Thedavoor Pacb Limited v. Chief Commissioner Of Income Tax,Coimbatore

W.P.No.9448 of 2024 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 19.10.2024 CORAM THE HON'BLE Mr. JUSTICE KRISHNAN RAMASAMY W.P.No.9448 of 2024 andW.M.P.No.10444 of 2024 2635 Thedavoor PACB Limited,Represented by its Secretary, Mr.N.Muthaiyan,Thedavoor Post, Gangavalli Taluk,Salem 636 116 Vs. ... Petitioner Chief Commissioner of Income Tax,Coimbatore, No.63, Race Course Road,Coimbatore 641 018. ... Respondent Prayer: Writ Petition filed under Article 226 of the Constitution of India praying to issue a Writ of Certiorarified Mandamus, to call for the records in the file of the respondent and quash the impugned order passed by the respondent under Section 119(2)(b) of the Income Tax Act, 1961 (hereinafter referred to as “Act”) in DIN and order No.ITBA/COM/F/17/2023-24/1058536606(1) dated 07.12.2023 for the assessment year 2018-19 in PAN- and direct the 1/15 respondent to condone the delay in filing return of income under Section 139(1) of the Act. For Petitioner : Ms.N.V.LakshmiFor Respondents: Dr.B.Ramaswamy, Senior Standing counsel ORDER This writ petition has been filed challenging the impugned order dated 07.12.2023 passed by the respondent, whereby, they had rejected the application filed by the petitioner for condoning the delay of 546 days in filing their Income Tax Returns (ITR). 2. The learned counsel for the petitioner would submit that the petitioner is a Co-operative Society. As per the provisions of Section 139(1) of the Income Tax Act, 1961 (hereinafter called as “IT Act”), they were supposed to file their ITR, for the assessment year 2018-19, on or before 31.10.2018. Though the date of completion of Audit was on 20.06.2018 and the same was received by the petitioner 31.07.2018, they had filed their ITR only on 29.04.2021 with a delay of 546 days, due to 2/15 W.P.No.9448 of 2024 which, the petitioner was unable to claim the deductions, exemptions, etc., available to them under the provisions of Section 80P of the IT Act. 3. Further, he would submit that prior to the assessment year 2018-19, there was no obligation for the petitioner to file their ITR under Section 139(1) of the IT Act for the purpose of claiming the deductions available to them under Section 80P of the IT Act. Hence, the petitioner had not filed their returns prior to the subject assessment year. Under these circumstances, an amendment in the provisions of Section 80AC of the IT Act came into force with effect from 01.04.2018. Being unaware of the said amendment, the petitioner had failed to file their ITR within the prescribed time limit. The said aspect was explained by the petitioner in their application, which was filed under Section 119(2)(b) of the IT Act, to condone the delay in filing the ITR. However, the said application was rejected by the respondent, vide the impugned order, citing the reason that the petitioner has not provided sufficient reasons to justify their genuine hardships. 4. He would also contend that while rejecting the condone delay 3/15 W.P.No.9448 of 2024 application, the reason assigned by the petitioner was not at all considered by the respondent in a proper perspective, due to which, the petitioner, being co-operative society, is facing irreparable hardships. Hence, he requests this Court to pass appropriate orders to set aside the impugned order and condone the delay in filing the ITR, so as to enable the petitioner to claim their deductions available under the provisions of the IT Act. 4. He would also contend that while rejecting the condone delay 3/15 W.P.No.9448 of 2024 application, the reason assigned by the petitioner was not at all considered by the respondent in a proper perspective, due to which, the petitioner, being co-operative society, is facing irreparable hardships. Hence, he requests this Court to pass appropriate orders to set aside the impugned order and condone the delay in filing the ITR, so as to enable the petitioner to claim their deductions available under the provisions of the IT Act. 5. Per contra, Dr.B.Ramaswamy, learned Senior Standing counsel, appearing for the respondent had strongly opposed for condonation of delay in filing the ITR and would submit that while passing the impugned order, the respondent had very well considered the request made by the petitioner and since the respondent did not find any genuine hardship faced by the petitioner in filing their ITR, the condone delay application was rejected by the respondent vide impugned order dated 07.12.2023. 6. Further, he would submit that the due date for filing the ITR, for the assessment year 2018-19, was on or before 31.10.2018. When such 4/15 W.P.No.9448 of 2024 being the case, though the audit was completed and the audit report was signed as early as on 26.06.2018, the ITR was not filed by the petitioner within time as prescribed under Section 139(1) of the IT Act, which is nothing but deliberate omission on the part of the petitioner. 7. That apart, he would submit that if the request made by the petitioner is considered and entertained by this Court, it will open the flood gates and it will pave way for Assessees to approach this Court to condone the delay in filing the ITR by providing some reasons or other and claim for deduction, which would set a bad precedent and also the provisions of Section 80AC of the IT Act will become redundant. Therefore, he requests this Court to dismiss the present petition with costs. 