Wp(C)/32420/2017 Of Daisy v. Principal Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAMPRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH MONDAY, THE 24 DAY OF JULY 2023 / 2ND SRAVANA, 1945 WP(C) NO. 32420 OF 2017 PETITIONER: DAISYAGED 55 YEARS AGED 55 YEARS, ANIZHAM HOUSE, KURUVITHOTTAM, KOTTUKAL, THIRUVANANTHAPURAM. BY ADV S.KRISHNAMOORTHY RESPONDENTS: 1PRINCIPAL COMMISSIONER OF INCOME TAX OFFICE OF THE COMMISSIONER OF INCOME TAX, AYYAKHAR, KAWDIAR, THIRUVANANTHAPURAM-695103. 2 ASSISTANT COMMISSIONER OF INCOME TAX OFFICE OF THE COMMISSIONER OF INCOME TAX,AYYAKHAR, KAWDIAR, THIRUVANANTHAPURAM-695103. BY ADVS. SRI.CHRISTOPHER ABRAHAM, INCOME TAX DEPARTMENTSRI.K.M.V.PANDALAI INCOME TAX DEPARTMENT THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 24.07.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT Dated this the 24[th] day of July, 2023 1.Heard Sri.S.Krishnamoorthy, learned counsel for the petitioner and Sri.ChristopherAbraham, learned Standing Counsel for theIncome Tax Department. 2.This writ petition has been filed underArticle 226 of the Constitution of India impugningthe order dated 26.05.2017 passed under Section119(2)(b) of the Income Tax Act, 1961(hereinafter referred to as ‘IT Act’) by the Commissionerof Income Tax, Thiruvananthapuram, wherebythe application filed by the petitioner underSection 119(2)(b) of the IT Act has been rejected 3.The petitioner filed return of the incomefor the assessment year 2012-13 on 19.08.2015,showing ‘nil’ total income. The due date for filingthe return was 31.07.2012. When the return was filed beyond the prescribed time limit, the samewas processed under Section 139 of the IT Act. 4.Circular No.9/2015 dated 09.06.2015prescribes the conditions for condonation ofdelay in processing the claim for refund by anassessee. The said circular has been placed onrecord with the writ petition as Ext.P10. Thepowers of acceptance or rejection of theapplications within the monetary limits, had beendelegated to the Principal Chief Commissioner ofIncome Tax. However, such power has to beexercised on following two conditions; i. At the time of considering the case under Section 119(2)(b), it shall be ensured that theincome/loss declared and/or refund claimed iscorrect and genuine and also that the case is ofgenuine hardship on merits; ii.ThePr.CCIT/CCIT/Pr.CIT/CITareempowered to direct the jurisdictional assessing officer to make necessary inquiries or scrutinizethe case in accordance with the provisions of theAct to ascertain the correctness of the claim.the case in accordance with the provisions of theAct to ascertain the correctness of the claim. 5.The aforesaid circular further provides that a belated application for supplementaryclaim of refund can be admitted for condonationprovided other conditions as referred to above,are to be fulfilled. Those conditions are;claim of refund can be admitted for condonationprovided other conditions as referred to above,are to be fulfilled. Those conditions are; (i) The income of the assessee is not assessable inthe hands of any other person under anyof the provisionsof the Act;of the Act; (ii) No interest will be admissible on belated claim ofrefunds; (iii) The refund has arisen as a result of excess taxdeducted collected at source and/or excess advance taxpayment and/or excess payment of self-assessment tax asper the provisions of the Act. 6.Learned counsel for the petitionersubmits that the Commissioner of Income Taxinstead of considering the application of theinstead of considering the application of the (i) The income of the assessee is not assessable inthe hands of any other person under anyof the provisionsof the Act;of the Act; (ii) No interest will be admissible on belated claim ofrefunds; (iii) The refund has arisen as a result of excess taxdeducted collected at source and/or excess advance taxpayment and/or excess payment of self-assessment tax asper the provisions of the Act. 6.Learned counsel for the petitionersubmits that the Commissioner of Income Taxinstead of considering the application of theinstead of considering the application of the petitioner for condonation of delay on merit hasconsidered the whole case on merit, and rejectedthe claim without condoning the delay. He,therefore, submits that this approach of theCommissioner of Income Tax rejecting the claimof the petitioner without touching on the merit ofthe application for condonation of delay, isincorrect and not as per the provisions of the Actor the circular mentioned above. He furthersubmits that in view thereof, the writ petitionmay be allowed and the matter may be remittedto the Commissioner of IT or deciding theapplication for condonation of delay a fresh. 7.In support of his contention, learnedcounsel for the petitioner has relied on thejudgment of this Court passed in the case ofPala Marketing Co-operative Society Ltd.v.Union of India and others [2008(1) KHC637]. 8.On the other hand, learned counsel forthe Revenue Department has submitted thatwithout considering the merit of the claim, theapplication for condonation of delay regardinghardship cannot be considered. The authority hasto record to the satisfaction for accepting orrejecting the claim of the assessee should begenuine. When the authority finds the claim ofthe assessee is not genuine and bonafide, thenthere is no question of condoning the delay. Hehas further submitted that the circular relied onby the learned counsel for the petitionerie.,9/2015, itself provides that, while consideringthe application under Section 119(2)(b) of the ITAct, the authority is required to consider theclaim of the assessee on merit, and also the claimfor condonation of delay. If the claim of theassessee is not found genuine on merit, thenthere is no question of condonation of delay in WPC No.32420 of 2017 filing the claim/refund. The submission of thelearned counsel for the revenue is that theCommissioner of Income Tax has not found theclaim of the petitioner or assessee just andproper, and, therefore, there was no question ofallowing the application of the petitioner or theassessee for condoning the delay in filing theapplication for refund. 