VEERAMACHIDEVA VIVIDHODDESHA vs. PRINCIPAL COMMISSIOHNER OF INCOME TAX

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WP/25607/2023HC KarnatakaKAHC01060340202313 February 2024Author: S.R.KRISHNA KUMAR5 pages
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What did the High Court hold?

The High Court allowed the petition. It held that the reasons provided by the petitioner for the delay in filing income tax returns for Assessment Year 2018-19 were sufficient to conclude that the omission and inability to file were due to bonafide reasons, unavoidable circumstances, and sufficient cause. The Court found that the petitioner, being a cooperative society, had made out valid and sufficient grounds amounting to genuine hardship. The Court observed that the impugned order indicated a hyper-technical approach by the PCIT, failing to appreciate that a cooperative society is entitled to a justice-oriented approach. Consequently, the impugned order was set aside, and the petitioner's application for condonation of delay was allowed. The petitioner was permitted to file its returns for AY 2018-19, which the respondent was directed to consider and proceed with in accordance with law.

What were the facts?

The petitioner, Veeromachideva Vividhoddesha Sahakari Sangha Niyamitha, a cooperative society, filed a writ petition before the High Court of Karnataka. The petition challenged an order dated May 19, 2023, passed by the Principal Commissioner of Income Tax (PCIT), respondent No. 1, under Section 119(2)(b) of the Income Tax Act, 1961. This order declined to condone the delay in filing the petitioner's income tax returns for the Assessment Year 2018-19. The petitioner sought to quash this order and requested a direction to condone the delay. The Income Tax Officer, Ward 1 Puttur, was the assessing officer.

What were the issues?

1. Whether the reasons stated by the petitioner for the delay in filing income tax returns for Assessment Year 2018-19 were bonafide, due to unavoidable circumstances, and constituted sufficient cause, thereby fulfilling the parameters stipulated in the Circular dated June 9, 2015, issued by the respondents, as required under Section 119(2)(b) of the Income Tax Act, 1961? Assessee's contentions: The petitioner argued that its application for condonation of delay under Section 119(2)(b) should have been allowed. They contended that the reasons provided in their affidavit for not filing returns within the prescribed period were bonafide, due to unavoidable circumstances and sufficient cause. They asserted that these reasons complied with the parameters of the Circular dated June 9, 2015, and that the respondent had erred in rejecting the application. The petitioner highlighted that it is a credit cooperative society in a rural area, serving local farmers, and that genuine hardship prevented timely filing. Revenue's contentions: The respondents supported the impugned order and submitted that the writ 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

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 13TH DAY OF FEBRUARY, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO.25607 OF 2023 (T-IT) BETWEEN:

VEERAMACHIDEVA VIVIDHODDESHA SAHAKARI SANGHA NIYAMITHA A COOPERATIVE SOCIETY REGISTERED UNDER THE KARNATAKA COOPERATIVE SOCIETY ACT 1959 REGISTERED ADDRESS AT LILLI COMPLEX, APMC ROAD, PUTTUR DAKSHINA KANNA DIST – 574 241 REP BY ITS CEO NISHANTH D SON OF SRI DEJAPPA MADIVALA AGED ABOUT 28 YEARS. …PETITIONER (BY SRI. SHREEHARI KUTSA., ADVOCATE) AND:

1.

PRINCIPAL COMMISSIONER OF INCOME TAX PCIT, PANAJI, GOA,

AAYKAR BHAVAN, PLOT NO.05, EDC COMPLEX, PATTO PLAZA, PANAJI GOA - 403 001 AN AUTHORITY UNDER THE INCOME TAX ACT, 1961.

2.

INCOME TAX OFFICER - WARD 1 PUTTUR THE ASESSING OFFICER UNDER THE INCOME TAX OFFICE, RADHIKA COMPLEX COURT ROAD, PUTTUR – 574 201. …RESPONDENTS (BY SRI.M. DILIP., ADVOCATE)

THIS W.P IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER UNDER SECTION 119(2)(b) OF THE INCOME TAX ACT, 1961 DATED 19/05/2023 ISSUED BY THE R1 FOR THE ASSESSMENT YEAR 2018-

Digitally signed by VANDANA S Location: HIGH COURT OF KARNATAKA

WHICH BEARS THE DIN VIZ., ITBA/COM/M/17/2023- 24/1054725506(1) WHICH IS ENCLOSED AS ANNEXURE-K AND ETC.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER

In this petition, petitioner seeks quashing of the impugned order dated 19.05.2023 passed under Section 119(2)(b) of the Income Tax Act, 1961 (for short, the ‘IT Act’) by respondent No.1 for the Assessment Year 2018-19, whereby respondent No.1 declined to condone the delay in filing the returns of income for the said assessment year and for a direction to the respondents to condone the delay in filing the returns of income and for other reliefs.

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 invited my attention to the application filed by the petitioner under Section 119(2)(b) of the IT Act seeking condonation of delay in filing returns of income for the Assessment Year 2018-19 and the affidavit accompanying the

same in order to point out that the petitioner is a Credit Co- operative Society situated in rural area with the management and members of the petitioner – Society consisting of local farmers to whom the petitioner is providing credit facilities. It is submitted that due to bonafide reasons, unavoidable circumstances and sufficient cause as narrated in the affidavit in support of the application, it was not possible for the petitioner to file the I.T. returns within the prescribed period and the respondents have committed an error in rejecting the application without appreciating that the reasons stated by the petitioner comply with and fulfill the parameters stipulated in the Circular dated 09.06.2015 issued by the respondents and consequently, the impugned order deserves to be set aside and the delay on the part of the petitioner in filing the returns deserves to be condoned.

4.

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

5.

As rightly contended by learned counsel for the petitioner, a perusal of the reasons stated / given by the petitioner in not filing the income tax returns within the prescribed period are

sufficient to come to the conclusion that the omission and inability on the part of the petitioner to file the income tax returns was due to bonafide reasons, unavoidable circumstances and sufficient cause. Further, petitioner being a Co-operative Society, valid and sufficient grounds amounting to genuine hardship on the part of the petitioner – Society to file the returns within the prescribed time had been made out by the petitioner to seek condonation of delay. In this context, the impugned order indicates that respondent No.1 has adopted a hyper-technical approach without appreciating that the petitioner being a Co-operative Society would be entitled to justice oriented approach and as such, the impugned order deserves to be set aside and application filed by the petitioner deserves to be allowed.

6.

In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The impugned order dated 19.05.2023 vide Annexure-K passed by the respondent is hereby set aside. (iii) The application dated 09.06.2022 filed by the petitioner under Section 119(2)(b) of the

Income Tax Act for the assessment year 2018-19 is hereby allowed; and (iv) The petitioner is permitted to file returns for the said assessment year i.e., 2018-19, which shall be considered by the respondent, who shall proceed further in accordance with law.

Sd/- JUDGE

SV List No.: 2 Sl No.: 57

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