a vested right on mere asking and onthe basis of vague assertions without proof. 5.In determining whether genuine hardship is caused tothe assessee, one has to see whether the delay in filingaudit report in Form no.10B electronically was due to areasonable cause or not. In this case, delay is stated to beattributed to the Auditor. However in such a case one has tosee whether the assessee pursued the matter due todiligence to get his audit report in Form no. 10B uploaded intime. 6.There is no details and evidences on record filed bythe assessee in supoort of such contention. When the otherfunctions of filing of return of income and other formalitieswere being taken care of by the said auditor then why suchfailure can be attributed on the accountant ? The said pleataken by the applicant is therefore, unaccepted. Moreover,the assessee’s activities are of high volume as is evidentfrom the facts that in the year under consideration, theassessee has shown gross income of Rs.3,85,99,831/- andamount applied towards charitable purposes in India wasRs.3,82,80,458/-. This magnitude itself speaks that thetrustees of the trust could have paid attention for making thelegal compliances. Thus, the sole condition applicable to thefacts of the case mentioned in circular no. 10/2019 does notget fulfilled. Thus the reason cannot be taken as ‘GenuineHardship’ which prevented it from timely compliance.Further, the case law relied upon by the applicant i.e. ITO(E)(11)(1), Mumbai vs Sir Kikabhai Premchand Trust renderedby ITAT, Mumbai Bench ‘E’ is not applicable to the facts ofthe case as in the above case. 7.Having gone through the above facts, I am of theopinion that the assessee has not shown any genuinehardship on account of which the lapse occurred. It hasmerely passed on the blame on the auditors that too withoutany supporting evidences. By assigning any work to any extemal agency the onus of statutory duty does not getshifted. As per provisions of section 12A(1)(b) of I.T. Act, theassessee should have ensured that the audit report dulysigned by the accountant, as defined in Explanation belowsub-section (2) of section 288 of the Act, is submittedalongwith the retum of income on time. As the lapse is onthe part of the assessee without any genuine cause, there isno reason for which Condonation can be granted. Therefore,in exercise of the powers conferred on me u/s 119(2)(b) ofthe Act, I hereby reject the Condonation application for delayin filing the Form No.10B for the A.Y. 2016-17.” 25.The rectification application also came to be rejected videorder dated 12[th] February 2020. The order reads thus : “The applicant trust vide letter filed in this office on19.9.2018 has requested to condone the delay in filing ofForm 10B for A.Y. 2016-17 on account of the reasonsmentioned in the application. The assessee has attachedcopy of documents to substantiate its claim. The saidapplication of the assessee was disposed off by an orderdated 19.8.2019, by the then Commissioner of Income Tax(Exemptions), Ahmedabad, wherein the application of theassessee was rejected. 2.The assessee vide application dated 9.9.2019requested for rectification of the order dated 19.8.2019.Accordingly, the assessee was given an opportunity of being C/SCA/6097/2020 JUDGMENT heard on 27.11.2019. The assessee requested foradjournment. Accordingly, an another opportunity of beingheard was given on 10.12.2019. The assessee againrequested for adjournment vide letter dated 10.12.2019.Therefore, a final opportunity was given to the assessee on9.1.2020. In response the representative of the assesseeattended and case discussed. Further, the assesseefurnished a letter dated 13.1.2020, wherein it wassubmitted that Form No.10B was uploaded by the auditor ofthe assessee in the e-filing portal on 17.10.2016, however,as the trustees were unaware of the procedure they did notapprove the Form No.10B by the due date. The Form No.10Bwas uploaded on 1.9.2018. The assessee has accordinglyrequested that the delay has occurred due to a bonafidereason and therefore, requested for rectification of the orderdated 19.8.2019. 