TMI Blog2014 (12) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... occasion to meet the same - the delay in filing of an application if not coupled with some rights being created in favour of others, should not by itself lead to rejection of the application - This is of course upon the Court being satisfied that there were good and sufficient reasons for the delay on the part of the applicant - a company dealing in Artifacts and finances, which has the benefit of services of professionals and auditors - an acceptable explanation was offered by the petitioner and a case of genuine hardship was made out - The refusal by the CBDT to condone the delay was a result of adoption of an unduly restrictive approach - The CBDT appears to have proceeded on the basis that the delay was deliberate, when from explanation offered by the petitioner, it is clear that the delay was neither deliberate, nor on account of culpable negligence or any mala fides – thus, the order of the CBDT refusing to condone the delay in filing the Return of Income for the AY 1997-1998 is to be set aside – delay condoned and Return of Income is directed to be admitted for consideration – the AO is directed to scrutinize the Return of Income and examine the claim for refund on merits - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... upon the circumstances in which the delay was occasioned in filing of return for the Assessment Year 1997-1998. In the response, reference was made, inter alia, to CBDT Circulars as well as the decision of this Court in case of Bharatiya Engineering Corporation Private Limited vs. R.G. Deshpande 130 ITR 442 , urging that a liberal approach be adopted in matters of condonation of delay. 6] The CBDT, by impugned order dated 16 May 2006 has however, declined to condone the delay, inter alia, on the following grounds: (a) That audited accounts were prepared by 14 September 1997. However, there is no proper explanation as to why the returns came to be filed only on 14 September 1999. Further there is no explanation as to why the application seeking condonation of delay came to be filed only on 17 April 2002. All this, leads to the inference that delayed return was only to avoid scrutiny; (b) That no documentary evidence in support of misplacement of TDS Certificate by postal authorities on account of change in address of the petitioner's company or evidencing delay in receipt of duplicate TDS Certificate was produced. 7] Ms Vissanji, learned counsel for the petitioner, s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 8] Mr. Pinto, learned counsel for the revenue submitted that the impugned order dated 16 May 2006 is well reasoned and did not warrant any interference. The accounts for the Assessment Year 1997-1998 had been duly audited by 14 September 1997. In such circumstances, there is no explanation for delay of almost two years in filing the Return of Income. The petitioner could have always filed the return within time, and thereafter invoked the provisions of Section 154 of the said Act to rectify the order passed by furnishing TDS Certificates, if indeed the same had been misplaced or mislaid. The shifting of office, as per the documentary evidence produced by the petitioner itself took place on 16 June 1997. The so called misplacement of documents, on account of shifting did not prove any hindrance in the matter of audit of accounts which was completed by 14 September 1997. There is no material produced by the petitioner with regard to claim of misplacement of TDS Certificates or the efforts made by the petitioner to retrieve the same, including by way of obtaining duplicates. In such circumstances, the CBDT was justified in drawing the inference that the delay in filing of returns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ning the correctness of the claim could direct the Assessing Officer to examine the same albeit issued after the impugned order. 11] The expression 'genuine hardship' came up for consideration of the Supreme Court in case of B.M. Malani (supra), wherein, by reference to New Collins Concise English Dictionary, the Supreme Court accepted the position that 'genuine' means not fake or counterfeit, real, not pretending (not bogus or merely a ruse). Further, a genuine hardship would, inter alia, mean a genuine difficulty. The ingredients of genuine hardship must be determined keeping in view the dictionary meaning thereof and legal conspectus attending thereto. For the said purpose another well known principle, namely, that a person cannot take advantage of his own wrong, may also have to be borne in mind. Compulsion to pay any unjust dues per se would cause hardship. But a question as to whether the default in payment of the amount was due to circumstances beyond the control of assessee, also bears consideration. 12] In case of R. Seshammal (supra), the Madras High Court was pleased to observe as under: This is hardly the manner in which the State is expected t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay. In fact he runs a serious risk. The approach of the authorities should be justice oriented so as to advance the cause of justice. If refund is legitimately due to the applicant, mere delay should not defeat the claim for refund. (emphasis supplied) 14] In case of Bombay Mercantile Cooperative Bank Limited (supra), this Court again observed that it is well settled that in matters of condonation of delay highly pedantic approach should be eschewed and a justiceoriented should be adopted. It also observed that a party should not be made to suffer on account of technicalities. 15] Applying the aforesaid principles to the facts and circumstances of the present case, we are of the opinion, that the CBDT, in passing the impugned order, has adopted an unduly technical or pedantic approach. 16] The petitioner, at Exhibit-P to the petition has furnished the following details with regard to filing of returns from the date of its incorporation, i.e., 15 February 1995. M/S.ARTIST TREE PVT. LTD. DETAILS OF RETURNS FILED DATE OF INCORPORATION 15.02.1995 ASST.YE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by or under the said Act for making such application or claim and to deal with the same on merits in accordance with law. The expression 'deal with the same on merits in accordance with law' makes it clear that the CBDT, even where it authorises an ITO to admit an application or claim made belatedly, would obviously direct its consideration on merits and in accordance with law. In such circumstances, the contention of Mr.Pinto, learned counsel for the revenue that the effect of an order condoning delay in filing the returns, leave the ITO with no choice but to grant the refund as claimed, has no substance. Obviously, it would be well within the jurisdiction of such authority to deal with the claim on merits and in accordance with law. This Court in case of Sitaldas (supra) has explained the position in the following words: Whether the refund claim is correct and genuine, the authority must satisfy itself that the applicant has a prima facie correct and genuine claim, does not mean that the authority should examine the merits of the refund claim closely and come to a conclusion that the applicant's claim is bound to succeed. This would amount to prejudging the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on grounds of delay or laches is that the rights which have accrued to others by reason of the delay in filing the petition should not be allowed to be disturbed unless there is a reasonable explanation for the delay. The real test to determine delay in such cases is that the petitioner should come to the Court before a parallel right is created and that the lapse of time is not attributable to any laches or negligence. The test is not to physical running of time M/s.Dehri Rohtas Light Railway Company Ltd. vs. District Bord, Bhojpur ors (1992) 2 SCC 598. This does not mean or imply that the applicant seeking condonation of delay is absolved of the requirement to establish genuine hardship and sufficient cause. Similarly, the length of delay is not invariably the crucial factor. What is really important is the acceptability of the explanation offered. In every case of delay, there may be some lapse on the part of the party concerned. That by itself is not ordinarily sufficient to turn down the plea or to shut the doors against him. If the explanation offered does not smack of mala fides or it is not put forth as a part of dilatory strategy, the Court is expected to show utmost ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble explanation was offered by the petitioner and a case of genuine hardship was made out. The refusal by the CBDT to condone the delay was a result of adoption of an unduly restrictive approach. The CBDT appears to have proceeded on the basis that the delay was deliberate, when from explanation offered by the petitioner, it is clear that the delay was neither deliberate, nor on account of culpable negligence or any mala fides. Therefore, the impugned order dated 16 May 2006 made by the CBDT refusing to condone the delay in filing the Return of Income for the Assessment Year 1997-1998 is liable to be set aside. Consistent with the provisions of Section 119(2)(b) of the said Act, the concerned I.T.O. or the Assessing Officer would have to consider the Return of Income and deal with the same on merits and in accordance with law. 24] We make it clear that we have not examined the issue of whether the petitioner is indeed entitled to any refund or not, as in our opinion that is a matter for the concerned I.T.O. or the Assessing Officer to decide in accordance with law after subjecting the Return of Income to scrutiny assessments. 25] Accordingly, the impugned order dated 16 May 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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