Facts of the Case

The present appeal was filed by the assessee, Sudipta Basu, challenging the order dated 23rd December 2021 passed by the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2018–19. The dispute arose due to disallowance of a loss amounting to ₹8,67,803 pertaining to Assessment Year 2017–18.

The assessee had filed the Income Tax Return (ITR) on 22nd January 2018, whereas the due date for filing the return was 05th August 2017, resulting in a delay of approximately four months and sixteen days.

The delay, according to the assessee, occurred due to circumstances beyond his control.

Issues Involved

  1. Whether the ITAT erred in disallowing the loss claimed by the assessee due to delayed filing of return under Section 139 of the Income Tax Act, 1961.
  2. Whether the delay in filing the return could be condoned by the ITAT.
  3. Whether the assessee was entitled to a liberal interpretation of Section 139 considering genuine hardship.

Petitioner’s Arguments

  • The assessee contended that the ITAT failed to adopt a liberal interpretation of Section 139 of the Income Tax Act, 1961.
  • It was argued that the delay in filing the return occurred due to circumstances beyond the assessee’s control.
  • The petitioner relied upon an order dated 09th November 2015 passed by the Metropolitan Magistrate, Vasant Kunj, New Delhi, to substantiate the claim of hardship.
  • It was emphasized that the delay was not intentional and therefore the loss should not have been disallowed.

Respondent’s Arguments

  • The Revenue contended that the return of income was filed beyond the prescribed due date.
  • It was argued that as per the statutory framework, losses cannot be allowed if the return is not filed within the stipulated time.
  • The Revenue supported the findings of the ITAT and maintained that the Tribunal had correctly applied the law.

Court Order / Findings

  • The Hon’ble Delhi High Court held that Section 119(2)(b) of the Income Tax Act, 1961, read with CBDT Circular No. 9/2015, provides a specific remedy to assessees seeking condonation of delay in filing returns due to genuine hardship.
  • The Court observed that the authority to condone such delay lies with the Central Board of Direct Taxes (CBDT) and not with the ITAT.
  • It was held that the ITAT had correctly concluded that it lacked jurisdiction to condone the delay.
  • The Court further held that no substantial question of law arose in the present case.

Accordingly, the appeal was dismissed.

Important Clarification

  • The power to condone delay in filing Income Tax Returns is not vested with the ITAT.
  • Assessees must approach the CBDT under Section 119(2)(b) in cases involving genuine hardship.
  • Filing returns beyond due dates has direct consequences on claim of losses unless condonation is granted through proper statutory mechanism.

Sections Involved

  • Section 139 – Filing of Income Tax Return
  • Section 119(2)(b) – Power of CBDT to condone delay in certain cases
  • CBDT Circular No. 9/2015 – Guidelines for condonation of delay

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:2944-DB/MMH03082022ITA2442022_194229.pdf

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