3.I have examined the submissions made by theassessee and also perused order dated 19.8.2019 passedu/s.119(2)(b) of the I.T. Act (which is sought to be rectifiedby the assessee). In para nos.5 & 6 of order dated19.8.2019, detailed reasons have been given as to why thecase of assessee is not covered under 'reasonable cause' asper the requirements of para no.4(ii) of CBDT CircularNo.10/2019 dated 22.5.2019. The submissions made bythe assessee were duly considered in this order beforerejecting assessee's contention (as is summarised in parano.7 of said order). The assessee has failed to point out asto how there is mistake apparent from records which maybe rectified under Section 154 of the I.T. Act. 3.I have examined the submissions made by theassessee and also perused order dated 19.8.2019 passedu/s.119(2)(b) of the I.T. Act (which is sought to be rectifiedby the assessee). In para nos.5 & 6 of order dated19.8.2019, detailed reasons have been given as to why thecase of assessee is not covered under 'reasonable cause' asper the requirements of para no.4(ii) of CBDT CircularNo.10/2019 dated 22.5.2019. The submissions made bythe assessee were duly considered in this order beforerejecting assessee's contention (as is summarised in parano.7 of said order). The assessee has failed to point out asto how there is mistake apparent from records which maybe rectified under Section 154 of the I.T. Act. 4.It is relevant to note that the Hon'ble Supreme Court inthe case of T.S.Balaram, ITO vs. Volkart Bros (1971) 82 ITR40 (SC) held that “a mistake apparent on the record” mustbe an obvious and patent mistake and not something whichcan be established by a long drawn process of reasoning onpoints on which there may be conceivably two opinions. Adecision on a debatable point of law is not a mistakeapparent from the record. Further, 'mistake' meanscommission that is not designed and which is obvious andsomething which has two opinions or which is debatable ashas been held in the case of CIT vs. Lakshmi Prasad Lahkar(1996) 220 ITR 100 (GAU). 5.After considering the submissions of the assessee andon perusal of documents on file it is seen there is noapparent mistake in the records, with regard to the orderdated 19.8.2019, passed under section 119(2)(b) of theIncome Tax Act, 1961, which requires rectification.Therefore, the application for rectification is rejected.” 26.Mr.Soparkar, the learned counsel is right in hissubmission that a fair and dispassionate view of the facts oughtto have persuaded the respondent no.2, who possesses widediscretion in the matter under Section 119 of the Act, to condonethe delay and allow the assessee to avail the said exemptionunder Section 12 of the Act being a public charitable trust. 27.We should look into the position of law as regards thesubject matter of this writ-application : (i)In Artist Tree Pvt. Ltd. vs. Central Board of Direct Taxesand others, (2014) 369 ITR 691 (Bombay). The relevantparagraphs 11 to 14 and 23 of the said judgment are quotedbelow for ready reference : “11. The expression 'genuine hardship' came up forconsideration of the Supreme Court in the case ofB.M.Malani (supra), wherein, by reference to New CollinsConcise English Dictionary, the Supreme Court accepted theposition that "genuine" means not fake or counterfeit, real,not pretending (not bogus or merely a ruse). Further, agenuine hardship would, inter alia, mean a genuinedifficulty. The ingredients of genuine hardship, must bedetermined keeping in view the dictionary meaning thereofand legal conspectus attending thereto. For the saidpurpose, another well known principle, namely, that aperson cannot take advantage of his own wrong, may alsohave to be borne in mind. Compulsion to pay any unjustdues per se would cause hardship. But a question as towhether the default in payment of the amount was due tocircumstances beyond the control of the assessee, alsobears consideration. 12. In the case of R. Seshammal (supra), the Madras HighCourt was pleased to observe as under (page 187 of 237ITR): 12. In the case of R. Seshammal (supra), the Madras HighCourt was pleased to observe as under (page 187 of 237ITR): “This is hardly the manner in which the State isexpected to deal with the citizens, who in their anxietyto comply with all the requirements of the Act paymonies as advance tax to the State, even though themonies were not actually required to be paid by themand there after seek refund of the monies so paid bymistake after the proceedings under the Act aredropped by the authorities concerned. The State is notentitled to plead the hyper technical plea of limitationin such a situation to avoid return of the amounts.Section 119 of the Act vests ample power in the Boardto render justice in such a situation. The Board hasacted arbitrarily in rejecting the petitioner's request forrefund.” 