Vasantrao Bhimrao Jadhav v. The Commissioner Of Income Tax-1 Thane And Ors

hvn IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L) NO. 572 OF 2012 Vasantrao Bhimrao Jadhav ...Petitioner Versus The Commissioner of Income Tax-1 Thane and Ors. ...Respondents Mr. Mandar Vaidya for the petitioner. Mr.Suresh Kumar for respondents. CORAM : DR. D.Y.CHANDRUCHUD &R.D. DHANUKA,JJ.DATED : MAY 07, 2012 P.C. Rule; with the consent of counsel for the parties made returnable forthwith. With the consent of counsel and at their request, the petition is taken up for hearing and final disposal. 2. The petitioner worked as a Mazdoor with the Reserve Bank of India and opted for voluntary retirement under a scheme called "the Optional Early Retirement Scheme" (OERS) introduced by the bank. The Petitioner retired from service. The Reserve Bank of India while effecting payment of the terminal dues of Rs.7,19,547/- deducted tax at 2/4WPL No. 572 of 2012 source. The issue as regards the eligibility of OERS payments for exemption under section 10(10C) of the Income Tax Act, 1961, read with Rule 2BA of the Rules was settled in a judgment of the Division Bench of this Court in Commissioner of Income Tax Versus Koodathil Kallyatan Ambujakshan [1]. The judgment of this Court was confirmed by the Supreme Court. The petitioner filed his return of income on 23 March, 2010 and after claiming an exemption under section 10(10C) sought a refund of Rs.1,66,068/-. The Petitioner filed an application for condonation of delay. The Commissioner of Income Tax - 1, Thane dismissed the application by his order dated 6 July, 2011. Thereafter the application for rectification has also been dismissed. 3.The learned counsel appearing on behalf of the petitioner submits that the issue as regards eligibility of OERS payments was in dispute and was settled only by the judgment of this Court which was thereafter confirmed by the Supreme Court. Consequently, it has been submitted that there was no reason to decline the application for condonation of delay. The learned counsel submits that under Instruction No. 13 of 2006 dated 22 December, 2006, issued by CBDT the delay in filing a return can be condoned. As a matter of fact, the Commissioners at Mumbai and at Pune had in similar cases involving employees of the Reserve Bank of India condoned the delay in filing the returns. 4. On the other hand, the learned counsel appearing on behalf of the Revenue supported the order passed by the Commissioner. 5.Section 119(2)(b) empowers the Central Board of Direct Taxes by general or special order to authorize any Income Tax Authority to admit an application or claim for any exemption, deduction or refund or other relief under this Act after the period specified by or under the Act for making such application or claim and deal with the same on merits in accordance with the law in order to avoid genuine hardship in any case or class of cases. The instruction confers powers upon the Commissioner of Income Tax to condone the delay in filing a return involving a refund claim of upto Rs.10 lacs. Para 6 of the instruction states that while considering a case under the provisions of section 119(2)(b) it should be ensured that the income declared and the refund claimed are correct and genuine and also that the case is of genuine hardship on merits. In the present case, the learned counsel for the petitioner has placed on record copies of orders dated 1 December, 2010 and 22 February, 2012 evidencing that in similar cases, the delay was WPL No. 572 of 2012 WPL No. 572 of 2012 condoned by the Commissioners at Mumbai and Pune namely Commissioner of Income Tax - 26, Mumbai and Commissioner of Income Tax - IV Pune. Even otherwise, we are of the view that the impugned order takes a rather technical view of the matter. The petitioner was a mazdoor who was in the employment of the Reserve Bank of India and the issue as to whether OERS payments would be eligible for exemption under section 10(10C) was settled only by the judgment of this Court which was confirmed in appeal by the Supreme Court. In that view of the matter, the delay on the part of the petitioner ought to have been condoned, since a case of genuine hardship was made out by the petitioner. We accordingly set aside the impugned order dated 6 July, 2011 passed by the Commissioner of Income Tax - I, Thane and direct in consequence that the delay in filing the return of income tax by the petitioner for Assessment Year 2004-2005 shall stand condoned. The Return shall now be processed in accordance with law. Rule is made absolute in the aforesaid terms. No order as to costs. DR.D.Y. CHANDRACHUD,J. R.D. DHANUKA,J.