SHRI VIVEK KRISHNAMOORTHY vs. THE PRINCIPAL COMMISSIONER OF INCOME TAX

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WP/16991/2023HC KarnatakaKAHC01039661202302 November 2023Author: B M SHYAM PRASAD7 pages
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What did the High Court hold?

The High Court held that the impugned order passed by the Principal Commissioner of Income Tax cannot be sustained. The Court agreed with the petitioner's submission that the six-year period for condonation under Section 119(2)(b) of the Income Tax Act should be computed from the date the belated Income Tax Return was filed, not from the date of the application for condonation. The Court found the reasoning of the Kerala High Court in K C Antony v. The Principal Commissioner and Others persuasive. Therefore, the petitioner's application for condonation of delay in filing the ITR for AY 2013-14 was restored for reconsideration. The Principal Commissioner was directed to consider the application within one month from the date of receipt of a certified copy of the order, taking into account the reasons offered by the petitioner for the delay between March 31, 2015, and August 22, 2015. The amount of Rs. 2,05,870/- sought as refund was not directly addressed in this order, as the primary focus was on the condonation of delay.

What were the facts?

The petitioner, Shri Vivek Krishnamoorthy, filed a writ petition before the High Court of Karnataka challenging an order dated May 29, 2023, passed by the Principal Commissioner of Income Tax. This order rejected the petitioner's application under Section 119(2)(b) of the Income Tax Act, 1961, for condonation of delay in filing his Income Tax Return (ITR) for Assessment Year (AY) 2013-14. The ITR was due by March 31, 2015, but was filed on August 22, 2015, a delay of approximately five months. The petitioner sought condonation of this delay via an application filed on November 15, 2021. The Commissioner rejected the application, citing negligence and the fact that the condonation sought was beyond six years from the due date.

What were the issues?

1. Whether the Principal Commissioner of Income Tax erred in rejecting the petitioner's application for condonation of delay in filing the Income Tax Return for AY 2013-14, under Section 119(2)(b) of the Income Tax Act, 1961, by considering the six-year period from the date of the application rather than the date of filing the belated return? Assessee's Contentions: - The petitioner argued that the delay in filing the ITR for AY 2013-14 was approximately five months (from March 31, 2015, to August 22, 2015). - The petitioner contended that the Principal Commissioner incorrectly calculated the six-year period for condonation based on the date of the application (November 15, 2021) instead of the date the belated ITR was filed (August 22, 2015), contrary to Circular No. 9/2015. - Reliance was placed on the decision of the High Court of Kerala in K C Antony v. The Principal Commissioner and Others. Revenue's Contentions: - The judgment records that the learned counsel for the respondent (Revenue) was heard in light of the petitioner's contentions and upon perusal of a prior order dated November 17, 2022.

Which sections of the Income-tax Act were involved?

Section 119(2)(b),Section 139

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 2ND DAY OF NOVEMBER, 2023 BEFORE THE HON'BLE MR JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 16991 OF 2023 (T-IT) BETWEEN:

SHRI VIVEK KRISHNAMOORTHY S/O S. KRISHNAMOORTHY, AGED ABOUT 45 YEARS, RESIDING AT A-303, ROHAN MIHIRA APARTMENT, A.E.C.S. LAYOUT, CHINNAPPANAHALLI, BANGALORE-560037. …PETITIONER (BY SMT. RADHA R.,ADVOCATE) AND:

1.

THE PRINCIPAL COMMISSIONER OF INCOME TAX BANGALORE - 3, C.R.BUILDING (CENTRAL REVENUE) NO-1, QUEEN'S ROAD, BANGALORE-560051.

2.

THE INCOME TAX OFFICER CIRCLE-5(3)(1), NO-57 HMT BHAVAN, BELLAY ROAD, GANGANAGAR EXTENSION, BANGALORE-560032.

