M/S BEAVER MARKETING SOLUTIONS P LTD vs. INCOME TAX OFFIER

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WP/6318/2023HC KarnatakaKAHC01014465202327 February 2025Bench: S.G.PANDIT7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court set aside the order dated 02.12.2022 passed by the Principal Chief Commissioner of Income Tax, which rejected the petitioner's application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961. The Court found that the reasons stated by the petitioner, such as moving to their native place due to the pandemic and experiencing medical problems, warranted a liberal consideration, especially given the widespread hardship during the pandemic. The Court held that the authorities should be liberal in considering grounds related to pandemic-induced hardship. Consequently, the matter was remanded back to the second respondent (Principal Chief Commissioner) for fresh consideration. The petitioner was granted liberty to furnish any supporting documents within two weeks, after which the second respondent was directed to pass an appropriate order in accordance with law. The writ petition was disposed of with these directions.

What were the facts?

M/s. Beaver Marketing Solutions P. Ltd. (the petitioner) filed a writ petition challenging an order dated 02.12.2022 passed by the Principal Chief Commissioner of Income Tax (the second respondent). This order rejected the petitioner's application filed under Section 119(2)(b) of the Income Tax Act, 1961, seeking condonation of delay in filing its Income Tax Return for the Assessment Year 2021-22. The petitioner had filed its return on 22.08.2022, along with the condonation application. The petitioner contended that due to COVID-19 related issues, including employee unavailability and medical problems leading to relocation to native places, they could not file the return within the prescribed or extended due dates. The revenue argued that the petitioner failed to establish genuine hardship as required by Section 119(2)(b).

What were the issues?

1. Whether the order passed by the Principal Chief Commissioner of Income Tax rejecting the petitioner's application for condonation of delay in filing the Income Tax Return for AY 2021-22 under Section 119(2)(b) of the Income Tax Act, 1961, is a speaking order and has considered the reasons for delay provided by the petitioner? Assessee's Contentions: - The impugned order is non-speaking and lacks proper reasons for refusal. - The reasons provided by the petitioner for delay, including employee unavailability due to COVID-19 and medical issues leading to relocation, were not considered. - The delay was caused by genuine hardship due to the pandemic. Revenue's Contentions: - The petitioner failed to file the return within the prescribed or extended time, even after multiple extensions granted due to COVID-19. - The petitioner has not established genuine hardship as mandated by Section 119(2)(b) of the Income Tax Act, 1961. - The rejection of the application by the Principal Chief Commissioner was justified.

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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NC: 2025:KHC:8625 WP No. 6318 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 27TH DAY OF FEBRUARY, 2025 BEFORE THE HON'BLE MR JUSTICE S.G.PANDIT WRIT PETITION NO. 6318 OF 2023 (T-IT) BETWEEN:

M/S. BEAVER MARKETING SOLUTIONS P. LTD., BEARING 1289, 3RD FLOOR, 7TH CROSS, 5TH MAIN, HSR LAYOUT, SECTOR-7 BANGALORE-560102 PAN-AAGCB534Q. A Y 2021-22 REGISTERED COMPANY REP. BY CEO BRIJESH PANDEY. …PETITIONER (BY SRI. TARSEM CHAND GUPTA, ADV.)

AND:

1.

INCOME TAX OFFICER WARD-1(1)(1) BMTC BUILDING KORAMANGALA BANGALORE-560095.

2.

PR. CHIEF COMMISSIONER OF INCOME TAX KARNATAKA AND GOA REGION QUEENS ROAD BANGALORE-560001. …RESPONDENTS (BY SRI.SUSHAL TIWARI, ADV. AND SRI E.I. SANMATHI, ADV.)

THIS PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO IN VIEW OF THE FACTS AND GROUNDS ENUMERATED ABOVE IT IS MOST

Digitally signed by MARIGANGAIAH PREMAKUMARI Location: HIGH COURT OF KARNATAKA

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NC: 2025:KHC:8625 WP No. 6318 of 2023

RESPECTFULLY PRAYED THAT ORDER NO.ITBA/COM/F/17/ 2022-23/1047773207(1) DATED 02.12.2022 ANNX-A PASSED BY THE PR.CCIT MAY KINDLY BE QUASHED AND SET ASIDE, THE WRIT PETITION MAY KINDLY BE ALLOWED AS PRAYED, DIRECTING THE RESPONDENTS TO GRANT SANCTION FOR ISSUE OF THE REFUND, ALONG WITH INTEREST U/S 244A FROM THE DATE OF THE APPLICATION.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR JUSTICE S.G.PANDIT

ORAL ORDER

The petitioner, a registered Private Limited Company is before this Court under Article 226 of the Constitution of India, questioning Annexure-A order bearing No. ITBA/COM/F/17/2022-23/1047773207(1) dated 02.12.2022, rejecting petitioner’s application filed under Section 119(2)(b) of the Income Tax Act, 1961 (for short “1961 Act”) refusing to condone the delay in filing Income Tax Returns for the assessment year 2021-22.

