MYELIN FOUNDRY PRIVATE LIMITED vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP/17704/2023HC KarnatakaKAHC01041406202328 October 2025Bench: S.R.KRISHNA KUMAR5 pages
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What did the High Court hold?

The High Court held that the respondents had adopted a hyper-technical approach in refusing to condone the delay. The Court found that the petitioner's inability to file the Return of Income within the prescribed period was due to non-compliance by the tax consultant and bonafide reasons, unavoidable circumstances, and sufficient cause, which constituted genuine hardship as contemplated in the relevant circular. The Court deemed it just and appropriate to adopt a justice-oriented approach, set aside the impugned order, and condone the delay in filing the returns. The operative directions were to allow the petition, set aside the impugned order, allow the application for condonation of delay, and direct the respondents to process the petitioner's income tax returns and proceed in accordance with law.

What were the facts?

The petitioner, Myelin Foundry Private Limited, sought to quash an order dated 12.06.2023 passed by the Central Board of Direct Taxes (CBDT) rejecting its application for condonation of a 90-day delay in filing its Return of Income for Assessment Year 2021-22. The petitioner contended that the delay was due to the Chief Operating Officer (COO) and the assisting accountant testing positive for Covid-19 in late January 2022. The COO also underwent knee surgeries in January and March 2022, requiring bed rest. The company had also engaged a tax consultancy firm, and the petitioner believed compliances were being handled. The application for condonation was filed on 13.06.2022. The respondents supported the impugned order.

What were the issues?

1. Whether the impugned order dated 12.06.2023, passed by the respondent No.1 (CBDT) under Section 119(2)(b) of the Income Tax Act, 1961, rejecting the petitioner's application for condonation of delay in filing the Return of Income for Assessment Year 2021-22, is liable to be quashed? Assessee's Contentions: The petitioner argued that the delay was caused by bonafide reasons, unavoidable circumstances, and sufficient cause, constituting genuine hardship. These included the Covid-19 diagnosis of key personnel (COO and accountant) and the COO's subsequent knee surgeries and advised bed rest. The petitioner also relied on the bonafide belief that the engaged tax consultancy firm would handle the necessary compliances. The respondents adopted a hyper-technical approach, failing to appreciate the genuine hardship faced by the petitioner. Revenue's Contentions: The learned counsel for the respondents supported the impugned order and submitted that the petition lacked merit and was liable to be dismissed.

Which sections of the Income-tax Act were involved?

Section 119(2)(b)

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:42967 WP No. 17704 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 28TH DAY OF OCTOBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 17704 OF 2023 (T-IT) BETWEEN:

MYELIN FOUNDRY PRIVATE LIMITED A COMPANY INCORPORATED UNDER THE COMPANIES ACT 2013, REPRESENTED BY ITS DIRECTOR, SRI GOPICHAND KATRAGADDA, AGED ABOUT 56 YEARS, A-202/203, MIRAYA ROSE, 2ND FLOOR, SIDDAPURA, WHITEFIELD BENGALURU – 560 006 PAN: AAMCM3796N …PETITIONER (BY SRI. MADHUSUDHAN U. A., ADVOCATE)

AND:

1.

THE CENTRAL BOARD OF DIRECT TAXES REPRESENTED THROUGH ITS CHAIRPERSON, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI – 110 001

2.

THE INCOME TAX OFFICER WARD 4(1)(3), 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BENGALURU – 560 095 …RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE)

THIS W.P. IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER DATED 12.06.2023 PASSED U/S 119(2)(B) OF THE INCOME TAX ACT, 1961

Digitally signed by CHANDANA B M Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:42967 WP No. 17704 of 2023

FOR THE ASSESSMENT YEAR 2021-22 BY THE RESPONDENT NO.1 HEREIN MARKED AS ANNEXURE-A AND ETC.,

THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner seeks quashing of the impugned order at Annexure – A dated 12.06.2023 passed by the respondent No.1, whereby the application filed by the petitioner under Section 119(2)(b) of the Income Tax Act, 1961 seeking condonation of delay of 90 days in filing Return of Income in relation to the Assessment Year 2021-22 was rejected by the respondent No.1.

2.

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. In addition to reiterating the various contentions urged in the memorandum of petition and referring to the material on record, learned counsel for the petitioner submits that in relation to the aforesaid Assessment Year 2021-22, the petitioner filed the application seeking condonation of delay of 90 days in filing Return of Income interalia contending that the management of the

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HC-KAR NC: 2025:KHC:42967 WP No. 17704 of 2023

petitioner – company had entrusted the responsibility to take care of the entire day to day compliance of the petitioner company to its Chief Operating Officer. The Chief Operating Officer was tested positive for Covid-19 on 29.01.2022 and the accountant, who was assisting the Chief Operating Officer was also tested positive on 27.01.2022. Further, petitioner submits that the Chief Operating Officer had undergone knee surgeries on 29.01.2022 and 06.03.2022 and was advised complete bed rest. The petitioner had engaged a tax consultancy company for the purpose of taking care of its taxation needs including filing of return of income and the petitioner was under the bonafide belief that the necessary compliances would have been taken care of by the company. It aggrieved by the fact that the return was not filed, petitioner filed condonation of delay application under Section 119(2)(b) of the Income Tax Act before respondent No.1 on 13.06.2022. Respondent No.1 without appreciating the submissions of the petitioner, rejected the condonation of delay application of the petitioner filed under Section 119(2)(b) of the I.T. Act, aggrieved, by which, the petitioner is before this Court, by way of the present petition.

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HC-KAR NC: 2025:KHC:42967 WP No. 17704 of 2023

4.

Per contra, learned counsel for the respondents- Revenue would support the impugned order and submits that there is no merit in the petition and the same is liable to be dismissed.

5.

A perusal of the impugned order will indicate that the respondents have adopted hyper technical approach in refusing to condone the delay without appreciating that the inability and omission on the part of the petitioner to file Returns of Income for the assessment year 2021-22 within the prescribed period was due to non-compliance on the part of the tax consultant of the petitioner as a result of which, the petitioner could not file the Returns of Income within the prescribed period. The respondents failed to appreciate that the petitioner could not file its Returns of Income within the prescribed period on account of bonafide reasons, unavoidable circumstances and sufficient cause, which clearly constituted genuine hardship on the part of the petitioner/assessee as contemplated in the said Circular dated 09.06.2015 and failure to appreciate this, has resulted in erroneous conclusion warranting interference by this Court in the present petition.

6.

Under these circumstances, adopting justice oriented approach and having regard to valid and sufficient ground pleaded

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HC-KAR NC: 2025:KHC:42967 WP No. 17704 of 2023

by the petitioner in support of his claim for condonation of delay, I deem it just and appropriate to set aside the impugned order and condone the delay in filing the returns by the petitioner by allowing the application filed by the petitioner. 7. In the result, I pass the following: O R D E R (i) The petition is hereby allowed. (ii) The impugned order at Annexure-A dated 12.06.2023, is hereby set-aside; (iii) The application dated 13.06.2022 filed by the petitioner for condonation of delay under Section 119(2)(b) of the Income Tax, Act, is hereby allowed and the delay stands condoned. (iv) The respondents are directed to process the income tax returns of the petitioner and proceed further in accordance with law.

Sd/- (S.R.KRISHNA KUMAR) JUDGE MDS; List No.: 2 Sl No.: 21

Retyped and replaced vide Court order dated 14.11.2025 Page No.6 deleted vide Court order dated: 14.11.2025

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