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2025 Supreme(Online)(Guj) 12840

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A. S. SUPEHIA, PRANAV TRIVEDI, JJ
RAJGREEN INFRALINK LLP – Appellant
Versus
THE PRINCIPAL COMMISSIONER OF INCOME TAX 1 SURAT – Respondent
19799 of 2023

Petitioner Advocates:MR B S SOPARKAR(6851) ,Respondent Advocate: KARAN G SANGHANI(7945)

A short delay in filing income tax return due to COVID-19 pandemic restrictions constitutes genuine hardship under Section 119(2)(b), and the authority must liberally consider such grounds, not rely on inapplicable circulars.

Headnote:(A) Income Tax Act, 1961 - Sections 119(2)(b), 80IBA, 139(1), 143(1) - Condonation of delay in filing return - Genuine hardship - COVID-19 pandemic - The authority must consider the reasons for delay liberally, especially when the delay is minimal and attributable to the pandemic - Circular No.09/2015 dated 09.06.2015, which pertains to belated refund claims and carry forward loss, is not applicable to a claim for deduction under Section 80IBA - The expression 'genuine hardship' is to be construed broadly to include restrictions on office capacity and access to documents during the pandemic. (Paras 10, 12)

(B) Administrative Law - Exercise of discretionary power - The authority must apply its mind to the specific grounds advanced by the assessee; failure to do so renders the order unsustainable - The mere possibility that the assessee would be entitled to a deduction cannot be a ground to reject the condonation application. (Para 13)

(C) Judicial Precedent - The decision in Vrushti Aulkumar Shah (Gujarat) held that a delay of 15 days in filing a return during the COVID-19 period ought to be condoned, and the same principle applies to a delay of 13 days. (Para 14)

Facts of the case:
The petitioner, a Limited Liability Partnership (LLP) engaged in real estate development, filed its return of income for Assessment Year 2021-22 on 28.03.2022, after the extended due date of 15.03.2022, resulting in a delay of 13 days. Consequently, the deduction under Section 80IBA of the Act was disallowed in the intimation under Section 143(1). The petitioner applied for condonation of delay under Section 119(2)(b) citing COVID-19 related restrictions, including lockdowns, limited office staff, and difficulty accessing bills and vouchers. The respondent rejected the application relying on Circular No.09/2015 and holding that no genuine hardship was made out.

Findings of Court:
The court found that Circular No.09/2015 was inapplicable as it dealt only with refund claims and carry forward losses. The reasons given by the petitioner - nationwide lockdown, 50% office capacity restrictions, and directives to provide food and shelter to labourers - constituted genuine hardship. The respondent failed to consider these grounds. The court set aside the impugned order and directed the respondent to reconsider the application in light of the observations within 12 weeks.

Issues: 1. Whether the rejection of condonation of delay under Section 119(2)(b) was proper when the delay was only 13 days and attributable to the COVID-19 pandemic. 2. Whether the authority correctly applied Circular No.09/2015. 3. Whether the reasons advanced by the petitioner amounted to 'genuine hardship'.

Ratio Decidendi: The court held that the expression 'genuine hardship' in Section 119(2)(b) must be interpreted liberally, especially during a pandemic. The authority is obligated to examine the specific reasons for delay and cannot mechanically reject an application based on inapplicable circulars or the mere possibility that the assessee may claim a deduction. A short delay occasioned by COVID-19 restrictions warrants condonation.

Result: Petition allowed. Impugned order dated 27.10.2023 quashed and set aside. The respondent shall reconsider the condonation application within 12 weeks in light of the court's observations.

ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)

1. RULE returnable forthwith. Learned Senior Standing Counsel Mr.Karan Sanghani for the respondent waives service of notice of rule on behalf of respondent.

2. By way of present petition, the petitioner has prayed for directions for setting aside the order dated 27.10.2023 rejecting the application of the petitioner for condonation of delay in filing the return of income for the Assessment Year- 2021-22 under the provisions of Section 119(2)(b) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’ for short).