8. I have given due consideration to the submissions made by the learned counsel for the petitioner and the learned Senior Standing counsel for the respondent and also perused the materials available on 5/15 records. 9. In the case on hand, the challenge is against the rejection of application filed by the petitioner under Section 119(2)(b) of the IT Act, to condone the delay of 546 days in filing their ITR. 10. The petitioner, being a Co-operative Society, the income received by them are exempted under Section 80P of the IT Act, provided that they are supposed to file their ITR on or before the due date as prescribed under Section 139(1) of the IT Act. In terms of Section 80AC of the IT Act, if an Assessee failed to file their ITR on or before the due date, they will not be entitled to get any deductions. In the present case, it is an admitted fact that the ITR was not filed by the petitioner within the time limit, due to which, they were unable to claim their deductions under Section 80P of the IT Act. Under these circumstances, the petitioner had filed an application, under Section 119(2)(b) of the IT Act, before the respondent only with an intention to avail the ultimate benefits, which are available to them under Section 80P of the IT Act. 6/15 11. The subject matter of this case is pertaining to the assessment year 2018-19. As per the provisions of Section 139(1) of the IT Act, the due date for filing ITR for the said assessment year was on 31.10.2018. At this juncture, it would be apposite to extract the provisions of said Section 139(1) of the IT Act, which reads as follows: 139.- Return of Income.-(1)Every person,— (a)being a company or a firm; or (b)being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, 6/15 11. The subject matter of this case is pertaining to the assessment year 2018-19. As per the provisions of Section 139(1) of the IT Act, the due date for filing ITR for the said assessment year was on 31.10.2018. At this juncture, it would be apposite to extract the provisions of said Section 139(1) of the IT Act, which reads as follows: 139.- Return of Income.-(1)Every person,— (a)being a company or a firm; or (b)being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the prescribe form and verified in the prescribed manner and setting forth such other particulars as may be prescribed” 12. A reading of the above provision would make it clear that every person, if their total income or the total income of any other person, in respect of which he is assessable under this Act, exceeded the maximum amount, which is not chargeable to income tax, shall file their ITR on or before the due date. 7/15 W.P.No.9448 of 2024 13. In the case on hand, it is mandatory for the petitioner to file their ITR on or before the due date, i.e., 31.10.2018. Accordingly, the audit was completed as early as on 20.06.2018, i.e., nearly 4 months prior to the due date. However, the ITR was filed by the petitioner only on 29.04.2021 with an exorbitant delay of 546 days. 14. The main reason assigned by the petitioner for the aforesaid delay in filing the ITR was that prior to the subject assessment year, there was no obligation for the petitioner to file their ITR for the purpose of claiming the deductions available to them under the provisions of Section 80P of the IT Act. During the Assessment year 2018-19, an amendment was made by the Government with an objective of bringing uniformity in all income-based deductions, whereby it was proposed that the scope of section 80AC be extended to all similar deductions which are covered under the heading “C—Deductions in respect of certain incomes” under Chapter VIA i.e from Sections 80IA to 80RRB. The provisions of Section 80AC of the IT Act, which was introduced with effect from 01.04.2018, states as follows: 8/15 “80AC.-Deduction not to be allowed unless return furnished. - Where in computing the total income of an assessee of any previous year relevant to the assessment year commencing on or after - (i)the 1st day of April, 2006 but before the 1st day of April, 2018, any deduction is admissible under section 80-IA or section 80-IAB or section 80-IB or section 80-IC or section 80-ID or section 80-IE; (ii)the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C.-Deductions in respect of certain incomes",no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.” 15. A reading of the above provision would make it clear that no deduction under the heading "C.-Deductions in respect of certain incomes" shall be allowed, unless the Assessee furnishes their ITR for the relevant assessment year on or before the due date as specified under Section 139(1) of the IT Act. 16. Therefore, if a person fails to furnish the ITR within the time 9/15 (ii)the 1st day of April, 2018, any deduction is admissible under any provision of this Chapter under the heading "C.-Deductions in respect of certain incomes",no such deduction shall be allowed to him unless he furnishes a return of his income for such assessment year on or before the due date specified under sub-section (1) of section 139.” 15. A reading of the above provision would make it clear that no deduction under the heading "C.