Neumec Builders Private Limited vs. The Central Board of Direct Taxes

944-WPL-30260-2024.DOC S.R.JOSHI IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L)NO.30260 OF 2024

M/s. Neumec Builders Pvt. Ltd., … Petitioners Versus The Central Board of Direct Taxes, New Delhi & Others …Respondents Mr. Gunjan Kakkad i/b. Mint and Confreres, for the Petitioners. Mr. Manoj Shirsat, for the Respondents. _______________________ CORAM: G. S. KULKARNI & FIRDOSH P. POONIWALLA, JJ. DATED: 8th OCTOBER, 2024 _______________________ ORAL JUDGEMENT (Per G.S. KULKARNI, J.)

This Petition, under Article 226 of the Constitution of India, is filed praying that the delay of two days in filing the Return of Income for Assessment Year 2021-22 be directed to be condoned in the peculiar facts and circumstances of the case. Although the Petitioner had made an application for condonatoin of delay on 13th August, 2022, despite repeated reminders, the same has not been decided by the Assessing Officer/Respondent No.5. 2 The learned Counsel for the Petitioner has brought to our notice that the period for filing of the Return of Income for the Assessment Year in question was extended up to 15th March, 2022. He submits that the Return of Income was filed on 17th March, 2022, there being a delay of two days due to various reasons which were beyond the control of the Petitioner as also its Chartered Accountant. He states that Form 10-IC was filed on 24th March, 2022 also in respect of which delay is required to be condoned, considering the facts of the present case. SMITA RAJNIKANT JOSHI SMITA RAJNIKANT JOSHI Date: 2024.10.15 14:53:47 +0530 CNR No : HCBM020302672024 2024:BHC-OS:16345-DB

944-WPL-30260-2024.DOC 3 In so far as the reason for delay, as contended by the Petitioner is concerned, it is submitted that the Chartered Accountant had made efforts to file Return of Income and Form 10-IC within the prescribed time limit, however, due to technical difficulties on the Income Tax Portal, the same could not be filed. A screen shot of the technical issues faced by the Chartered Accountant in filing of Form 10-IC was placed for consideration of the Assessing Officer along with the delay condonation application. It is contended that the Chartered Accountant had made a grievance setting out that sufficient efforts were made to file Form 10-IC, however, despite best efforts, the Form could not be uploaded. Such grievance application was filed by the Chartered Accountant on behalf of the Petitioner on 22nd March, 2022. 4 Our attention is also brought to a significant aspect which was also placed for consideration of the Assessing Officer, i.e., on 10th March, 2022, at the office premises of the Chartered Accountant, as incident of fire took place leading to stoppage of electricity supply to the entire building. Learned Counsel for the Petitioner has submitted that the office staff of the Chartered Accountant had lodged a complaint with Adani Electricity, [the electricity suppliers]. A copy of the compliant was also placed for the consideration of the Assessing Officer. It is submitted that the Chartered Accountant has a data base, and due to sudden electricity stoppage, the entire computer system, including the server, was required to be shut down . It is submitted that after the computer system was restarted, the Chartered Accountant tried to operate his computer system, however, the problems faced by the server led to further delay. The Chartered Accountant could resume the work only after the computer server was fully repaired. A copy of the Affidavit of the Chartered Accountant was also submitted to the Assessing Officer along with the delay condonation application. It is in these circumstances the Petitioner, by its 944-WPL-30260-2024.DOC Application dated 13th August, 2022, sought condonation of delay of two days in filing the Return of Income and Form 10-IC. 5 In support of his contentions, the learned Counsel for the Petitioner has also drawn our attention to Circular No.19 of 2023 (F No.173/32/2022-ITA-I) dated 23rd October, 2023 issued under Section 119, read with Section 115 BAA of the Income Tax Act, 1961 and Rule 21AE of the Income Tax Rules, 1962, which issues instructions to the subordinate authorities on condonation of delay in filing Form 10-IC for the A Y 2021- 2022, and, more particularly, to Clause 3 thereof. Clause 3 (iii) provides that the delay in filing Form 10-IC be condoned where Form 10-IC is filed electronically on or before 31st January, 2024 or 3 months from the end of the month in which the Circular is issued, whichever is later. It is submitted that, although in the present case, the delay is of two days in filing of the Return, however, since the Petitioner had filed its Form 10 IC on 22nd February, 2022, the Petitioner was entitled to the benefit of Clause 3 (iii) of the said Circular in condoning the delay for filing Form 10-IC. 6 The learned Counsel for the Petitioner has also brought to our attention a decision of this Court in Jyotsna M. Mehta v/s. Principal Commissioner of Income Tax1 , wherein, in the context of Section 119 of the Income Tax Act, 1961, and accepting the case of the Petitioner praying for condonation of delay, the Court had made an elaborate observation that a bonafide delay on the part of the Chartered Accountant in filing Return could not be a ground to reject the application for condonation of delay. In that case, the Court considered the facts which prevented the Chartered Accountant from filing the Return of the Petitioner, and such bonafide reasons were accepted by the Court to be sufficient ground for condoning the 1(2024) 166 taxmann.com 442 (Bombay) 944-WPL-30260-2024.DOC delay. The relevant observations in that regard are required to be noted. Paragraphs 6, 7 and 8 of the said observations are read thus:- “6. In our opinion, the approach of PCIT appears to be quite mechanical, who ought to have been more sensitive to the cause which was brought before him when the petitioner prayed for condonation of delay. In such context, we may observe that it can never be that technicalities and rigidity of rules of law would not recognize genuine human problems of such nature, which may prevent a person from achieving such compliances. It is to cater to such situations the legislature has made a provision conferring a power to condone delay. These are all human issues and which may prevent the assessee who is otherwise diligent in filing returns, within the prescribed time. We may also observe that the PCIT is not consistent in the reasons when the cause which the petitioners has urged in their application for condonation of delay was common.