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2018 (1) TMI 1113 - HC - Income TaxCondonation of delay in filing the income tax return and for making a claim for refund of the tax deducted at source - petitioners were unable to file its return of income within the prescribed time u/s 139(1) - this resulted in the petitioners not being able to claim refund of tax deducted at source on receipt of interest from banks / others - Held that:- We find that the impugned order does not deal with the various criteria which the petitioners were asked to satisfy for consideration of its application for condonation of delay as set out by order dated 24th April, 2017 issued by the office of the CIT (Exemption). The impugned order has in fact proceeded to deal with the merits of the petitioners' claim for expenses in determining its income and claim for exemption under Section 11 of the Act. In fact, the impugned order inter alia rejects the application for condonation of delay on the ground that there is huge cash expenditure on the part of the petitioners Trust. In fact, at the stage of considering delay condonation application filed by the petitioners, the merits of the claim cannot be a subject matter of examination as held by this Court in the case of Sitaldas K. Motwani (2009 (12) TMI 36 - BOMBAY HIGH COURT ). Kerala High Court in the case of Pala Marketing Cooperative Society Ltd. Vs. Union of India [2007 (11) TMI 294 - KERALA HIGH COURT] the Court held that in case where a party is deprived of a refund, then, it would be a case of genuine hardship. This of course has to be considered along with other facts of the application for condonation of delay. Thus we set aside the impugned order dated 26th July, 2017 passed by the Commissioner of Income Tax under Section 119(2)(b) of the Act rejecting the petitioners' application for condonation of delay in filing the return of income and delay in claiming refund due to it - matter restored before the CIT.
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