Wp(C) v. Union Of India And

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE A.K.JAYASANKARAN NAMBIAR THURSDAY, THE 24TH DAY OF SEPTEMBER 2020 / 2ND ASWINA, 1942 WP(C).No.13406 OF 2020(A) THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON24.09.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: JUDGMENT The petitioner, who is an assessee under the Income Tax Act, hadfiled Ext.P1 return for the assessment year 2014-2015 returning anamount of Rs. 2,06,160/- and claiming refund of an amount of Rs. 670/-.On processing the return submitted by him, the respondents refundedthe said amount to him. It would appear that a property owned by thepetitioner was acquired by the 2nd respondent and an amount ofRs.46,39,856/- was paid to the petitioner, after deducting an amount ofRs.9,28,642/- towards TDS. The 2nd respondent had deducted the tax atsource while making payment towards compensation to the petitioner inrespect of the land compulsorily acquired from him. The petitioner,therefore, revised his return for the assessment year 2014-2015 throughExt.P2 revised return filed on 11.05.2015. On coming to know that therevised return filed by him would not be considered by the respondents,the petitioner preferred an application under Section 119(2) of theIncome Tax Act for condonation of the delay in filing the revised return.The said application came to be rejected by Ext.P9 order of the PrincipalCommissioner of Income Tax dated 24.09.2019, inter alia, on the findingthat the petitioner had failed to furnish any document to support hisclaim that the Tahsildhar (LA) had filed the TDS return belatedly. ThePrincipal Commissioner also found that the petitioner had notestablished that he would face genuine financial hardship if the refund was not granted to him. It is apparent from Ext.P9 order that thePrincipal Commissioner was guided by the contents of Ext.P11 Circularthat was issued by the Central Board of Direct Taxes prescribingguidelines for the exercise of discretion under Section 119 (2) (b) of theIncome Tax Act. 2. A statement has been filed on behalf of the respondents,wherein the averments in the Writ Petition are refuted and the findingsof the Principal Commissioner of Income Tax in Ext.P9 order are soughtto be justified for the reasons contained therein. It is, in particular,pointed out that inasmuch as the first return filed by the petitioner wasitself belated, the petitioner could not have filed a belated return underS. 139 (5) and hence the Principal Commissioner could not haveconsidered the request for a condonation of delay in filing the revisedreturn. 3. Through a reply affidavit filed by the learned counsel for thepetitioner, my attention has been drawn to a decision of this Court inPala Marketing Co-operative Society Limited v. Union of India and Others [2008 (1) KHC 637], wherein on the aspect of condonation ofdelay, it was held by this Court that the Board should condone the delayif failure to condone the delay causes genuine hardship to the assesseeno matter whether the delay in filing the return is meticulously explained or not. 4. I have heard the learned counsel for the petitioner and thelearned Standing counsel for the respondents. 3. Through a reply affidavit filed by the learned counsel for thepetitioner, my attention has been drawn to a decision of this Court inPala Marketing Co-operative Society Limited v. Union of India and Others [2008 (1) KHC 637], wherein on the aspect of condonation ofdelay, it was held by this Court that the Board should condone the delayif failure to condone the delay causes genuine hardship to the assesseeno matter whether the delay in filing the return is meticulously explained or not. 4. I have heard the learned counsel for the petitioner and thelearned Standing counsel for the respondents. 5. On a consideration of the facts and circumstances of the caseand the submissions made across the Bar, I find that Ext.P9 order of the4th respondent cannot be legally sustained. At the outset, I find that asper the provisions of S.139 (4), as it stood prior to its amendment witheffect from 01.04.2017, any person who had not furnished a returnwithin the time allowed to him under sub-section (i), could furnish areturn of any previous year at any time before the expiry of one yearfrom the end of the relevant assessment year or before the completion ofthe assessment, whichever is earlier. The petitioner not having filed areturn for the assessment year within the time allowed