2024 (12) TMI 1275 - HC - Income Tax

Condonation of delay of 799 days filed by the petitioner in filing Form 9A - whether there is a power coupled with statutory discretion conferred upon the commissioners/competent authority under Section 119 (2) (b) authorizing them to admit belated filing of Form 9A? - petitioner uploaded a revised computation of income dated 09 November 2019 with a view to rectify certain computation mistakes HELD THAT - There is undoubtedly a delay in filing Form 9A on part of the petitioner however as observed by us above such delay appears to be completely bona fide. The principles which are paramount and jurisprudentially accepted in the case of Jyotsna Mehta 2024 (9) TMI 585 - BOMBAY HIGH COURT in our opinion mandates their application in the present facts in condoning delay under the umbrella of section 119 (2) (b) of the IT Act. It is pertinent to reiterate that in a fact situation as the present to dissuade an assessee to file return can be counter-productive to the very object and purpose the tax laws intend to accomplish. In cases such as this where the delay is sufficiently explained the same ought to be condoned. Pursuant to the filing of such Form 9A under Rule 17 (1) by the petitioners though belatedly it had duly submitted two letters addressed to the respondent no. 1 justifying such delay. A perusal of the Impugned Order for the A.Y. 2017-2018 indicates that the jurisdictional assessing officer has totally lost sight of the first two letters of the petitioner. Though the Impugned Order refers to the letter of the petitioner dated 21 September 2023 there is no finding much less reasoning reflected in the order except to harp on the issue that the delay in filing Form 9A belatedly was not a procedural lapse and thus cannot be condoned. We do not find force in such hyper technical approach taken by the assessing officer in rejecting the belated filing of Form 9A by the petitioner In the present case the delay is of 799 days on the part of the petitioner in filing Form 9A supported by sufficient cause deserves to be condoned.

Summary

Issues Involved:
1. Whether the respondent was justified in rejecting the application for condonation of delay in filing Form 9A for AY 2017-2018 under Section 119(2)(b) of the Income Tax Act, 1961.
2. Whether the impugned order failed to consider the CBDT Circulars authorizing the condonation of delay.
3. Whether the petitioner's claim for deductions was improperly disallowed.

Issue-wise Detailed Analysis:

1. Justification of Rejection of Condonation Application:
The primary issue was whether the respondent was legally justified in rejecting the petitioner's application for condonation of a 799-day delay in filing Form 9A for AY 2017-2018. The petitioner argued that the delay was due to a change in the filing procedure from manual to electronic, which was beyond their control. The petitioner contended that the delay was neither deliberate nor intentional and should be condoned under Section 119(2)(b) of the IT Act, which provides discretion to the Commissioner to admit belated applications to avoid genuine hardship. The court found that the assessing officer failed to consider the bona fide reasons for the delay, which were sufficiently explained by the petitioner, and thus, the rejection was not justified.

2. Consideration of CBDT Circulars:
The petitioner relied on various CBDT Circulars, particularly Circular No. 7 of 2018 and Circular No. 30 of 2019, which extended the time for filing Form 9A for AY 2017-2018. These circulars allowed the Commissioners to condone delays in filing Form 9A if the assessee was prevented by reasonable cause. The court noted that the petitioner filed Form 9A within three days of the issuance of the CBDT Circular extending the deadline, demonstrating their intent to comply. The impugned order failed to consider these circulars and the legislative intent to mitigate hardship, which was a significant oversight.

3. Disallowance of Deductions:
The petitioner claimed deductions for depreciation and capital expenditure, which were disallowed by the respondent. The court observed that the petitioner had filed a revised computation of income to rectify these claims during the assessment proceedings. The assessing officer's decision to disallow these deductions was linked to the belated filing of Form 9A, which the court found to be an incorrect approach. The court emphasized that the delay in filing Form 9A was procedural and should not have affected the substantive claims for deductions.

Conclusion:
The court concluded that the impugned order suffered from non-application of mind and a hyper-technical approach. It failed to consider the bona fide reasons for the delay, the legislative intent of the CBDT Circulars, and the genuine hardship that would be caused to the petitioner. The court set aside the impugned order, allowed the petition, and directed the respondents to admit the belated filing of Form 9A and consider the petitioner's claims for deductions on merits. The rule was made absolute in terms of the reliefs sought by the petitioner, with no order as to costs.