Facts of the Case

The Petitioner, an NRI residing in the UK, received compensation on account of the accidental death of his wife during the Financial Year 2017–18. The compensation included interest, on which TDS was deducted and reflected through Form 16A. However, the TDS was not initially reflected in Form 26AS.

Due to this discrepancy, the Petitioner was unable to file his Income Tax Return within the prescribed time for Assessment Year 2018–19. After the TDS details were updated in March 2020, the Petitioner filed an application under Section 119(2)(b) seeking condonation of delay.

The Respondent authority rejected the application and additionally held that the claim was not genuine, effectively deciding the matter on merits.

Issues Involved

  1. Whether delay in filing ITR due to non-reflection of TDS in Form 26AS can be condoned under Section 119(2)(b)?
  2. Whether the tax authority exceeded its jurisdiction by deciding the merits while considering condonation of delay?
  3. Whether rejection without proper reasoning violates principles of natural justice?

Petitioner’s Arguments

  • The delay occurred due to non-reflection of TDS in Form 26AS, which was beyond the Petitioner’s control.
  • The Respondents failed to consider genuine hardship while rejecting the application.
  • The authority exceeded jurisdiction by adjudicating the merits of the claim instead of limiting itself to condonation of delay.
  • No proper opportunity of hearing was granted before rejecting the application.

Respondent’s Arguments

  • The Respondents rejected the condonation application and held that the claim of the Petitioner was not genuine.
  • It was implied that the delay and claim did not warrant relief under Section 119(2)(b).

Court’s Findings / Judgment

  • The Court observed that the application for condonation of delay was rejected without providing any reasons, making the order unsustainable.
  • It held that the Respondents exceeded their jurisdiction by deciding the merits of the case while dealing with condonation of delay.
  • The authority effectively passed an assessment-like order without granting the Petitioner an opportunity to be heard.
  • Such action was held to be contrary to law and violative of principles of natural justice.

Court Order

  • The impugned order dated 23 August 2021 was set aside.
  • Delay in filing the ITR for AY 2018–19 was condoned.
  • The Assessing Officer was directed to:
    • Consider the matter on merits,
    • Pass a reasoned order,
    • Provide opportunity of hearing to the Petitioner.

Important Clarification by Court

  • While deciding an application under Section 119(2)(b), authorities cannot adjudicate the merits of the claim.
  • Condonation proceedings must be confined strictly to examining genuine hardship and delay, not tax liability.
  • Any decision affecting rights must comply with principles of natural justice.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:380-DB/MMH31012022CW18192022_221657.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.