13. In the case of Sitaldas Motwani (supra), this court hasheld that the expression "genuine hardship" used in section119(2)(b) of the said Act should be construed liberally,particularly in matters of entertaining of applicationsseeking condonation of delay. This court was pleased toobserve as under (page 228 of 323 ITR): “The phrase 'genuine hardship' used in section 119(2)(b) should have been construed liberally even whenthe petitioner has complied with all the conditionsmentioned in Circular dated October 12, 1993. TheLegislature has conferred the power to condone delayto enable the authorities to do substantive justice to the parties by disposing of the matters on the merits.The expression 'genuine' has received a liberalmeaning in view of the law laid down by the apexcourt referred to hereinabove and while consideringthis aspect, the authorities are expected to bear inmind that ordinarily the applicant, applying forcondonation of delay does not stand to benefit bylodging its claim late. Refusing to condone delay canresult in a meritorious matter being thrown out at thevery threshold an cause of justice being defeated. Asagainst this, when delay is condoned the highest thatcan happen is that a cause would be decided on themerits after hearing the parties. When substantialjustice and technical considerations are pitted againsteach other, the cause of substantial justice deserves tobe preferred for the other side cannot claim to have avested right in injustice being done because of a non-deliberate delay. There is no presumption that delay isoccasioned deliberately, or on account of culpablenegligence, or on account of mala fides. A litigant doesnot stand to benefit by resorting to delay. In fact heruns a serious risk. The approach of the authoritiesshould be justice oriented so as to advance the causeof justice. If refund is legitimately due to the applicant,mere delay should not defeat the claim for refund.” 14. In the case of Bombay Mercantile Co-operative Bank Ltd.(supra), this court again observed that it is well settled thatin matters of condonation of delay highly pedantic approachshould be eschewed and a justice-oriented should be adopted. It also observed that a party should not be made tosuffer on account of technicalities. 23. In the light of the aforesaid discussion, we are of theopinion that an acceptable explanation was offered by thepetitioner and a case of genuine hardship was made out.The refusal by the Central Board of Direct Taxes to condonethe delay was a result of adoption of an unduly restrictiveapproach. The Central Board of Direct Taxes appears tohave proceeded on the basis that the delay was deliberate,when from the explanation offered by the petitioner, it isclear that the delay was neither deliberate nor on account ofculpable negligence or any mala fides. Therefore, theimpugned order dated May 16, 2006, made by the CentralBoard of Direct Taxes refusing to condone the delay in filingthe return of income for the assessment year 1997-98 isliable to be set aside.” 23. In the light of the aforesaid discussion, we are of theopinion that an acceptable explanation was offered by thepetitioner and a case of genuine hardship was made out.The refusal by the Central Board of Direct Taxes to condonethe delay was a result of adoption of an unduly restrictiveapproach. The Central Board of Direct Taxes appears tohave proceeded on the basis that the delay was deliberate,when from the explanation offered by the petitioner, it isclear that the delay was neither deliberate nor on account ofculpable negligence or any mala fides. Therefore, theimpugned order dated May 16, 2006, made by the CentralBoard of Direct Taxes refusing to condone the delay in filingthe return of income for the assessment year 1997-98 isliable to be set aside.” (ii)In Jay Vijay Express Carriers vs. Commissioner of IncomeTax-III, (2013) 34 taxmann.com.61 (Gujarat), in relevantparagraph 16 of the said judgment, this Court held as under : “16. In our opinion, in the present case, there would begenuine hardship, if the time limit is not extended asotherwise, the entire claim of Rs.17,84,323/- would bedestroyed. The petitioner would neither get deduction in theassessment year 2005-06 nor in the year 2008- 09 as perthen prevailing Section 40(a)(ia) of the Act. In our opinion,the petitioner was neither lethargic nor lacking in bona fides in making the claim beyond the period of limitation, whichshould have a relevance to the desirability and expediencefor exercising such power. Before proceeding further we maycaution that undoubtedly such powers are not to beexercised in routine manner to extend limitation provided bythe Act for various stages. We are conscious that suchroutine exercise of powers would neither be expedient nordesirable, since the entire machinery of tax calculation,processing of assessment and further recoveries or refunds,would get thrown out of gear, if such powers are routinelyexercised without considering its desirability andexpedience to do so for avoiding genuine hardship. In thepresent