TMI Blog2018 (3) TMI 1704X X X X Extracts X X X X X X X X Extracts X X X X ..... the delay in filing the Return Of Income, the approach of the 1st respondent should be justice oriented so as to advance the cause of justice. The delay of 37 days in filing the Return Of Income should not defeat the claim of the petitioner. In the case of the petitioner failing to explain the reasons for the delay in a proper manner, in such circumstances, the delay should not be condoned. But, when the petitioner has satisfactorily explained the reasons for the delay of 37 days in filing the Return Of Income, the delay should be condoned. Since the petitioner has satisfactorily explained the reasons for the delay in a proper manner, it is of the considered view that the 1st respondent should have condoned the delay of 37 days in filing the Return Of Income along with the Audit Report. - W. P. No. 24273 of 2016 - - - Dated:- 28-3-2018 - M. Duraiswamy, J. For the Petitioner : Mr.Vijaya Narayanan, Senior Counsel for Mr.R.Sivaraman For the Respondents : Mrs.Hema Muralikrishnan, Senior Standing Counsel ORDER The petitioner has filed the above Writ Petition to issue a writ of certiorarified mandamus to call for the records pertaining to the order passed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .) for a consideration of ₹ 310 crores. The aforesaid consideration was based upon two independent valuation exercises from M/s.TRC Corporate Consulting Pvt. Ltd and M/s.C.Ramaswamy B.Srinivasan, Chartered Accountants. (iv)The Tax Auditors viz., M/s.S.R.Batliboi Associates, Chartered Accountant had certain reservations in the valuation of the aforesaid business transfer and wanted to issue a disclaimer in this regard in the Audit Report in Form-3CB prepared for the purpose of Tax Audit. The reservation was orally communicated by their Tax Auditors to the petitioner Company on the last day of November 2014. The petitioner made an attempt to explain their Auditors about the last date for filing return and the importance and consequences of filing the Tax Audit Report along with the return. However, the Auditors were delaying the process of Audit completion without proper reasons inspite the petitioner providing expert valuation report from other professional firm to satisfy their concerns. (v)The Auditors could have completed the audit by providing their qualified opinion as regards the above point, but they used this point to justify their delay in completion of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er Company wished to file a revised Return Of Income, after making certain modifications to the earlier one, which is uploaded on 07.01.2015. Such filing of the revised return is possible only if the original return had been filed within the time prescribed under Section 139 (1) of the Act. (ix)In the original return filed on 07.01.2015, exemption for the transfer of business to wholly owned subsidiary under Section 47(iv) was inadvertently not claimed and it was wrongly shown under the head Long term capital gains in the original Return Of Income. (x)In order to accept the revised return, the original return should be filed under Section 139(1) of the Act within the due date, which was 01.12.2014 for the previous year 2013-14, relevant to the assessment year 2014-15. Since the petitioner Company did not file the return under Section 139(1) within the time limit (i.e.) before 01.12.2014, the petitioner had filed an application on 25.03.2015 for condonation of the delay of 37 days in filing the Return Of Income under Section 119(2)(b) of the Act for the assessment year 2014-15. (xi)Since the petition filed under Section 119(2)(b) was pending for a long time, the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Audit work independent of the taxpayer. There is no genuine hardship for the petitioner. In these circumstances, the respondents prayed for dismissal of the Writ Petition. 4.Mr.Vijaya Narayanan, learned senior counsel appearing for the petitioner submitted that the 1st respondent has erroneously dismissed the petition when the petitioner had satisfactorily explained the reasons for the delay. Further, the learned senior counsel submitted that since there was some misunderstanding between the petitioner and their Auditor, the Return Of Income could not be filed before the due date, hence, there was a delay of 37 days in filing the Return Of Income. 4.1.In support of his contentions, the learned senior counsel relied upon the following judgments: (i)[2006] 157 Taxman 1 (SC) [Goetze (India) Ltd. Vs. Commissioner of Income Tax] wherein the Apex Court held as follows: ... 