to him under sub-section (i) could, therefore, have filed a revised return on or before31.03.2016, the date of expiry of one year from the end of the relevantassessment year viz.2014-2015. In the instant case, as already noticed,the petitioner filed two returns, one on 06.11.2014 (Ext.P1), followed byanother on 11.05.2015 (Ext.P2). Perhaps, the petitioner did not have toseek a condonation of delay in filing Ext.P2 return since it was a returnthat could be traced to S. 139 (4), as it then stood, and in that event, onethat was filed within the time allowed by the Section. In the instant case,however, I need not consider the said issue since it is the admitted case that the petitioner did file an application under S.119 (2) of the Act, for arelaxation from the rigours of S.139, and the said application wasconsidered by the 4th respondent on merits and rejected by Ext.P9 order.What I am called upon to decide here is the legality of Ext.P9 order andwhether the reasons stated therein would justify a rejection of the delaycondonation application preferred by the petitioner. 6. It is not in dispute that the assessment of the petitioner for thesaid year (2014-2015) is yet to be completed. The delay that thepetitioner sought to get condoned was only 42 days. Through Ext.P2revised return, the petitioner had in fact brought to the notice of theDepartment, the details of tax that had been deducted at source fromamounts received by the petitioner by way of compensation for landacquired from him during the previous year relevant to the assessmentyear. Even if the petitioner had not filed a revised return, I am of theview that the assessing authority cannot ignore the fact of deduction oftax at source, from payments made to the petitioner during the relevantprevious year, while completing the assessment for the assessment yearin question. This would be more so because, after deduction of tax atsource, the person deducting tax at source would have issued thenecessary intimation to the Income Tax Department while forwarding thededucted tax amounts to the Department on behalf of the petitionerassessee. I, therefore, find that there was no valid justification for the 4th respondent to have rejected the request of the petitioner under S.119 (2) of the Act, more so when granting the relaxation as prayed for bythe petitioner would not have prejudiced the interests of the departmentin any manner. The decision relied upon by counsel for the petitioneralso justifies the said finding. The reasons given in Ext.P9 order forrejecting the application preferred by the petitioner are neitherconvincing nor justified. Accordingly, I quash Ext.P9 order and direct therespondents to consider the details given in Ext.P2 revised return alsowhile finalising the assessment in relation to the petitioner for theassessment year 2014-2015 with consequential benefits to the petitioner. The Writ Petition is disposed as above. Sd/- A.K.JAYASANKARAN NAMBIAR JUDGE APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1COPY OF RETURN FILED BY THE PETITIONER FOR THE YEAR2014-15 DATED 06.11.2014.2014-15 DATED 06.11.2014. EXHIBIT P2COPY OF REVISED RETURN FILED BY THE PETITIONER FOR THEYEAR 2014-15 DATED 11.05.2015.YEAR 2014-15 DATED 11.05.2015. EXHIBIT P3COPY OF APPLICATION FOR CON DONATION OF DELAY ND GRANTOF REFUND SUBMITTED BEFORE THE 1ST RESPONDENT DATE11.06.2018.OF REFUND SUBMITTED BEFORE THE 1ST RESPONDENT DATE11.06.2018. EXHIBIT P4COPY OF MEDICAL CERTIFICATE SUBMITTED BY THE PETITIONERBEFORE THE 1ST RESPONDENT.BEFORE THE 1ST RESPONDENT. EXHIBIT P5COPY OF APPLICATION FOR CONDONATION OF DELAY AND GRANTOF REFUND SUBMITTED BEFORE THE 3RD RESPONDENT DATED19.06.2019.OF REFUND SUBMITTED BEFORE THE 3RD RESPONDENT DATED19.06.2019. EXHIBIT P6COPY OF NOTICE ISSUED BY THE 1ST RESPONDENT DATED02.08.2019.02.08.2019. EXHIBIT P7COPY OF APPLICATION SUBMITTED BEFORE THE 1ST RESPONDENTDATED 08.8.2019.DATED 08.8.2019. EXHIBIT P8COPY OF APPLICATION SUBMITTED BEFORE THE 1ST RESPONDENTDATED 14.08.2019.DATED 14.08.2019. EXHIBIT P9COPY OF ORDER ISSUED BY THE 4TH RESPONDENT DATED24.09.2019.24.09.2019. EXHIBIT P10COPY OF JUDGMENT IN WPC NO. 18876/2004 OF THIS HONBLECOURT DATED 17.10.2016.COURT DATED 17.10.2016. EXHIBIT P11COPY OF CIRCULAR NO. 9/2015 ISSUED BY THE CENTRALBOARD, OF DIRECTOR TAXES, NEW DELHI 09.06.2015.BOARD, OF DIRECTOR TAXES, NEW DELHI 09.06.2015. EXHIBIT P12COPY OF FORM 26AS OF THE PETITIONER FOR THE YEAR 2014-15.15. RESPONDENTS EXHIBITS:NIL //TRUE COPY// P.A TO JUDGE