case, however, considering special facts, we are ofthe opinion that the Commissioner ought to have exercisedsuch powers. It is true that the Appellate Commissionerrecorded that the petitioner did not remain present in theappellate proceedings. However that by itself would nottake away the petitioner's case for genuine hardship norcontrary to what is vehemently contended before us by thecounsel for the Revenue, convince us to hold that filing ofrevised return beyond limitation lacked bona fides.” (iii)In the case of State of Jharkhand and others vs. AmbayCements and another, (2005 Sales Tax Cases Vol.129). Therelevant extract of the said judgment is quoted from the HeadNote below for ready reference : “An exception or an exempting provision in a taxing statuteshould be construed strictly. If the condition under which an exemption is granted stands changed on account of anysubsequent event the exemption would not operate. (seeparas 23 and 24) Whenever the statute prescribes that a particular act is to bedone in a particular manner and also lays down that failureto comply with the said requirement leads to severeconsequences, such requirement would be mandatory. If thestatute provide that a particular thing should be done, itshould be done in the manner prescribed and not in anyother way (see para 26).” (iv)In the case of B.M.Malani vs. Commissioner of Income Taxand another, (2008) 219 CTR 313), the Court observed : “8. The term 'genuine' as per the New Collins ConciseEnglish Dictionary is defined as under : “'Genuine' means not fake or counterfeit, real, notpretending (not bogus or merely a ruse).” Whenever the statute prescribes that a particular act is to bedone in a particular manner and also lays down that failureto comply with the said requirement leads to severeconsequences, such requirement would be mandatory. If thestatute provide that a particular thing should be done, itshould be done in the manner prescribed and not in anyother way (see para 26).” (iv)In the case of B.M.Malani vs. Commissioner of Income Taxand another, (2008) 219 CTR 313), the Court observed : “8. The term 'genuine' as per the New Collins ConciseEnglish Dictionary is defined as under : “'Genuine' means not fake or counterfeit, real, notpretending (not bogus or merely a ruse).” For interpretation of the aforementioned provision, theprinciple of purposive construction should be resorted to.Levy of interest although is statutory in nature, inter alia forrecompensating the Revenue from loss suffered bynon-deposit of tax by the assessee within the time specifiedtherefor. The said principle should also be applied for thepurpose of determining as to whether any hardship had been caused or not. A genuine hardship would, inter alia,mean a genuine difficulty. That per se would not lead to aconclusion that a person having large assets would never bein difficulty as he can sell those assets and pay the amountof interest levied. The ingredients of genuine hardship must be determinedkeeping in view the dictionary meaning thereof and the legalconspectus attending thereto. For the said purpose, anotherwell-known principle, namely, a person cannot takeadvantage of his own wrong, may also have to be borne inmind. The said principle, it is conceded, has not beenapplied by the Courts below in this case, but we may takenote of a few precedents operating in the field to highlightthe aforementioned proposition of law. (See PriyankaOverseas (P) Ltd. & Anr. Vs. Union of India & Ors.1991Suppl.(1)SCC 102, para 39, Union of India & Ors. Vs.Maj.Gen.(Retd.) Madan Lal Yadav (1996)4 SCC 127 at 142,paras 28 and 29, Ashok Kapil Vs. Sana Ullah (dead) & Ors.(1996) 6 SCC 342 at 345, para 7, Sushil Kumar vs. RakeshKumar (2003) 8 SCC 673 at 692, para 65, first sentence,Kusheshwar Prasad Singh vs. State of Bihar & Ors. (2007)11 SCC 447, paras 13, 14 and 16).” 28.Section 119 of the Act is couched in very wide terms. Thesame is quoted below for ready reference : Instructions to subordinate authorities: “119. (1) the Board may, from time to time, issue such orders, instructions and directions to other income- taxauthorities as it may deem fit for the proper administrationof this Act, and such authorities and all other personsemployed in the execution of this Act shall observe andfollow such orders, instructions and directions of the Board: xxx xxx xxx (2) Without prejudice to the generality of the foregoingpower:- (a) xxx xxx xxx (b) the Board may, if it considers it desirable or expedient soto do for avoiding genuine hardship in any case or class ofcases, by general or special order, authorize any income-taxauthority, not being a Commissioner (Appeals) to