High Court Of Delhi
Lodhi Property Company Ltd. vs. Under Secretary, Department Of Revenue
Section 119(2)(b), 139(3)
Asst. Year 2004-05
Badar Durrez Ahmed & V.K. Jain, JJ. Writ Petn. No. 437 of 2010
16th April, 2010
Counsel Appeared :
Salil Kapoor with Sanat Kapoor, for the Appellant : Ms. Suruchi Aggarwal, for the Respondent
Badar Durrez Ahmed, J. :
In this writ petition, the petitioner sought the quashing of the order dt. 29th Oct., 2009 passed by the Central Board of Direct Taxes (hereinafter referred to as ‘CBDT’), rejecting the application of the petitioner under s. 119 of the IT Act, 1961 (hereinafter referred to as ‘the said Act’), whereby a prayer had been made for condoning the delay of one day in filing the return of income in respect of the asst. yr. 2004-05. It is an admitted position that the due date for filing of the return was 1st Nov., 2004. The return was, in fact, filed on 2nd Nov., 2004. According to the petitioner, the petitioner’s representative reached the Central Revenue Building, I.P. Estate, around 5.15 p.m. on 1st Nov., 2004 for the purposes of filing the said return of income. However, he was sent from one room to the other and by the time he reached room No. 398-F, where his return was said to be accepted, it was already 6.00 p.m. and he was told that the return would not be accepted because the counter had been closed. These circumstances are recorded in the letter dt. 1st Nov., 2004, which was delivered in the office of the Dy. CIT, Circle-12(1), New Delhi, on the very next day, i.e., on 2nd Nov., 2004 alongwith the return of income. A copy of the said letter has been placed as Annex. P3 to this petition. On 3rd Nov., 2004, the petitioner’s representative met the CIT-IV, Central Revenue Building, New Delhi and informed him that the return for the asst. yr. 2004-05 along with the covering letter dt. 1st Nov., 2004 was filed on 2nd Nov., 2004. A letter dt. 3rd Nov., 2004 was also sent to the said CIT for information and record. A copy of the same was marked to the Addl. CIT, Range XII, Central Revenue Building, New Delhi. We may point out that in the return of income, the petitioner had declared a loss of Rs. 2,74,83,730. This fact is recorded in the assessment order. The assessment order passed on 1st Dec., 2006, wherein it has been noted in the very first line that the assessee had filed his return of income declaring a loss of Rs. 2,74,83,730 on 2nd Nov., 2004. The assessment was completed and by virtue of the same, the petitioner was allowed to carry forward the loss amounting to Rs. 2,66,97,383.
Thereafter, the CIT-IV passed an order under s. 263 of the said Act and held that the assessment order was erroneous and prejudicial to the interest of the Revenue on the ground that the return had been filed late and there was no order under s. 119 of the said Act by the CBDT condoning the delay. The CIT observed that, although the assessee had contended that an application had been filed before the CBDT for condonation of the delay, no order under s. 119 of the said Act had been received till date. Subsequently, on 29th Oct., 2009, the order of the CBDT on the petitioner’s application under s. 119 for condonation of delay in filing of the return under s. 139(1)/139(3) of the said Act in respect of the asst. yr. 2004-05 was communicated to the petitioner. The order is a non-speaking one and it merely states as under : “After careful examination of the petition, as well as other related documents, your request for condonation of delay under s. 119 of the IT Act, 1961 is rejected.”
It is against this order that the petitioner has come up before this Court by way of a petition under Art. 226 of the Constitution of India seeking quashing of the same. It was contended by the learned counsel for the respondent that since this was a case of a loss return, there was no provision under law for condoning the delay in filing the return. The learned counsel for the respondent drew our attention to the provisions of s. 139(3), s. 80, s. 119 and, in particular, to s. 119(2)(b). She contended that there was no specific provision contained in s. 119(2)(b) which permitted the Board to condone the delay in filing a return and that the said provision only applied to applications or claims for exemption, deduction, refund or any other relief under the said Act.
