TMI Blog2024 (1) TMI 1081X X X X Extracts X X X X X X X X Extracts X X X X ..... regard, it is of the view that the petitioner's assertion that it believed bona fide that it could lose the valuable right of requesting for an advance ruling by filing the returns of income while the applications are pending before the AAR cannot be disregarded as lacking credibility. As returns of income were filed on 04.03.2017, which is more than six months after the AAR ruling, another question arises, namely, whether the delay between 16.08.2016 and 04.03.2017 was adequately explained? - In the affidavit in support of the petition, the petitioner referred to the earlier rulings of the AAR in respect of previous projects of the petitioner to the effect that the income of the petitioner was not taxable in India and asserted that this led to the bona fide belief that returns need not be filed. The petitioner also averred that taxes were deducted and remitted in respect of income earned by the petitioner. The petitioner asserted that it did not file the returns of income on the due dates in these circumstances. If the petitioner had filed the returns of income prior to the due dates, it is likely that the applications for advance ruling would have been held to be no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re not filed by the petitioner because of the pending applications before the AAR. Eventually, the AAR ruled on the application filed in respect of the G.R. Engineering Private Limited project, which pertained to AY 2014-15, on 16.08.2016. Since a common question of law arises with regard to all these three projects and such question was answered by holding that the income is taxable in India, the petitioner states that it decided to file returns of income in respect of all three AYs upon receipt of said ruling. The petitioner further states that it experienced difficulty in filing the returns because the digital signature certificate (DSC) of one of the foreign directors could not be obtained easily. Eventually, the returns in respect of all three AYs were filed in March 2017. 4. With regard to AY 2014-15, upon rejection of the application to condone delay, the petitioner filed W.P. No.16681 of 2019 and the said writ petition was allowed subject to payment of costs by order dated 17.06.2019. These writ petitions were filed upon rejection of the applications to condone delay by the common order impugned herein. 5. Learned counsel for the petitioner invited my attention to Sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the writ petitions were filed were the statutory auditors of one of the subsidiaries of the above mentioned holding company, and that Chartered Accountants should not act as authorised representatives in such situation. 8. On the merits, learned counsel submitted that the filing of a return of income is not a bar to the filing of an application before the AAR. Learned counsel contended that this position was clarified by the Hon'ble Supreme Court in Sin Oceanic . He also referred to a ruling of the AAR in Monte Harris v. Commissioner of Income-tax(Monte Harris), [1995] 82 taxmann 365 (AAR), particularly paragraph 10 thereof, for the proposition that the words already pending as on the date of application in Section 245(R)(2) mean proceedings already pending before the Income Tax authorities on the date of application before the AAR and not to returns/proceedings submitted later. He also referred to a judgment of the Division Bench of the Delhi High Court in Hyosung Corporation v. Authority for Advance Rulings [2016] 66 taxmann.com 217 (Delhi) , where the interpretation placed on Section 245R(2) of the Income Tax Act in Monte Harris was cited with approval. By relyin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law; The provision extracted above indicates that the test is whether it is desirable or expedient to condone the delay so as to avoid genuine hardship. 12. In the case at hand, the petitioner explained the delay up to 16.08.2016, which is the date of ruling of the AAR in the matter relating to the G.R.Engineering Private Limited project, by pointing out that its applications for advance ruling may have been rejected otherwise. The petitioner relied on the proviso to Section 245R(2) in this regard. Section 245R(2), in relevant part, is set out below: (2) The Authority may, after examining the application and the records called for, by order, either allow or reject the application : [Provided that the Authority shall not allow the application where the question raised in the application,- (i) is already pending before any income-tax authority or Appellate Tribunal [except in the case of a resident applicant falling in sub-clause (iii) of clause (b) of section 245N] or any court; 13. As per the above provision, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... return of income for AY 2013-14, the refund claim is Rs. 2,80,15,691/-. These refund claims arise because substantial amounts were deducted towards tax at source. These are material facts while assessing genuine hardship. 16. The contention of learned standing counsel that the applications for advance ruling were filed for AYs 2012-13 and 2013-14 after the due dates for filing the returns of income and, therefore, these cases are distinguishable from the case relating to AY 2014-15 remains to be considered. As a matter of fact, as regards AY 2012-13, both the due date and the extended deadline under Section 139(4) had expired when the application for advance ruling was filed, whereas the extended deadline had not lapsed as regards AY 2013-14. In the affidavit in support of the petition, the petitioner referred to the earlier rulings of the AAR in respect of previous projects of the petitioner to the effect that the income of the petitioner was not taxable in India and asserted that this led to the bona fide belief that returns need not be filed. The petitioner also averred that taxes were deducted and remitted in respect of income earned by the petitioner. The petitioner asser ..... 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