TMI Blog2007 (11) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... -2007 - C. N. RAMACHANDRAN NAIR J. Bechu Kurian Thomas for the petitioner. P. Parameswaran Nair for respondent No. 1. George K. George for respondents Nos. 2 to 4. JUDGMENT C. N. Ramachandran Nair J.- The petitioner is a co-operative society stated to be engaged in marketing agricultural produce of its members. Even though the society was entitled to exemption from income-tax during the assessment year 1997-98, it remitted an advance tax of Rs. 10 lakhs during the accounting year. Besides this, an amount of Rs. 47,957 is recovered by others from the petitioner's bills towards tax deduction at source. The petitioner's audit is done by an auditor appointed under section 63(4) of the Kerala Co-operative Societies Act, 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ejected as time barred. Standing counsel rightly pointed out that the decision does not refer to the relevant provisions on refund which are covered by Chapter XIX of the Income-tax Act. The scheme of refund under this Chapter provides in section 239(2)(c) that a claim of refund has to be made within one year from the last date of the relevant assessment year. Counsel for the petitioner submitted that when refund is claimed through a return, the process of assessment has to be completed as provided under Chapter XIV of the Income-tax Act. Even though a claim for refund made by filing a regular return involves assessment to determine liability, it cannot be said that the exercise is a regular assessment as contemplated under Chapter XIV of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ard as guidelines for them and the Assessing Officers to exercise powers under section 119(2)(b) of the Act. Since refund claimed by the petitioner is amount of advance tax paid and tax deducted at source recovered and remitted by others, the petitioner's is a case falling under the said guidelines. Besides this, section 119(2)(b) authorises the Central Board to condone the delay among other things in entertaining a return if it considers it desirable or expedient to do so for avoiding genuine hardship for the assessee. For easy reference section 119(2)(b) of the Income-tax Act is extracted hereunder : " 119. (2) Without prejudice to the generality of the foregoing power ;- . . . (b) the Board may, if it considers it desirable or expedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in filing return is meticulously explained or not. Strangely the Board has stated in its order that it is not possible to investigate (scrutinise) the return of income because the statutory time limit has already elapsed. I do not know on what basis this statement is made because even in a case where the claim of refund is made, the Assessing Officer has to examine the liability for income-tax of the petitioner and refund is made only if tax is not payable or the amount paid is in excess of the tax, interest, etc., payable. In other words, once the Board allows the application under section 119(2)(b) of the Act, the matter goes to the Assessing Officer for considering the assessee's claim for refund under section 237. Section 237 makes it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for delay in filing the return for refund, the assessee has also established his case of genuine hardship inasmuch as it has suffered losses in the five succeeding years. The genuine hardship contemplated under section 119(2)(b) obviously is financial hardship caused to the assessee if delay is not condoned. If the delay in this case is not condoned, the co-operative society will be deprived of Rs. 10 lakhs and odd which it was otherwise not liable to pay by virtue of the exemption claimed under section 80P of the Income-tax Act. In the circumstances, I quash exhibit P 9 declaring the petitioner's entitlement for condonation of delay under section 119(2)(b) of the Act and consequently direct the fourth respondent to process the petitioner's ..... X X X X Extracts X X X X X X X X Extracts X X X X
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