Facts of the Case

  • The petitioner filed its Income Tax Return for AY 2013–14 declaring TDS of ₹15,62,500.
  • However, an additional TDS of ₹31,25,000 was not claimed due to oversight.
  • The return was processed under Section 143(1).
  • The limitation period for revising the return expired on 31.03.2015.
  • Upon discovering the omission, the petitioner filed an application on 12.09.2016 seeking condonation of delay.
  • The Commissioner rejected the application citing lack of evidence and negligence.

 Issues Involved

  1. Whether delay in claiming refund due to Chartered Accountant’s error can be condoned under Section 119(2)(b).
  2. Whether absence of documentary proof invalidates a bona fide claim of inadvertent omission.
  3. Whether tax authorities should adopt a liberal approach in refund matters.

Petitioner’s Arguments

  • The omission was purely inadvertent and caused by the Chartered Accountant.
  • The TDS amount was reflected on the Income Tax portal.
  • Denial of refund would cause unjust enrichment of the Revenue.
  • Relied on precedent:
    • Indglonal Investment & Finance Ltd. vs Income Tax Officer

Respondent’s Arguments

  • The petitioner failed to produce evidence substantiating the alleged mistake.
  • The assessee had sufficient time to revise the return but failed to act.
  • Professional assistance was already available, hence negligence cannot be excused.

Court’s Findings / Judgment

  • The Court held that:
    • The omission was bona fide and not deliberate.
    • It is unreasonable to expect concrete proof of an advisor’s inadvertent error.
    • No rational assessee would willingly forgo a substantial refund.
  • The Court emphasized that tax authorities must act as facilitators and not obstruct legitimate claims.
  • The rejection order was quashed.
  • Delay was condoned and the petitioner was allowed to file the refund claim.

Important Clarifications by Court

  • “Bona fide” must be interpreted contextually.
  • Refund provisions should be applied liberally and pragmatically.
  • Authorities should ensure fairness and avoid technical denial of legitimate claims.
  • Limitation laws should not defeat substantive justice when hardship is evident.

Sections Involved

  • Section 119(2)(b), Income Tax Act, 1961
  • Section 143(1), Income Tax Act, 1961
  • Refund provisions under Income Tax Act

Link to download the order -

https://delhihighcourt.nic.in/app/case_number_pdf/2019:DHC:494/SRB24012019CW84362018.pdf

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