We find that the very same contention was raised before the Karnataka High Court in the case of Associated Electro Ceramics vs. Chairman, CBDT & Anr. (1993) 201 ITR 501 (Kar). In that case, the Board had disposed of the application under s. 119(2) of the said Act taking the view that s. 119(2)(b) did not cover the case of a belated return on the basis of which loss, for the purposes of carrying forward the loss, had to be determined and that the matter was regulated by ss. 139, 72, 74 and 157. The view taken by the Board was that s. 119(2)(b) speaks of an ‘application’ or a ‘claim’ and not a ‘return’ to be filed beyond time. Consequently, the Board did not accede to the request of the petitioner for condoning the delay. The Karnataka High Court in the case of Associated Electro Ceramics (supra) examined the matter in detail and came to the conclusion that though the claim of carry forward of loss in the case of a loss return was not a claim regarding exemption, determination or refund referred to in s. 119(2)(b), it was definitely relatable to a claim arising under the category of any other relief available under the Act, as indicated in the said provision itself. The Court also held that the contention of the Department that if no power had been granted to an ITO or any other officer to condone the delay in making such a claim, the Board could also not extend time, was not correct. It also held that the provision expressly provided that where any timelimit had been fixed, such time-limit could be extended and the delay could be condoned by the Board. It rejected the finding of the Board that the application of claim referred to in s. 119(2)(b) did not cover a loss claim made in a return.
The learned counsel for the petitioner has also drawn our attention to Circular No. 8 of 2001, dt. 16th May, 2001 [(2001) 167 CTR (St) 92] which was with reference to the Board’s order under s. 119(2)(b), dt. 12th Oct., 1993 and Circular No. 670, dt. 26th Oct., 1993 [(1993) 115 CTR (St) 13] which laid down the procedure for condonation of delay in the case of belated claims of refund. In para 3 of the said Circular dt. 16th May, 2001, the decision of the Karnataka High Court in the case of Associated Electro Ceramics (supra) has been specifically noted. The said circular also notes the fact that as per the said decision, the Board had the power to condone the delay in cases having claims of carry forward of losses. It also notes that the Department did not file any SLP against the said order of the Karnataka High Court and subsequently the matter was taken up with the Ministry of Law which also agreed with the view that the Board had the power to condone the delay in filing the return under s. 119(2)(b) of the said Act in a case having a claim of carry forward of losses. The said Circular dt. 16th May, 2001 further clarified that the delay in making a refund claim as well as a claim of carry forward of losses, both could be condoned in cases where the returned income is a loss provided the other conditions are satisfied. In view of the foregoing, it is absolutely clear that the submissions sought to be raised before us by the learned counsel for the respondent have specifically and categorically been rejected by the Karnataka High Court and the same have been accepted not only by the Board, but also by the Ministry of Law. We notice that a similar view has also been taken by the Bombay High Court in the case of Sitaldas K. Motwani vs. Director General of IT (International Taxation) (2010) 228 CTR (Bom) 373 : (2010) 33 DTR (Bom) 222 : (2010) 187 Taxman 44 (Bom). Consequently, agreeing with the Karnataka High Court, we are of the view that the Board has the power under s. 119(2) to condone the delay in the case of a return which is filed late and where a claim for carry forward of losses is made.
8. Coming back to the facts of the present case, we find that the impugned order under s. 119 passed by the Board is a non-speaking one. Normally, we would have remanded the matter to the Board to consider the application of the petitioner afresh. However, we find that in the present case, the delay is only of one day and the circumstances have been explained and have not been controverted by the respondents. The fact of the matter is that the petitioner did reach the Central Revenue Building before the closure of the counter on 1st Nov., 2004. It is only because he was sent from one room to the other and had to wait in long queues that he could not present the return at the counter which was receiving the returns prior to 6.00 p.m. on that date. We feel that sufficient cause has been shown by the petitioner for the delay of one day in filing the return. If the delay is not condoned, it would cause genuine hardship to the petitioner. Thus, in the circumstances of this case, instead of remanding the matter back to the CBDT, we direct that the delay of one day in filing of the return be condoned. The writ petition is allowed. There shall be no order as to costs.
[Citation : 323 ITR 441]