2.

Heard Sri.Tarsem Chand Gupta, learned counsel for the petitioner and Sri.Sushal Tiwari and Sri.E.I.Sanmathi,

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NC: 2025:KHC:8625 WP No. 6318 of 2023

learned counsels for respondents-Revenue. Perused the writ petition papers.

3.

Learned counsel for the petitioner would submit that for the assessment year 2021-22, the petitioner filed return of income on 22.08.2022 along with an application under Section 119(2)(b) of 1961 Act with a request to accept the return of income by condoning the delay. Learned counsel would submit that the second respondent under the impugned order refused to condone the delay and consequently refused to accept the return of income for the assessment year 2021-22 without assigning proper reasons. Further, he would submit that the impugned order of refusing to condone the delay is a non-speaking order and he submits that reasons mentioned in the application of the petitioner for condonation of delay is not considered by the second respondent. Learned counsel for the petitioner would submit that due to COVID-19, employees of the petitioner-Company were not available, as such, the petitioner could not file return of income for

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NC: 2025:KHC:8625 WP No. 6318 of 2023

the assessment year 2021-22 in time. Further, he submits that though time to file return of income was extended up to 15.03.2022, for non-availability of staff, the petitioner could not file returns. He submits that the said reason of the petitioner is not taken note of by the second respondent and the second respondent proceeded only on the basis that the petitioner has not made out case of genuine hardship and dismissed the application for condonation of delay. Therefore, he prays for allowing the writ petition.

4.

Per contra, learned counsel Sri.Sanmathi for respondents would submit that the petitioner failed to file return of income within the prescribed time or during the extended period. He submits that, taking note of the COVID period, time to file returns was extended thrice from 30.11.2021 to 15.02.2022 and finally to 15.03.2022, even then the petitioner failed to file return of income within the extended time. Learned counsel would submit that the petitioner has not established genuine hardship as

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NC: 2025:KHC:8625 WP No. 6318 of 2023

required under Section 119(2)(b) of 1961 Act. Therefore he would submit that the second respondent is justified in rejecting the application of the petitioner filed for condonation of delay under Section 119(2)(b) of 1961 Act. Thus, he prays for dismissal of the writ petition.

5.

The facts are admitted. The petitioner failed to file return of income for the assessment year 2021-22 within the prescribed time or extended time i.e., up to 15.03.2022. The petitioner admittedly submitted return of income along with an application for condonation of delay in filing return of income which indicates that due to medical problems and as they had moved to their native place due to pandemic, they could not file return of income within the prescribed or extended time.

6.

Under Section 119 of 1961 Act, the delay could be condoned if the assessee makes out that the condonation of delay sought is in respect of genuine claim and if condonation of delay is refused, the assessee would suffer genuine hardship. In the instant case, the reasons stated

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NC: 2025:KHC:8625 WP No. 6318 of 2023

by the petitioner-Private Limited Company is that they had moved to their native place due to pandemic and they were also suffering from medical problems. During pandemic, every person has suffered and when the hardship during pandemic period is pleaded, the Authorities shall be liberal in considering such grounds. In the above fact situation, I deem it appropriate to set aside the order at Annexure-A, rejecting the application filed by the petitioner under Section 119(2)(b) of 1961 Act, remanding the matter to the second respondent to consider afresh, with liberty to the petitioner to place on record the documents if any, in support of its contention.

7.

Hence, the following order: Annexure-A bearing No.ITBA/COM/F/17/2022- 23/1047773207(1) dated 02.12.2022 for the assessment year 2021-22 is set aside and the matter is remitted back to the second respondent for fresh consideration and to pass orders in accordance with law.

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NC: 2025:KHC:8625 WP No. 6318 of 2023

The petitioner is at liberty to furnish documents, if any, within two weeks. Thereafter, the second respondent shall proceed to pass appropriate order in accordance with law. With the above, the writ petition stands disposed of.

SD/- (S.G.PANDIT) JUDGE

MPK CT:bms List No.: 1 Sl No.: 51

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