SHREE MASNANGAI SOUHARDA vs. THE PR. COMMISSIONER OF INCOME TAX

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WP/104318/2023HC KarnatakaKAHC02005318202327 September 2024Author: JYOTI MULIMANI4 pages
AI SummaryAllowed

What did the High Court hold?

The High Court allowed the writ petition. The Court found that the issue revolved around a nominal delay of eleven days in filing the return, which was beyond the assessee's control. The Court opined that the delay ought to have been condoned by the respondent but was not. Consequently, the order dated February 22, 2023, rejecting the delay condonation application, was set aside. The nominal delay of 11 days was condoned. The Court issued a Writ of Certiorari, quashing the order dated February 22, 2023. The ratio decidendi is that nominal delays beyond the assessee's control in filing income tax returns, especially when claiming deductions under Section 80P, should be condoned by the revenue authorities, and the High Court can intervene under its writ jurisdiction if such condonation is wrongly refused.

What were the facts?

The petitioner, Shree Masnangal Souharda Credit Sahakari Niyamit, a society registered under the Karnataka Souharda Sahakari Act, 1997, engaged in accepting deposits and disbursing loans to its members, sought a deduction under Section 80P of the Income Tax Act, 1961. For Assessment Year 2022-23, the society filed its income tax return on November 18, 2022, eleven days beyond the due date of November 7, 2022, due to genuine reasons. The society applied under Section 119(2)(b) of the Act to condone this delay. The Principal Commissioner of Income Tax rejected the condonation application on February 22, 2023. Aggrieved, the society filed a writ petition before the High Court of Karnataka, Dharwad Bench.

What were the issues?

1. Whether the High Court, under Articles 226 and 227 of the Constitution of India, can interfere with the rejection of a delay condonation application filed under Section 119(2)(b) of the Income Tax Act, 1961, when the delay was nominal and beyond the assessee's control? Assessee's contention: The delay of eleven days in filing the income tax return was beyond the assessee's control and therefore, the Writ Petition should be allowed. Reliance was placed on the decision in Kanyakaparmeshwari Co-operative Society Limited vs. Chief Commissioner of Income-Tax (W.P.No.22423/2024, disposed of on 21.08.2024). Revenue's contention: The action of the department was justified, and the Writ Petition is devoid of merits and may be dismissed.

Which sections of the Income-tax Act were involved?

Section 80P,Section 119(2)(b)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 27TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MS. JUSTICE JYOTI MULIMANI WRIT PETITION NO. 104318 OF 2023 (T-IT) BETWEEN:

SHREE MASNANGAI SOUHARDA CREDIT SAHAKARI NIYAMIT, CHALAVENATTI, TQ: DIST: BELGAUM-591 143, BY ITS DIRECTOR, MR. PIRAJI BHOMANI PATIL, AGE: 64 YEARS, OCC: DIRECTOR, R/O: SHREE MASNANGAI SOUHARDA CREDIT SAHAKARI NIYAMIT, CHALAVENATTI, TQ: AND DIST: BELAGAVI-591 143. …PETITIONER (BY SRI. SANGRAM.S.KULKARNI AND SRI. PRAMOD VAIDYA., ADVOCATES)

AND:

1.

THE PR. COMMISSIONER OF INCOME TAX, C.R. BUILDING, NAVA NAGAR, HUBBALLI-580 025.

2.

INCOME TAX OFFICER-WARD-1, BELAGAVI, FOROZ KHIMJIBAI COMPLEX, OPP. CIVIL HOSPITAL, BELAGAVI-590 001. …RESPONDENTS (BY SRI. M.THIRUMALESH AND MIS. ROOPA ANAVEKAR., ADVOCATES)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA, SEEKING CERTAIN RELIEFS.

Digitally signed by THEJASKUMAR N Location: HIGH COURT OF KARNATAKA

THIS WRIT PETITION IS LISTED FOR PRELIMINARY HEARING IN ‘B’ GROUP, THIS DAY, AN ORDER IS MADE AS UNDER: ORAL ORDER Sri.Sangram S.Kulkarni., counsel for the petitioner and Ms.Roopa Anavekar., counsel for the respondent have appeared in person. Sri.M.Thirumalesh., counsel for the respondent has appeared through video conferencing. 2. The short facts are these: Shree Masnangal Souharda Credit Sahakari Niyamit is a Society registered under the Karnataka Souharda Sahakari Act, 1997 and is engaged in accepting deposits from its members and disbursing loans to them. The income of the society is entitled to deduction under Section 80 P of the Income Tax Act, 1961. The society has been filing its income tax returns regularly within the due date. Due to genuine reasons, the society filed its income tax returns for the Assessment Year 2022-23 on 18.11.2022, beyond the due date of 07.11.2022. However, the income of the Society was eligible for deduction under Section 80P of the Act and the same was claimed under

the return of income filed delayed by eleven days on 18.11.2022. Hence, the petitioner applied under Section 119(2)(b) of the Act to condone the nominal delay of eleven days in filing the return of income for the Assessment Year 2022-23. The respondent vide order dated 22.02.2023 rejected the delay condonation application. Hence, the petitioner has filed the captioned Writ Petition under Articles 226 and 227 of the Constitution of India on several grounds as set out in the Memorandum of Writ Petition. 3. Counsel Sri.Sangram S.Kulkarni., in presenting his arguments submits that the delay in filing the income tax returns was beyond the assessee’s control. Counsel, therefore, submits that the Writ Petition may be allowed. Counsel placed reliance on the decision in KANYAKAPARAMESHWARI CO- OPERATIVE SOCIETY LIMITED VS. CHIEF COMMISSIONER OF INCOME-TAX – W.P.No.22423/2024 disposed of on 21.08.2024. By way of reply, counsel Sri.M.Thirumalesh., justified the action of the department. He submits that the Writ Petition is devoid of merits and the same may be dismissed.

4.

Heard the arguments and perused the Writ papers with utmost care. 5. The issue revolves around a narrow compass and relates to a delay. Suffice it to note that the petitioner filed the return of income and there was a nominal delay of eleven days and the delay was beyond the assessee’s control. In my view, the delay ought to have been condoned by the respondent but the same has not been done. Hence, the order dated 22.02.2023 is liable to be set aside, and so it is set aside. The nominal delay of 11 days is condoned. 6. The Writ of Certiorari is ordered. The order dated 22.02.2023 passed by the respondent in DIN & Order No: ITBA/COM/F/17/2022-23/1049992997(1) for the Assessment Year 2022-23 vide Annexure-A is quashed. 7. Resultantly, the Writ Petition is disposed of.

Sd/- (JYOTI MULIMANI) JUDGE TKN LIST NO.: 1 SL NO.: 56

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