The court ruled that 'genuine hardship' should be construed liberally in tax law for condonation of delays, promoting substantial justice, especially when no liability exists.

ORDER :

PRANAV TRIVEDI, J.

Heard learned advocate Mr. Ashish Goyal for Mr. Jayvir Gadhavi for the petitioner and learned Senior Standing Counsel Mr. Varun K. Patel for the respondent.

2. By this petition under Article 226/227 of the Constitution of India, the petitioner has challenged the order dated 02.11.2023 passed by the respondent – Commissioner of Income Tax, (IT & PT), Ahmedabad under Section 119(2) (b) of the INCOME TAX ACT , 1961 (for short “the Act”) whereby the application filed by the petitioner for condonation of delay in filing the Return of Income for the Assessment Year 2022-23 is rejected.

3. The brief facts which has led to filing of the present are as under :

3.1. The petitioner is a non-resident of India residing in United State of America (USA) . He has not filed any return under the provisions of the Act since last 22 years. However during the Assessment Year 2022-23, the petitioner sold the residential flat jointly owned with his spouse for Rs.29,50,000/-. As per the provisions of Section 195 of the Act, the Tax was Deducted at Source(TDS) at Rs.6,88,911/-. The Tax Deducted at Source was at gross value, being sale consideration and the expenses and cost of acquisition were ignored.

3.2. It is the case of the petitioner that when he computed his tax liability, it amounted to ‘NIL’. Therefore, there was refund of Rs.6,88,911/-. The petitioner being a non-resident was under the impression that no Return of Income was required to be filed as per the provisions of the Act as there was no tax liability. When the legitimate refund was not received by the petitioner, he thought it fit to file return claiming return at the time of his visit to India. However, the petitioner was not aware that Section 139(4) of the Act as amended, restricted the filing of belated returns upto three months prior to the end of the relevant Assessment Year. Therefore, as per the provisions of Section 139(4)of the Act, the petitioner was required to file his return of Assessment Year till 31.12.2022. When the petitioner came to India in September, 2023, it was brought to his notice by the Tax Consultant that he would not be in a position to file return for the Assessment Year, 2022-23 in September, 2023 since the same has become invalid as per the provisions of Section 139(4) of the Act.

3.3. In such circumstances and with a view to file return and claim refund of excess Tax Deducted at Source, the petitioner filed an application under Section 119(2)(b) of the Act before the Commissioner of Income Tax (IT & TP), Ahmedabad on 21.06.2023. It is the case of the petitioner that along with the application, he had also annexed Form 26AS, computation of income, passport etc. On 11.10.2023, notice was sent electronically by the respondent directing the petitioner to furnish written submissions till 19.12.2023.

3.4. It is the case of the petitioner that he was in USA at the time of issuance of notice and was suffering from Covid-19. Therefore he was not in a position to give reply to the notice. To show his bona fide of suffering from Covid-19 during that interregnum period, the petitioner has annexed his medical report of USA. However, without affording any opportunity, the respondent by way of an ex-parte order dismissed the application preferred by the petitioner. In such circumstances, the petitioner preferred review/rectification application before the respondent on 29.11.2023 which was accompanied by the affidavit and medical certificates. However, the respondent dismissed the application preferred by the petitioner vide order dated 14.12.2023 stating that there is no provisions with regard to the review/rectificati