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2025 (3) TMI 1279 - HC - Income TaxCondonation of delay in filing the return of income u/s 119 (2) (b) - Petitioner submitted genuine hardship for not filing the return of income for reason firstly on account of non-deposit of TDS deposited by the purchaser of the property till 11.06.2022 and inability of the petitioner to travel to India due to Covid-19 pandemic situation at the relevant point of time - HELD THAT - As in view of the fact that the petitioner is a non-resident staying at USA was genuinely prevented from filing the return in view of Covid-19 pandemic situation the respondent ought to have condoned the delay in filing the return for Assessment Year 2020-2021. It is also not in dispute that the petitioner has furnished computation of income along with computation of long-term capital gain along with reply dated 17.01.2023 filed in response to the notice dated 10.01.2021 issued by the respondent which is placed on record. On perusal of the Form 26AS for AY 2020-2021 it is also found that the purchaser of the property namely M/s. Ashutosh Builders deposited the amount of TDS which was deducted at the time of purchase in the year 2019 only on 11.06.2022. Therefore the petitioner was not able to file the return for Assessment Year 2020-2021 claiming the refund in view of late deposit of TDS by the purchaser of the property. The impugned order passed u/s 119 (2) (b) is not tenable and is accordingly quashed and set aside and delay in filing the return of income for A.Y. 2020-21 is required to be condoned to permit the petitioner to file return of income for belatedly claiming the refund as per the computation of income placed on record.
ISSUES PRESENTED and CONSIDERED
The core legal issues considered in this judgment are:
ISSUE-WISE DETAILED ANALYSIS 1. Genuine Hardship and Condonation of Delay under Section 119(2)(b) of the Income Tax Act, 1961 Relevant Legal Framework and Precedents: Section 119(2)(b) of the Income Tax Act, 1961, empowers the authorities to condone delays in filing returns if the taxpayer can demonstrate genuine hardship. The phrase "genuine hardship" is to be construed liberally, but the burden of proof lies with the taxpayer. Court's Interpretation and Reasoning: The Court recognized that the petitioner, a non-resident Indian, faced difficulties due to the Covid-19 pandemic, which restricted international travel and impacted the ability to file returns. The Court noted that the petitioner's inability to file the return was also due to the late reflection of TDS credit in Form 26AS, which was beyond the petitioner's control. Key Evidence and Findings: The petitioner provided evidence of travel restrictions due to Covid-19 and the late deposit of TDS by the property purchaser, which was only reflected in Form 26AS after the due date for filing the return. The petitioner also submitted a computation of income and capital gains in response to the notice issued by the respondent. Application of Law to Facts: The Court applied the principle of liberal interpretation of "genuine hardship" and found that the petitioner's circumstances, including the pandemic and the late TDS deposit, constituted genuine hardship. The Court found that these factors justified the condonation of delay. Treatment of Competing Arguments: The respondent argued that the petitioner could have filed the return online from anywhere in the world and that the delay was not justified. However, the Court found that the petitioner's inability to file the return was due to factors beyond their control, such as the late TDS deposit and travel restrictions. Conclusions: The Court concluded that the petitioner demonstrated genuine hardship and that the delay in filing the return should be condoned. The Court found the respondent's rejection of the application to be unjustified. SIGNIFICANT HOLDINGS The Court held that the circumstances faced by the petitioner, including the Covid-19 pandemic and the late TDS deposit by the property purchaser, constituted genuine hardship under Section 119(2)(b) of the Income Tax Act, 1961. The Court quashed the impugned order and directed the respondent to pass a fresh order condoning the delay in filing the return for Assessment Year 2020-2021. Core Principles Established:
Final Determinations on Each Issue:
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