Wp/15891/2016 Of Smt. Dr. Sudha Krishnaswamy v. Chief Commissioner Of Income Tax

IN THR HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27 DAY OF MARCH, 2018 BEFORE: THRE HON’BLE MRS. JUSTICK S.SUJATHA WRIT PETITION Nos.15891;15893/2016 (TIT) BETWEEN: SMT Dr. SUDHA KRISHNASWAMYW/O Dr. KRISHNASWAMY|AGED ABOUT 5O YEARS| R/AT No.385, TROY DEL WAYWILLIAMSVILLE, NEW YORK 14221UNITED STATES OF AMBRICA. _.. PETITIONER| IBY SRI BALRAM R. RAO, ADV.| AND: 1.CHIEBEK COMMISSIONER OF INCOME TA(INTL. TAXN), SOUTH ZONE, BANGALORECENTRAL REVENUE BUILDING, QUEEN’S ROADBANGALORE-560001, KARNATAKA.(INTL. TAXN), SOUTH ZONE, BANGALORECENTRAL REVENUE BUILDING, QUEEN’S ROADBANGALORE-560001, KARNATAKA. oD COMMISSIONBR OF INCOMB TAXUINTL. TAXN), SOUTH ZONE BANGALOREINTERNATIONAL TAXATION, 6 KLOORR.P. BUILDING, NRUPATHUNGA ROADBANGALORE-560001, KARNATAKA.UINTL. TAXN), SOUTH ZONE BANGALOREINTERNATIONAL TAXATION, 6 KLOORR.P. BUILDING, NRUPATHUNGA ROADBANGALORE-560001, KARNATAKA. 3.)INCOME [TAX OFFICERWARD —- 1(2), INTERNATIONAL TAXATIONWARD —- 1(2), INTERNATIONAL TAXATION 0[‘T]FLOOR, R.P. BUILDING NRUPATHUNGA ROADBANGALORE-560001... RESPONDENTS.BANGALORE-560001... RESPONDENTS. IBY SRI K.V.ARAVIND, ADV.) -9.- THERESE WRIT PRTITIONS ARB FILED UNDER ARTICLE226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO.OQUASH THE ORDER DATED 08.10.2015 PASSED UNDERSECTION 119(2)(b) OF THE ACT FOR THE ASSESSMENT YEARS.2010-11, 2011-12 & 2012-13 IN ANNEXURE-G AND ETC. THERESK PERETITIONS COMING ON FOR PRELIMINHEARING IN ‘B’ GROUP, THIS DAY, THE COURT MADE THE|KFOLLOWING: ORDER Petitionerhaschallengedthe|order.dated08.10.2015 passed under Section 119(2)(b) of theIncome Tax Act, 1961 (‘Act’ for short) by the ChiefCommissioner of Income Tax (Intl. Taxn), South Zone,Bengaluru, relating to the Assessment years 2010-11,2011-12 and 2012-13, whereby the petition filed by thepetitioner for condonation of delay to submit the returnshave been rejected. 2 |TheASSCsscec,anon-resident, residing permanently at the United States of America has filed apetition for condonation of delay under Section 119(2)(b)of the Act before the Chief Commissioner of Income Tax| -3- — respondent No.1 herein. It was contended that theassessee sold one vacant site at Tumkur on 06.02.2012for consideration of Rs.52,06,000/- which resulted in anet capital gain of Rs.9o1,27,500/-. The assesseeinvestedRs.49,00,000/-_1NRECBond|claimingexemption under Section 54 EC of the Act. The assesseebeing non-resident, the purchaser of the property haddeducted income tax as per provisions of Section 1995 ofthe Act,which|hasresulted1n aarefund|oT Rs.10,85,730/- tor the assessment year 2012-13. As.regards assessment years 2010-11 and 2011-12, it wassubmitted that she had no taxable income and claimed|that the entire refund is relating to TDS from interestand bank deposits at HSBC. Accordingly, the asseesseerequested the respondent No.1 to condone the delay anddirect the assessing officer to accept the returns for theaforesaid 3 years and process the return of income onmerits and issue the refund orders. The respondentNo.1 called for the report from the CIT (IT) Bengaluru -4- -4- who in her report submitted that the authorizedrepresentatives of the assessee appeared before the CIT(IT) Bengaluru and submitted that the assessee was notin a position to file her returns file her RSOI on time dueto severe financial crisis 1n the United States of America|and the injuries sustained by her in an accident,enclosing a medical report in support of the claim.Considering the report, respondent No.1 held that themedical certificate dated 11.12.2013 would not supportthe case of the petitioner since she suffered injuriesowing to the accident occurred in December 2013 aswell as the age related problems i.e., mental agony,depression etc. It was observed that the assessee hadthe professional advisor available to her and therequired returns ought to have been filed within astipulatedperiodandaccordinglyrejectedthe|application relating to the three assessment years inquestion. Aggrieved by the same, these writ petitions arepreferred by the petitioner. -5- 3.