…RESPONDENTS (BY SRI.DILIP M., ADVOCATE)

Digitally signed by NARASIMHA MURTHY VANAMALA Location: HIGH COURT OF KARNATAKA

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER PASSED BY THE R-1 UNDER ANNX-A DATED 29.5.2023, DIN AND ORDER NO.ITBA/COM/F/17/2023- 24/1053267375(1) AND IN TURN; DIRECT THE R-2 TO REFUND A SUM OF RS.2,05,870/- (TWO LAKHS AND FIVE THOUSAND EIGHT HUNDRED SEVENTY ONLY) ANNEXURE -D ALONG WITH INTEREST DUE PERTAINING TO THE A.Y 2013-14 IN ACCORDANCE WITH LAW.

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

The petitioner aggrieved by the first respondent’s order dated 29.05.2023 in No. ITBA/ COM/F/17/2023-24/1053267375(1) [Annexure-A]. The first respondent by this order has rejected the petitioner’s application under Section 119[2][b] of the Income Tax Act, 1961 [for short, ‘IT Act’] refusing to condone the delay in filing Income Tax Returns [ITR] for the assessment year 2013-14. The first respondent has assigned the following reasons:

“The reason for non-filing of the ITR stated by the assessee is due to avoidable situations. However, it is seen that this is case of negligence. The assessee has also made application for condonation for AY beyond 6 years. No case of any reasonable cause or genuine hardship has been made out by the assessee. The condonation assessee seeking beyond the period of 6 years. Hence, the application of the assessee deserves to be rejected.”

2.

Smt. Radha R, the learned counsel for the petitioner submits that it would be indisputable that for the assessment year 2013-14, the petitioner had to file ITR before 31.03.2015 but the ITR is filed on 22.08.2015, and because ITR was belated by about five moths i.e., between 31.03.2015 and 22.08.2015, an application is filed on 15.11.2021 under Section 119(2)(b) of the IT Act for condonation of delay in filing the ITR.

3.

Smt. Radha R further submits that the first respondent has reckoned the delay between the date of last date for filing the ITR and the date of the application, but even according to the terms of the Circular No.9/2015 which is relied upon by the first respondent, the period of six years will have to be computed as of the date when the belated ITR is filed. In support of this proposition, learned counsel for the petitioner relies upon the decision of the High Court of Kerala at Ernakulam in K C Antony v. The Principal Commissioner and Others1.

4.

Sri M Dilip, the learned counsel for the respondent, is heard in the light of these contentions and upon perusal of the aforesaid Order dated 17.11.2022. The High Court of Kerala, in very similar circumstances, has opined that the delay to be condoned is to be considered as of the date on which ITR is filed and not on the date on which the

1 WP [C] No.1311/2021 DD – 17.11.2022

application is filed and the provisions of Section 119[2][b] of the IT Act would not impose any limitation for the purposes of filing an application for condonation of delay. The High Court of Kerala has opined thus: “I am of the view that the 1st respondent completely misdirected himself in law while holding that Ext.P5 application of the petitioner for condonation of delay ought to be rejected as it was filed beyond the period specified in the Circular of the Board, referred to above. It cannot be disputed and it is clear from a reading of the provisions of Section 119(2)(b) that the delay to be condoned is the delay in making 'the application' for refund. 'The application for refund', in this case is the return which was not processed as it was filed beyond the time specified in Section 139 of the Act. Therefore, the delay to be condoned was not to be considered with reference to the date on which the application under Section 119(2)(b) was filed, but with reference to the date on which the

'application for refund' (here in this case the return of income) was filed. Section 119(2)(b) does not impose any limitation for the purposes of filing an application for condonation of delay.”

5.

This Court, in the light of this proposition, which is very persuasive must opine that the impugned order cannot be sustained and the petitioner’s application for condonation of delay in filing the ITR on 22.08.2015 must be restored for consideration in the light of the reasons offered to explain the delay between 31.03.2015 and 22.08.2015 and with the directions to so consider the application within a reasonable period from the date of receipt of a certified copy of this order. Hence, the following: ORDER

[a] The petition is allowed in part, and the first respondent’s impugned order dated 29.05.2023 in No. ITBA/COM/F/17/2023

-24/1053267375(1) [Annexure-A] quashed. The petitioner’s application for condonation of delay is restored for reconsideration in the light of this Court’s observation. [b] The first respondent shall consider the petitioner’s application as aforesaid within a period of one [1] month from the date of receipt of a certified copy of this order.

Sd/- JUDGE

AN/-

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