P. C.

1. The present Petition challenges an Order dated 7th August 2024 passed by Respondent No. 1, rejecting the Petitioner’s Application for condonation of delay in filing its return of income for the Assessment Year 2018-19. The Petitioner is also seeking appropriate directions/orders to get the delay of 5 months in the filing of the said return of income for the A.Y.2018-19 condoned.

2. For the impugned A.Y., the due date for filing a return of income, in which return an Assessee was returning a loss, under Section 139(3) read with Section 139(1) of the Income Tax Act, 1961 ( for short “the Act”) was 31st October 2018. The Petitioner, however, filed its return belatedly on 30th March 2019 within the time permissible under Section 139(4). Accordingly, the Petitioner on 15th June 2023, in light of Respondent No.1’s Circular No. 9 of 2015, filed an application for condonation of delay of 5 months under Section 119(2)(b) of the Act. This Application was filed by the Petitioner within the time stipulated in the said Circular, i.e. within a period of 6 years.

3. Respondent No. 1 refused to condone the delay on the following grounds :-

a. the Petitioner failed to exercise due diligence to ensure timely filing of its return of income ;

b. the Petitioner had ample time to ensure filing of its return of income within time ;

c. the delay is caused by the Petitioner’s lack of supervision and, hence, this does not constitute genuine hardship.

4. The case of the Petitioner is that the delay occurred because the Petitioner’s Chartered Accountant was not acquainted with the legal and accounting treatment to be given apropos the compensation received in the form of Transferable Development Rights (TDR) in lieu of compulsory acquisition of certain immoveable property and, accordingly, the Petitioner sought appropriate legal advice. The time taken for obtaining such views caused the delay in filing of the return. In the application filed by the Petitioner with Respondent No. 1, to the support of aforesaid contentions, the Petitioner, inter alia, filed an affidavit of the said Chartered Accountant, the legal opinions obtained and several judicial precedents in support of its contentions. The Petitioner states that various advices were obtained by it from May 2018 to March 2019, thereby establishing the substance, validity and bona fides of the claim of the Petitioner and its Chartered Accountant.

5. It is further contended by the Petitioner that if the delay is not condoned, then the Petitioner will suffer genuine hardship. It is stated that in the impugned year, the Petitioner had suffered a loss, and as per Section 80 of the Act, in order to carry forward the loss to the subsequent years in accordance with Section 72 of the Act, it is mandatory to file such a loss return of income in accordance with Section 139(3) of the Act, which in turn refers to the due date provided for in Section 139(1) of the Act. Accordingly, as the return of income was filed by the Petitioner beyond the due date of 31st October 2018, the Petitioner is deprived of claiming the carry forward losses suffered in A.Y. 2018-19 to the subsequent years as a result of the delay in filing of its return. This deprivation, according to the Petitioner, is causing hardship thereby, satisfying the pre-condition of Section 119(2)(b) of the Act. Therefore, it is submitted that the delay ought to be condoned so as to treat the Petitioner’s return of income for A.Y.2018-19 as within limitation period.

6. Further, the Petitioner also argues that it is otherwise a law abiding Assessee and generally files its return on time. The Writ Petition expressly avers that the Petitioner has filed its return of income since A.Y.2013-14 onwards, within time, save and except the current Assessment Year.

7. The learned Counsel for the Respondent, however, opposes the Petition and contends that the Petitioner was negligent and, hence, the delay ought not be condoned. He further submits that the various claim