Discretionary power to condone delays in tax filings must be exercised judiciously. Authorities should liberally interpret 'genuine hardship' when a taxpayer demonstrates 'reasonable cause,' such as medical incapacity, provided the evidence is robust and there is no intent to evade tax obligations.

ORDER :

1. Instant D.B. Civil Writ Petition is preferred by petitioner on the ground that the petitioner is entitled for condonation of delay under Section 119 (2)(b) of the Income Tax Act, 1961 for filing of ITR for assessment year 2024-25, but his application dated 05.02.2025 was rejected by the Principal Commissioner of Income Tax, Jaipur-1, on 02.09.2025.

2. Learned counsel for petitioner while referring the record has submitted that though petitioner is a partnership firm, having husband and wife as partners, and in last week of July, 2024, the main working partner was admitted for orthopedic surgery in Eternal Hospital and was under treatment for quite a sometime. He also submitted that the petitioner firm is entitled for refund of TDS deducted on work carried out by the petitioner firm and to claim said amount, the return was required to be filed by 31.12.2024 with penalty, but due to medical incapacity, the return could not be filed up to 31.12.2024 with penalty and petitioner has requested the competent authority to condone the delay on 05.02.2025, which was of 36 days, but same was rejected in mechanical manner. He further submitted that the Tax Authorities are empowered under various circulars issued by the Department for construing genuine hardships in liberal manner, but same has not been considered in liberal manner. He further submitted that the return was filed along with application within same financial year.

3. Aforesaid contentions were opposed by learned counsel appearing on behalf of respondents and he submitted that the reasons as assigned by the petitioner are not satisfactory and after taking note of the grounds as mentioned in the application, same was rightly dismissed by the Department.

4. Heard learned counsel for the parties and perused the material placed on record.

5. The respondents have relied upon circular dated 09.06.2015 issued by the Central Board of Direct Taxes (Annexure-6). The petitioner has also placed reliance upon circular dated 01.10.2024 (Annexure-7) for admitting an application or claim for refund and carry forward of loss and set off thereof under Section 119 (2)(b) of the Income Tax Act. The rejection order dated 02.09.2025 (Annexure-5) is also placed on record. The medical record of the working partner is also placed on record and we have considered the same.

6. Section 119 (2)(b) of the Income Tax Act is reproduced as under:-

"(b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise [any income-tax authority, not being a Commissioner (Appeals)] to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law;"

7. The CBDT issued a circular No.11/2024 on 01.10.2024 providing guidelines for handling application for condonation of delay under Section 119 (2)(b) for refund and loss claims. This circular allows Authorities to condone delay in filing returns relating to refund or carry forward loss, they are filed within 5 years from the end of relevant assessment year. The five years' time limit applies to claims filed on order after 01.10.2024.

8. When reviewing an application under Section 119(2)(b), the Authority must ensure that the delay was due to "reasonable cause" and that application is facing genuine hardship. In order to verify the merits of the claims, the Officer m