-Deductions in respect of certain incomes" shall be allowed, unless the Assessee furnishes their ITR for the relevant assessment year on or before the due date as specified under Section 139(1) of the IT Act. 16. Therefore, if a person fails to furnish the ITR within the time 9/15 W.P.No.9448 of 2024limit as prescribed under Section 139(1) of the IT Act, he will not be entitled to avail any deductions or exemptions available to him under the heading "C.-Deductions in respect of certain incomes". Under these circumstances, the concerned Assessee shall file the condone delay application under Section 119(2)(b) of the IT Act, by providing sufficient reasons for the delay and explaining the genuine hardships faced by him in filing the ITR within the prescribed time limit. Thereafter, the said application will be considered and entertained by the respondent-Department on its own merits and in accordance with law. 17. However, in the case on hand, the petitioner had filed their ITR belatedly on 29.01.2021, i.e., with a delay of 546 days. The reason assigned by the petitioner was that since they were unaware of the aforesaid amendment, they were under the impression that there was no obligation for them to file their ITR. In such case, this Court is of the view that the said reason is not acceptable for condonning such an exorbitant delay of 546 days in filing the ITR of the petitioner, who is a 10/15 Co-operative Society. 18. In view of the above, by condoning the delay of 546 days, this Court will, either wittingly or unwittingly, be a party to all the acts of omission/misdeeds committed by the petitioner. Since the issue is pertaining to the revenue matters, the present condone delay petition cannot be compared at par with the other applications filed for condoning the delay in filing, representation, etc. If the delay is condoned and the present petition is entertained in the absence of genuine hardships, it would amount to further encourage the misdeeds of the petitioner. In such case, this Court is not inclined to entertain this petition. 19. That apart, as contended by the learned Senior Standing counsel appearing for the respondent, even assuming if there is any merit in the case on hand, so as to consider the request made by the petitioner, it would set a bad precedent and in future, the Assesees will approach this Court to condone the delay in filing the ITR by referring the present case as a precedent, which would ultimately defeat the object of Section 80AC of the IT Act and makes the said provision as redundant. However, 11/15 W.P.No.9448 of 2024 there is no merits in this case even to consider on such request. 19. That apart, as contended by the learned Senior Standing counsel appearing for the respondent, even assuming if there is any merit in the case on hand, so as to consider the request made by the petitioner, it would set a bad precedent and in future, the Assesees will approach this Court to condone the delay in filing the ITR by referring the present case as a precedent, which would ultimately defeat the object of Section 80AC of the IT Act and makes the said provision as redundant. However, 11/15 W.P.No.9448 of 2024 there is no merits in this case even to consider on such request. 20. It is pertinent to mention here that as per the provisions of Section 234F of the IT Act, even after the expiry of due date, an Assessee can file its ITR upon payment of penalty as stated therein. In this case, after making the payment of penalty as provided under Section 234F of the IT Act, the petitioner had already filed their ITR and thereafter, they had filed an application before the respondent to condone the delay in filing their ITR. When such being the case, the aforesaid application is not maintainable since the ITR was already filed by the petitioner and the same was taken on record, in which case, the issue of condone delay in filing the ITR would not arise. The application was filed before the respondent, under the pretext of condoning the delay in filing the ITR, to get the benefits, viz., deductions, available under Section 80P of the IT Act. In the event if the petitioner intend to file an application to claim the deductions under Section 80P of the IT Act, they should have moved such application and prayed accordingly. 21. Even assuming that the application, which was filed under 12/15 W.P.No.9448 of 2024 Section 119(2)(b) of the IT Act, is maintainable, as discussed above, the reason assigned by the petitioner had not at all justified any genuine hardships faced by them in filing their ITR within prescribed time limit. Taking into consideration of all these aspects, the respondent had rightly rejected the application filed by the petitioner vide the impugned order dated 07.12.2023. Hence, the said impugned order dated 07.12.2023 warrants no interference of this Court. In such view of the matter, the present writ petition is liable to be dismissed. 22. In the result, this writ petition is dismissed. No cost. Consequently, the connected miscellaneous petition is also closed. 19.10.2024Speaking/Non-speaking orderIndex : Yes / NoNeutral Citation : Yes / Nonsa To13/15 The Chief Commissioner of Income Tax,Coimbatore,Coimbatore, No.63, Race Course Road,Coimbatore 641 018Coimbatore 641 018 14/15 W.P.No.9448 of 2024 15/15 https://www.mhc.tn.gov.in/judis KRISHNAN RAMASAMY.J., nsa W.P.No.9448 of 2024and W.M.P.No.10444 of 2024 19.10.2024