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2016 (7) TMI 927 - KERALA HIGH COURT

2016 (7) TMI 927 - KERALA HIGH COURT - TMI - Condonation of delay - Held that:- When an assessee is suffering huge losses for over a period of time, it has to be assumed that they have genuine hardship and that genuine hardship can be redressed or avoided only on payment of the amount which is legally due to them. Of course, the delay is also a matter which is required to be considered by the Commissioner while directing refund of the amount. Section 119 (2) (b) clearly indicates that if it cons .....

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Assessment years 2006-07 onwards and 2008-09. It is stated that in the subsequent years, returns were filed belated. That by itself cannot be a reason to arrive at a finding as to whether there is any hardship caused to the assessee or not. In the case on hand, it is demonstrated by the material placed that the assessee company was suffering huge losses. In the said circumstances, if the amount claimed is not refunded, definitely their losses will be much more than what is computed presently. In .....

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2005 and 2005-2006 on the ground of delay. The assessee is before this Court challenging the said order inter alia contending that the first respondent had failed to consider the application in its proper perspective. The statute provides for a Company to file an application to condone delay for refund. Petition is not filed within the prescribed period. It is stated that the only consideration that is required is to find out whether there was genuine hardship, in which event the delay ought to .....

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ated genuine hardship to the petitioner. 2. Statement has been filed on behalf of the respondents supporting the stand taken in the matter. It is contended that the petitioner has even delayed the returns for subsequent years, which also has been taken note of while considering whether there is any genuine hardship, caused to the petitioner warranting condonation of delay. 3. Section 119 (2) (b) reads as under:- 119.(2): Without prejudice to the generality of the foregoing power: - (b) the Board .....

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or the petitioner places reliance on few judgments including Sitaldas K. Motwani v. Director General of Income Tax (International Taxation) & Ors. [2010 (323) ITR 223]. In that case, the Bombay High Court has taken a view that while considering Section 119 (2) (b), the authorities are expected to bear in mind that ordinarily the applicant applying for condondation of delay, does not stand to benefit by lodging its claim late and if the refund is legitimately due to the applicant, mere delay .....

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in view of the law laid down by the Apex court referred to herein above and while considering this aspect, the authorities are expected to bear in mind that ordinarily the applicant, applying for condonation of delay does not stand to benefit by lodging its claim late. Refusing to condone delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when delay is condoned the highest that can happen is that a cause would be .....

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a serious risk. The approach of the authorities should be justice oriented so as to advance cause of justice. If refund is legitimately due to the applicant, mere delay should not defeat the claim for refund. 16. 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 cl .....

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d, it was possible to arrive at the conclusion in question and not whether that was the only conclusion which could be arrived at on that evidence. Still further in paragraph 5 of Pala Marketing Co-operative Society Ltd v. Union of India [2009 (311) ITR 177], learned Single Judge of this Court in Paragraph 5 held as under: 5. So far as the merits of the assessee's claim for condonation of delay is concerned, I find the assessee is bound to get its accounts audited under s.64 of the Cooperati .....

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audit. However only from 1st April, 2001 report from auditor is required and even thereafter the audit report prepared by auditor appointed under the special statute could be submitted. Besides showing sufficient cause for delay in filing the return for refund, assessee its also established its case of genuine hardship inasmuch as it has suffered losses in the five succeeding years. The genuine hardship contemplated under s. 119 (2) (b) obviously is financial hardship caused to the assessee if .....

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nd eligible within a period of three months from the date of production of copy of this judgment by the petitioner. 5. Learned Standing Counsel appearing for the respondent however, submits that each case will have to depend upon its own facts. It is argued that in this particular case, the petitioner has consistently delayed filing the returns and seeking refund of claim. Such a person is not entitled for condonation delay. Therefore, it is contended that the challenge to Ext.P4 is not sustaina .....

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lso relied upon various judgments. Ext.P2 is issued for the corresponding year. It is therefore relevant to note that the total amount which is sought to be refunded is more than ₹ 6 lakh. Ext.P3 is submitted to the Commissioner of Income Tax, wherein the petitioner had given all details regarding the loss that they had suffered over a period of time. 7. Having regard to the aforesaid submission, I am of the view that when an assessee is suffering huge losses for over a period of time, it .....

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