INCOME TAX RETURN FILED BY A DELAY OF 2 SECONDS

In ‘Income Tax Officer, Bodhi Towers, Pune v. Kumar Builders Project, Pune Private Limited’ – 2025 (6) TMI 1053 – ITAT, Pune, the respondent assessee, in this appeal, is a private limited company engaging in the business of development of real estate projects. The respondent filed its original return of income on 31.10.2019 declaring a loss of Rs. 1,22,14,57,394/- and claimed the TDS credit of Rs. 4,02,541/-. The respondent claimed a refund to the tune of Rs. 4,02,541/-. The said return was revised on 06.03.2020 claiming income tax refund of Rs. 2541/- and carry forward loss of Rs. 3,95,51,713/-. The Central Processing Center (‘CPC’ for short) did not allow the claim of carry forward business loss of Rs. 3,95,51,713/- as claimed in the return on the ground that the original return was filed belatedly i.e. beyond the prescribed date of 31.10.2019.

Against the order of CPC, the respondent assessee filed an appeal before the First Appellate Authority, Joint Commissioner of Income Tax (Appeals). The respondent assessee contended before the First Appellate Authority that the original return was uploaded on the income tax e-filing website on 31.10.2019 before 00:00 hours. The acknowledgement generated in the system the return filing date as 01.11.2019. In Form ITR the filing status is shown as the return has been filed within time. Therefore, the respondent assessee contended that the said return of income filed by the respondent assessee is not a belated return and the same should be treated as filed in time. The First Appellate Authority held that the return of income has been filed in time and therefore the respondent assessee is entitled to claim the benefit of carry forward of loss.

Aggrieved against the order of the First Appellate Authority the Department filed the present appeal before the Income Tax Appellate Tribunal (‘ITAT’ for short). The Department raised the following grounds of appeal before the ITAT-

• Whether on facts and circumstances of the case, the Ld. JT.CIT(A) has erred in not appreciating the fact that the CPC has treated the original return of income itself as defective return?
• Whether on facts and circumstances of the case, the Ld. JT.CIT(A) has erred in not appreciating that when the original return of income itself has been declared as defective, all the consequences of the assessee being treated as non-filer will be attracted and therefore the loss claimed by the assessee will not be carried forward?

The Department contended that the original return has been filed after the statutory period and is delayed by 02 seconds, therefore, the CPC is fully justified in denying the claim of carry forward loss of business loss.

The respondent submitted the following before the ITAT-

• the acknowledgement shows as the return was filed under section 139(1);
• the CPC has mentioned that the return was submitted electronically on 01.11.2019 at 00:00:02 hours;
• due to technical glitches and rush hours for which there was a delay of 02 seconds in filing of the return.

Therefore, the respondent contended that the delay in the instant case is only 02 seconds which is due to technical glitches and rush hours in the portal of the income tax department, therefore, the respondent should not be penalized. The order of JCIT(A) was fully justified in allowing the claim of the respondent in carrying forward of business loss.

The respondent relied on the following judgments-

• The ‘Khedbrahma Taluka Primary Teachers Co-op. Credit Society Limited’ - [2023 (2) TMI 749 - ITAT AHMEDABAD], the ITAT while considering the delay of 4 minutes 42 seconds in uploading the return of income held that the return was filed in time and the CPC is not correct in denying the claim of deduction u/s 80P of the Act to the assessee u/s 143(1)(a)(v) proceedings.
• ‘Palava Dwellers Private Limited and Lodha Developers Limited’ - [2020 (4) TMI 842 - ITAT MUMBAI] the ITAT held that where the delay in filing of the return was 2 minutes which was caused due to technical glitch and last hour rush in the website, cannot be held against the assessee and accordingly the Assessing Officer was directed to treat the return filed by the assessee for assessment year 2014-15 as filed in time and consequently to consider the revised return filed by the assessee for the purpose of computing the income of the assessee.
• Jeevandarshi Marketing Private Limited v. Income Tax Officer, 2022 (11) TMI 1556 - ITAT KOLKATA, the ITAT held that the delay in filing of the return of income by 2 minutes 7 seconds as filed within time on account of technical glitches / malfunctioning in the system / portal of the Income Tax Department for which the assessee cannot be penalized.

The ITAT heard the submissions of both sides and perused the orders of lower authority as well as the First Appellate Authority and also the various judgments cited by the parties to the appeal. The only dispute in the instant case, as per ITAT, is regarding the treatment of return as filed within time or not due to delay in filing of the return by 02 seconds. The ITAT relied on the judgment in ‘Palava Dwellers’ (supra) in which the delay in filing the return is 2 minutes. The Mumbai ITAT held that the delay of 2 minutes, which was caused due to technical glitch and last hour rush in the website, cannot be held against the assessee and accordingly the Assessing Officer was directed to treat the return filed by the assessee for assessment year 2014-15 as filed in time and consequently to consider the revised return filed by the assessee for the purpose of computing the income of the assessee.

The next issue arised in this case whether such delay can be condoned by the Authorities. The ITAT, Mumbai in ‘Palava Dwellers’ (supra) observed that in the instant case, there is no dispute or denial of the fact that the Return of Income filed by the Respondent/Assessee for the Assessment Year 2010-11, has been uploaded sometime past 00.00 hours on 15.10.2010. One can take judicial notice of the fact that uploading of return requires not only an effort but also consumes sometimes. If the assessee has encountered certain hardship or difficulty in uploading his return, as alleged by him due to a technical snag in the website of the Income Tax Department due to the last hour rush of filing of returns, the delay deserves to be condoned.

The ITAT held that the delay is only of two minutes which was caused due to technical glitch and last hour of rush in the website. The ITAT directed the Assessing Officer to treat the original return filed by the assessee for the A.Y. 2014-15 as filed in time and consequently to consider the revised return of income filed by the assessee for the purpose of computing the income of the assessee.

In regard to the rejection of the carry forward of losses for delay in filing the return by the Assessing Officer, the ITAT relied on the order of ITAT, Ahmedabad Bench in ‘Khedbrahma Taluka Primary Teachers Co-op. Credit Society Limited v. ADIT’ (supra). The ITAT, Ahmedabad Bench while considering the delay of 4 minutes 42 seconds in uploading the return of income held that the return was filed in time and the CPC is not correct in denying the claim of deduction under section 80P of the Act to the assessee under 143(1)(a)(v) proceedings.

In view of the above the ITAT held that there is no error in the order of the First Appellate Authority directing the Assessing Officer to treat the original return filed with a delay of 02 seconds as filed in time under section 139(1) of the Act.