Court emphasized that 'genuine hardship' in tax compliance should be assessed liberally, especially when unforeseen employee turnover disrupts timely filings.

ORDER :

1. Aggrieved by refusal to condone the delay in filing return of income for the Assessment Year 2024-25 vide order dated 18.08.2025 under Section 119(2)(b) of the Income Tax Act, 1961 (for short, 'I.T. Act') by the Principal Commissioner of Income Tax, Bhubaneswar-I (for short 'PCIT') - opposite party No.2, the instant writ petition has been filed under Articles 226 and 227 of Constitution of India.

2. Having place of business at a remote village, Nizigarh in the district of Jajpur, the petitioner-company faced much hurdles on account of resignation tendered by the employees, who were handling accounts and income tax related compliances with quick succession, the petitioner could not furnish return for the Assessment Year 2024-25 within the period stipulated. However, after joining of the newly appointed employee, enclosing audited accounts along with all necessary particulars, return could be submitted. The petitioner filed a petition for condonation of delay explaining therein the hardship faced by the company and showed its bona fide.

2.1. In response to such petition for condonation of delay, the petitioner was asked to furnish certain documents by letter dated 11.03.2025 which was duly responded to on 18.03.2025. Pursuant to further notice dated 16.07.2025 calling for clarification with regard to condonation of delay in filing return issued by the PCIT, the petitioner submitted a detailed reply enclosing copies of resignation letters of the employees who joined in the office but left within short span, the details of such fact is reproduced herein below:

2.2 It was also apprised before the said authority concerned that an affidavit affirming such fact had already been submitted for consideration. The petitioner prayed that unless the delay is condoned and the income tax return is not accepted, the petitioner could not be a position to claim refund of Rs.9,69,072/- and availed the benefit of carry forward loss to the tune of Rs.63,00,773/- in the subsequent Assessment Years, which may lead to immeasurable loss and would cause serious prejudice.

2.3. Citing judgments rendered in B.M. Malani Vs. CIT [2008] 174 Taxman 363/306 ITR 196 (SC), Sitaldas K.Motwani Vs. DGIT [2010] 187 Taxman 44/323 ITR 223 (Bom.), Pankaj Kailash Agarwal Vs. Asstt. CIT [2024] 161 taxmann.com 383 and drawing attention to Circular No.7/2023 [F. No. 312/63/2023-0T], dated 31.07.2023 and Circular No.11/2024 [F. No. 312163/2023- 0T], dated 01.10.2024 issued by the Central Board of Direct Taxes, the petitioner prayed for condonation of delay taking into account the explanation proffered showing “sufficient cause” and “genuine hardship” faced by the petitioner at the relevant point of time. However, the PCIT observing that had the the audit report been made ready, the same could have been furnished before the Jurisdictional Assessing Officer even without the aid and assistance of the employee to establish genuine hardship. Having not done so, he considered the explanation so offered as not plausible and, thereby rejected the petition for condonation of delay under Section 119(2)(b) of I.T. Act.

2.4. The present writ petition is filed challenging the propriety, legality and legal justification of rejection of petition for condonation of delay.

3. Ms. Kananbala Roy Choudhury, learned Advocate appearing for the petitioner-company submitted that the factual details were furnished before the PCIT clearly