4.The decision in question is that the power of the Tribunal under Section 254 of the Income Tax Act, 1961, is to entertain for the first time a point of law provided the fact on the basis of which the issue of law can be raised before the Tribunal. The decision does not in any way relate to the powe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is case, when the petitioner as a litigant is entitled to claim carry forward loss, mere delay should not defeat the claim of the petitioner. The judgments relied on by the learned counsel for the petitioner squarely applies to the facts and circumstances of the present case. In these circumstances, I am of the view that the first respondent should have condoned the delay of one day in filing the return by the petitioner. (iv)[2010] 195 Taxman 106 (Bombay) [Bombay Mercantile Co-op. Bank Ltd. Vs. Central Board of Direct Taxes] wherein the Bombay High Court held as follows: ... 7.As can be seen from the reading of the said provision that the board is vested with the power to admit any application after the expiry of the period specified by or under this Act if sufficient grounds are made out. To effectuate such power, that the CBDT had issued the Circular No.8 of 2001. It is in the context of the said statutory provision as well as the circular that the reasons mentioned by the petitioner in the application for condonation of delay have to be considered. As indicated above, the principal reason cited by the petitioner is that the statutory auditors were appointed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rty should not be made to suffer on account of technicalities. 5.Countering the submissions made by the learned senior counsel for the petitioner, Mrs.Hema Muralikrishnan, learned senior standing counsel for the respondents submitted that the petitioner had not explained the reasons for the delay in a proper manner and therefore, the 1st respondent had rightly dismissed the petition. Further, the learned standing counsel submitted that in the absence of acceptable reasons given by the petitioner, the delay should not be condoned. 5.1.In support of her contentions, the learned standing counsel relied upon the following judgments: (i)[1998] 101 Taxman 634 (Kerala) [A.P.Sivaraman Vs. Income Tax Officer] wherein a Division Bench of the Kerala High Court held as follows: ... 6.We fully agree with the learned Single Judge that it was purely within the discretion of the Board to condone or not to condone the delay. In this case, it cannot be said that the Board acted arbitrarily, inasmuch the Board rejected the application for condonation of delay only after taking into consideration the report called for from the Commissioner, Cochin, which were duly forwarded to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ary details, which were called for from time to time. According to the petitioner, in full faith, the petitioner Company submitted the details called for by the Auditor in a progressive manner. During the assessment year 2014-15, the petitioner Company transferred its Operating Maintenance (O M) business division on a going concern basis as a slump sale to its wholly owned subsidiary Company namely Renewable Energy Generation Pvt Ltd (now, renamed as REGEN Infrastructure and Services Pvt. Ltd.) for a consideration of ₹ 310 crores. The said consideration was based upon two independent valuation exercises from M/s.TRC Corporate Consulting Pvt. Ltd and M/s.C.Ramaswamy B.Srinivasan, Chartered Accountants. The Tax Auditors viz., M/s.S.R.Batliboi Associates, Chartered Accountant had certain reservations in the valuation of aforesaid business transfer and wanted to issue a disclaimer in this regard in the Audit Report in Form-3CB prepared for the purpose of Tax Audit. This reservation was orally communicated to the petitioner by their Tax Auditors on the last day of November 2014. The petitioner made an attempt to explain their Auditors about the last date for filing return an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the Return Of Income, the delay should be condoned. 10.As contended by the petitioner, the petitioner Company could not be blamed for the delay in carrying out its audit, as the same is beyond its control. Since there was some misunderstanding between the erstwhile Auditor and the petitioner, the Return Of Income could not be presented before the due date (i.e.) 30.11.2014. The petitioner has stated that even the NOC could not be obtained from the erstwhile Auditor immediately, hence, after obtaining NOC, they have engaged M/s.CNGSN Associates for filing the Return Of Income along with the Tax Audit Report. Thereafter, the petitioner had presented the Return Of Income along with the Report and uploaded the same on 07.01.2015. When once the authority has been conferred with discretion to condone the delay, the application seeking condonation of the delay of 37 days cannot be rejected for such reasons as are assigned by the 1st respondent. The 1st respondent should exercise its discretion in a proper manner. 11.The judgments relied upon by the learned senior counsel for the petitioner squarely applies to the present case. Though there is no dispute with regard to the ratio la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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