admit anapplication or claim for any exemption, deduction, refund orany other relief under this Act after the expiry of the periodspecified by or under this Act for making such application orclaim and deal with the same on merits in accordance withlaw:” 29.We may also refer to a decision of the Karnataka HighCourt in the case of Dr. (Smt.) Sujatha Ramesh vs. CentralBoard of Direct Taxes, New Delhi, (2017)87 taxmann.com 228(Karnataka), wherein the Court has observed as under : “12. It is true that the so called reasons assigned by therespondent Central Board of Direct Taxes (CBDT) in theimpugned order, on the face of it, do not appear to bewhimsical or arbitrary reasons and it is equally true that 29.We may also refer to a decision of the Karnataka HighCourt in the case of Dr. (Smt.) Sujatha Ramesh vs. CentralBoard of Direct Taxes, New Delhi, (2017)87 taxmann.com 228(Karnataka), wherein the Court has observed as under : “12. It is true that the so called reasons assigned by therespondent Central Board of Direct Taxes (CBDT) in theimpugned order, on the face of it, do not appear to bewhimsical or arbitrary reasons and it is equally true that such investment could be made by assessee very wellbefore the cut off date also when she was physicallypresent in India or even when she had gone back to USA on20th February 2013. Nonetheless, the delay of six months inthe circumstances in which it occurred, especially, in view ofthe fact that the investment condition was undisputably metby the assessee could have been condoned taking ajudicious and holistic view of the facts. The wide powers ofthe Central Board of Direct Taxes or other higher authoritiesof the Department to whom such powers can be delegatedunder Section 119 of the Act, need not always take only apro revenue approach in such matters. Their approach insuch cases should be equitious, balancing and judiciouswhich should reflect the application of mind to the facts ofthe case and before denying the genuine claim of theassessee on the grounds of mere delay in making suchclaim, something more than the user of innocuous terms asemployed in the present case, should be forthcoming.Technically, strictly and literally speaking, the Board mightbe justified in denying the exemption from capital gains taxby rejecting such condonation application, but an assessee,who substantially satisfies the condition for availing suchexemption should not be denied the same, merely on the barof limitation, especially, when the legislature has conferredwide discretionary powers to condone such delay on thehighest executive authority of the Central Board of DirectTaxes under the Act. 13. The general and wide powers given to the Board in thisregard, “if it considers it desirable or expedient so to do for avoiding genuine hardship in any case.....”, not only giveswide powers to the Board, but confers upon it a obligation toconsider facts relevant for condonation of delay as well asthe merit of the claim simultaneously. If the claim ofexemption or other claim on merits is eminently a fit case formaking such claim, it should not normally be defeated onthe bar of limitation, particularly, when the delay or the timeperiod for which condonation is sought is not abnormallylarge. It will of course depend upon the facts of the eachcase, where such a time period or the merit of the claimdeserves such exercise of discretion in favour of theassessee under Section 119(2)(b) of the Act or not andtherefore, no straight jacket formula or guidelines can belaid down in this regard. However, such orders passed bythe Central Board of Direct Taxes being a quasi-judicialorder is always open to judicial review by the higherconstitutional courts. If the good conscience of the Courts ispricked, even though such orders rejecting the claims on thebar of limitation may appear to be prima facie tenable, theCourts may exercise their jurisdiction to set aside suchorders and allow the claims on merits, setting aside the barof limitation. 14. The present case is one of such nature, where the Courtfinds that the substantial conditions for claiming theexemption from capital gain tax stood satisfied and theprescribed investment was made by the assessee in theBonds of the National Highways Authority, for the minimumlock-in period of three years also is an undisputed fact, andtherefore, the delay in making such investment of six 14. The present case is one of such nature, where the Courtfinds that the substantial conditions for claiming theexemption from capital gain tax stood satisfied and theprescribed investment was made by the assessee in theBonds of the National Highways Authority, for the minimumlock-in peri