The Principal Chief Commissioner of Income Tax must consider genuine hardship when evaluating applications for condonation of delay in filing returns under Section 119(2)(b), and arbitrary refusals undermine substantial justice.

JUDGMENT :

MURAHARI SRI RAMAN, J.

Challenging the legality and propriety of Order dated 13.06.2024 (Annexure-3) passed by the Principal Chief Commissioner of Income Tax, Odisha Region, refusing to condone the delay in furnishing return of income pertaining to the Assessment Years 2018-19 to 2022-23, exercising power under Section 119(2)(b) of the INCOME TAX ACT , 1961, the petitioner has approached this Court by filing this writ petition craving to invoke extraordinary jurisdiction under Article 226/227 of the Constitution of India with the following prayer(s):

“Under the above mentioned facts and in the circumstances of the present case, it is most respectfully prayed that this Hon'ble Court may be graciously pleased to admit this petition, call for and peruse the relevant records and after hearing, be pleased to:

(i) Issue Rule Nisi calling upon the opposite parties No.1 and 2 to show cause as to why Annexure-3 to the writ petition shall not be quashed and the opposite parties to show cause as to why appropriate directions shall not be issued to condone the delay and to allow the petitioner to file return of income along with audit report and to allow deductions/exemptions available to the petitioner's society;

(ii) And if the opposite parties fail to show cause or show insufficient cause, then make the rule absolute by quashing Annexure-3;

(iii) And further be pleased to pass such other order/orders, direction/directions, as this Hon'ble Court may deem just and proper under the facts and circumstances of the case, in the interest of justice;

And for this Act of kindness, the petitioner as in duty bound shall ever pray.”

Case of the petitioner:

2. The petitioner, a registered Co-operative Society incorporated on 13.08.1974 under the provisions of the Odisha Cooperative Societies Act, 1962 (for brevity, “OCS Act”), for promoting thrift, self-help and co- operation among the members, to raise funds to be lent out or invested for its members or extending thrift benefit, to borrow from members to be utilized for loan to the members for useful purposes and to do such other activities for the common benefit of its members as may be decided from time to time, requires its accounts to be audited by a Chartered Accountant/Firm of Chartered Accountants (Auditor) empanelled in the Directorate of Cooperative Audit, Odisha, Bhubaneswar as required under Section 62 of the OCS Act[ of the Odisha Cooperative Societies Act, 1962 stands as follows:

“Chapter—VIII Audit, Enquiry, Inspection and Surcharge

62. Audit.—

(1) (i) The Auditor-General shall audit, or cause to be audited by an Auditor duly authorised by him in that behalf, the accounts of every Society for each Co-operative year, and complete such audit within six months of the closure of the year, at least once or for such number of times as may be directed by the State Government from time to time in respect of any Society or class of Societies:

Provided that the Auditor-General of the Co-operative Societies, Orissa may engage one or more Chartered Accountants to cause the audit of the accounts of the Co-operative Society and the fees shall be paid by the Society both to the Chartered Accountant and the Government for the audit of its accounts for each Co-operative year at such rate as may be fixed by the Government.

(ii) The Auditor-General may, of his own motion or on a requisition from the Registrar and shall, on a directive from the State Government, arrange for special audit, re-audit or concurrent audit of the accounts of any Society or class of Societies on day-to-day or such other basis as may be dir