9.I have considered the submissions of thelearned counsel for the petitioner. It is not indispute that the circular issued by the CBDT arebinding on the Income Tax authorities. Paragraph5 of circular No.9/2015 mentioned abovespecifically provides that the authority isrequired to show that the income/loss declaredand/or refund claimed is correct and genuine andalso that the case is of genuine hardship onmerits. Therefore, the Income Tax authoritywhich is empowered to condone the delay in 9.I have considered the submissions of thelearned counsel for the petitioner. It is not indispute that the circular issued by the CBDT arebinding on the Income Tax authorities. Paragraph5 of circular No.9/2015 mentioned abovespecifically provides that the authority isrequired to show that the income/loss declaredand/or refund claimed is correct and genuine andalso that the case is of genuine hardship onmerits. Therefore, the Income Tax authoritywhich is empowered to condone the delay in filing the application for refund is to ensure itselfthat the claim of the assessee is genuine andbonafide. Therefore, I find not much substance inthe submission of learned counsel for thepetitioner that the commissioner was notrequired to enter into the merit of the claim ofthe petitioner and he should have confinedhimself to the genuine hardship of the petitionerwhile considering the application for condoningthe delay in filing the application. So far as thejudgment in the case of Pala Marketing Co-operative Society(supra) is concerned,nowhere it is said that while considering theapplication for condonation of delay, the authorityis not required to consider the merit of the claim.Paragraph 4 of the said judgment, which hasbeen relied on by the learned counsel for thepetitioner on re production reads as under: “4. So far as the merits of the assessee's claimfor condonation of delay is concerned, I find the assessee is bound to get it's accounts auditedunder S.64 of the Cooperative Societies Act. Thedelay in audit by the auditor appointed under theAct is not attributable to the assessee. Eventhough Standing Counsel submitted that assesseewas free to get the accounts audited by anyaccountant defined under the Act, I do not thinkthis contention can be accepted because auditcovered by other statues are recognised undersecond proviso to S.44A(b) of the Income Tax Act.Until 2001 audited accounts and report in theprescribed form could be filed through thestatutory audit. However, only from 01/04/2001report from auditor is required and even thereafterthe audit report prepared by auditor appointedunder the special statute could be submitted.Besides showing sufficient cause for delay in filingthe return for refund, assessee has alsoestablished his case of genuine hardship in asmuch as it has suffered losses in the fivesucceeding years. The genuine hardshipcontemplated under S.119(2)(b) obviously isfinancial hardship caused to the assessee if delayis not condoned. If delay in this case is notcondoned, the cooperative society will be deprivedof Rs. 10 lakhs and odd which it was otherwise notliable to pay by virtue of the exemption claimedunder S.80P of the Income Tax Act. In thecircumstances, I quash Ext. P9 declaring AP petitioner's entitlement for condonation of delayunder S.119(2)(b) of the Act and consequentlydirect the 4[th] respondent to process petitioner'sclaim for refund under S.237 and grant refund tothe extent found eligible within a period of threemonths from the date of production of copy of thisjudgment by the petitioner.” 10.Even otherwise when the circular itselfprovides that the claim of the assessee has to beconsidered and the authority is required to reachto the satisfaction as to the genuineness of theclaim, then only the question of condoning thedelay in filing the refund application arises.Therefore, I find no substance in this writpetition, which is hereby rejected. 11.The writ petition is dismissed as above. Sd/- DINESH KUMAR SINGH JUDGE PETITIONER EXHIBITS 10.Even otherwise when the circular itselfprovides that the claim of the assessee has to beconsidered and the authority is required to reachto the satisfaction as to the genuineness of theclaim, then only the question of condoning thedelay in filing the refund application arises.Therefore, I find no substance in this writpetition, which is hereby rejected. 11.The writ petition is dismissed as above. Sd/- DINESH KUMAR SINGH JUDGE PETITIONER EXHIBITS EXHIBIT P1COPY OF THE PARTITION DEED NUMBER 1019/88.EXHIBIT P2COPY OF INTIMATION UNDER SECTION 12(2) OF THE LAND ACQUISITION ACT.EXHIBIT P3COPY OF LETTER ISSUED BY THE INCOME TAX AUTHORITIES DATED 8-2-2006.EXHIBIT P4COPY OF THE ASSESSMENT UNDER SECTION 143(1)OF THE INCOME TAX ACT.EXHIBIT P5COPY OF THE COMMUNICATION ISSUED BY TASILDAR DATED 30-5-2011.EXHIBIT P6COPY OF THE ORDER DATED 26-5-2017.EXHIBIT P7COPY OF CERTIFICATE ISSUED BY THE VILLAGE OFFICER VIZHINJAM DATED 17-12-2016.EXHIBIT P8COPY OF CERTIFICATE ISSUED BY THE VILLAGE OFFICER VIZHINJAM DATED 1-03-2017.EXHIBIT P9COPY OF CERTIFICATE ISSUED BY THE VILLAGE OFFICER VIZHINJAM DATED 4-05-2017.EXHIBIT P10COPY OF THE CIRCULAR NUMBER 9/2015 (F.NO.312/22/2015-0T) DATED 9-6-2016.True English Translation of Ext True English Translation of Ext P7P7True English Translation of Ext True English Translation of Ext P8P8True English Translation of Ext True English Translation of Ext P9 P9