|LearnedcounselSri.BalramRR.Rao,appearing for the petitioner, reiterating the groundsurged in the writ petitions would submit that therespondent No.1 failed to consider the satisfactoryexplanation offered by the petitioner for the delaycaused in filing the returns for the assessment years inquestion. Genuine hardship explained by the petitionerought to have considered by the authorities inpragmatic view rather than a pedantic approach. Theassessee is entitled to refund and the rejection of theapplication for condonation of delay had disentitled herto claim the refund which she is otherwise legallyentitled to. 4Learned counsel Sri.K.V.Aravind appearingfor the Revenue, justifying the impugned orders,submitted that the material on record discloses that thepetitioner was not serious in filing the returns withinthe stipulated period. The medical certificate does not supports the case of the petitioner to condone theinordinate delay of 1232 days in filing the returns.However, it is submitted that if this Court permits theAuthorities to consider the application filed by thepetitioner for condonation of delay and to scrutinize thereturns, a condition may be imposed to the petitioner toundertake before this Court that on such scrutiny, if theAuthorities come to a conclusion that the petitioner isliable to pay the tax and a demand has to be raised,then the petitioner shall ensure that no objections shallbe raised regarding limitation to raise the demand.Learned counsel has no objections to direct theAuthorities to scrutinize the returns with the aforesaid|observations. | 5 |I have given my anxious consideration to thearguments advanced by the learned counsel appearingfor the parties and perused the material on record. -~Tf- 6.|In terms of Section 119(2) (b) of the Act,CBDT is vested with the powers to admit an applicationor claim for any exemption, deduction, refund or anyother relief under the Act aiter the expiry of periodprescribed under the Act for making such application orclaim and appeal and to deal with the same on merits inaccordancewithlaw.InstructionNo.12/2003contemplates that the cases where delayed claims ofrefunds are being considered would be taken up forscrutiny. Similar instruction No.13/2006, interaliaprovides that no interest would be admissible on thebelated refund claims. The phrase “genuine hardship”WaS interpretedby theHon'bleApex.Court1nB.M.MALANI V/S. COMMISSIONER OF INCOME TAX,reported|1nN(2008) 10 SCC 617it was held that the genuinehardship means a genuine difficulty. The phrase“genuine hardship” employed under Section 119(2) (b) ofthe Act should be construed liberally, particularly inmatters oT|entertainingoT|applicationsseeking -8- -8- condonation of delay. The Bombay High Court in thecase ofBOMBAY MERCANTILE COOPERATIVE BANK LIMITEDV/S. CENTRAL BOARD OF DIRECT TAXES|reported inW.P.1544/2010 (D.D. 20.09.2010)Shas taken similarview. It is not the case of the petitioner that she isavoiding any scrutiny of the returns. On the other hand,it is the case of the petitioner that she is entitled forrefund, being a non-resident owing to the recession atU.S. and the accidental injuries suffered, no returnswere filed within the period prescribed. In thecircumstances, it cannot be held that the petitioner hasobtained any undue advantage of the delay in filing theincome tax returns. TS|It is trite law that rendering substantialjustice shall be paramount consideration of the Courts.as well as the Authorities rather than rejecting onhyper-technicalities. It may be true that there is somelapse on the part of the petitioner, that itself would not be a factor to turn out the plea for filing of the return,when the explanation offered was acceptable andsenuine hardship is established. Sufficient cause shownby the petitioner for condoning the delay is acceptableand the same cannot be rejected out-rightly ontechnicalities. 3.|Considering the overall circumstances, thedelay of 1232 days in filing the returns for the relevantassessment years in question is condoned subject todenial of interest for the delayed period if found to beentitled for refund. Respondent No.3 is permitted toscrutinize the returns in accordance with law subject tothe condition that petitioner gives an undertaking beforethis Court that she will not raise objections on theaspect of limitation in the event any demand has to bemade by the department rather than making refund, asclaimed, if found so, on concluding the assessments. /����/�� �C>;�C:A7�8<K9:@�=;<??�47�D9?7A�47D#�7�8;9=��#C�8�H98;9:� <�B7�9#A�#D�=9F�H77K=�D�#E�8#A<G��� 98;�8;7�<D#�7=<9A�#4=7�I<89#:=��H�98�B78989#:=�=8<:A� !"#$"% �$&�� ���� � ��� !"�#