3. The petitioner is a Limited Liability Partnership (LLP) engaged in the real estate development business in Surat. Due date of filing the Return of Income for Assessment Year (AY) 2021-22 under section 139(1) of the Act was 31.10.2021. Due to COVID-19 outbreak the same was extended to 15.03.2022 vide Notifications dated 20.05.2021, 09.09.2021 and 11.01.2022. The petitioner filed the return of income of AY 2021-22 on 28.03.2022 offering income at Rs.4,56,17,090/-.

3.1 As there was a delay in filing return of income, deduction of Rs.4,35,00,000/- under Section 80IBA of the Act was not allowed in the Intimation issued under section 143(1) of the Act dated 12.12.2022.

4. While placing reliance on the decisions of this Court in case of Jay Vijay Express Carriers vs. Commissioner of Income-Tax-III , [2013] 34 Taxmann.com 61 (Gujarat), Vrushti Aulkumar Shah vs. Principal Chief Commissioner of Income- tax, [2023] 152 taxmann.com 77 (Gujarat), Shailesh Vitthalbhai Patel vs. Chief Commissioner of Income-tax , [2022] 145 taxmann.com 10 (Gujarat), learned advocate Mr.B.S. Soparkar for the petitioner has submitted that looking to the restrains of the petitioner-Company during the COVID- 19 pandemic, the petitioner had filed return of income on 28.03.2022 after a mere delay of 13 days. It is submitted that the petitioner had categorically in its application mentioned various grounds, however, the same has been rejected by the impugned order by refusing the delay of 13 days. Further, learned advocate Mr.Soparkar, while referring to the findings recorded by the respondent authority in the impugned order, has submitted that the respondent authority has incorrectly placed reliance on Circular No.09/2015 dated 09.06.2015 for holding that he does not have any power to condone the delay. Thus, it is urged that the present petition may be allowed.

5. Per contra, learned Senior Standing Counsel Mr.Karan Sanghani for the respondent has submitted that it is true that the petitioner filed his return of income for AY 2021-22 on 28.03.2022, which is delayed by 13 days. However, it is submitted that in view of the prevailing COVID-19 pandemic, the date for filing of the return of income for the AY 2021-22 was extended to 15.03.2022 by the CBDT. However, the petitioner filed the return of income belatedly after a period of 13 days only when he realized that deduction would not be admissible under Section 80IBA of the Act.

6. While placing reliance on the judgment of the Delhi High Court in the case of Lava International Ltd. vs. Central Board of Direct taxes , [2024] 163 taxmann.com 148 (Delhi), it is urged that the writ petition may not be entertained as the respondents have precisely passed the order rejecting the application seeking condonation of delay.

7. We have heard learned advocates for the respective parties. Since short issue is involved, we have taken the matter for final disposal today.

8. The facts and the dates, as mentioned hereinabove of filing of return of income by the petitioner for AY 2021-22, on 28.03.2022, is not in dispute. It is also not in dispute that due to COVID-19 pandemic, the date of filing of the income tax return for AY 2021-22 under Section 139(1) of the Act was extended till 15.03.2022 from 31.10.2021.

9. Thus, the petitioner filed the return of income by delay of 13 days. Because of belatedly filing the return of income, the petitioner was denied th

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2025 Supreme(Online)(Guj) 12840

IN THE HIGH COURT OF GUJARAT AT AHMEDABADA. S. SUPEHIA, PRANAV TRIVEDI, JJRAJGREEN INFRALINK LLP – AppellantVersusTHE PRINCIPAL COMMISSIONER OF INCOME TAX 1 SURAT – Respondent19799 of 2023

A short delay in filing income tax return due to COVID-19 pandemic restrictions constitutes genuine hardship under Section 119(2)(b), and the authority must liberally consider such grounds, not rely on inapplicable circulars.

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
A. S. SUPEHIA, PRANAV TRIVEDI, JJ
RAJGREEN INFRALINK LLP – Appellant
Versus
THE PRINCIPAL COMMISSIONER OF INCOME TAX 1 SURAT – Respondent
19799 of 2023