INCOME TAX ACT, 1961

Section 119(1)(b)

CBDT - Powers - Condonation of delay - Delay in filing revised return so as to claim refund and carry forward of losses -- Genuine hardship and circumstances beyond assessee's control

CBDT rejected assessee's application under section 119(2)(b) in the context of condonation of delay in filing refund claims and claim of carry forward of losses. On the ground that assessee had not been able to make out a case of genuine hardship and had not brought on record the circumstances beyond its control which led to delayed filing or revised return of income. Held: Assessee had produced contemporaneous evidence on record to show that it had in fact incurred the loss claimed by it during the year under consideration. Not being able to carry forward such loss, therefore, per se would cause hardship to assessee. The mere fact that now making a profit and might be in a position to bear loss did not mean that assessee would not suffer hardship. Evidently therefore, if time limit for filing revised return of income is not extended assessee would have to suffer from hardship as otherwise entire loss would not be permitted to be carried forward for being set off against profits of subsequent assessment years. Moreover, error committed while filing of original return of income did not come to assessee's notice till Chartered Accountants were changed. It was only after the income tax matters were handed over to another firm of Chartered Accountants, and the AR called for old records so as ascertain and substantiate the amount of brought forward losses available for set-off, it could be detected that though there was a book loss for assessment year 2009-10, and the return of income was filed declaring income at Nil without claiming carry forward of loss. Thus, it was because of circumstances beyond its control that assessee could not file return of income under section 139(9) within the specified time and accordingly, CBDT ought to have exercised powers under clause (b) of sub-section (1) of section 119 and condoned the delay in filing return of income. Therefore, impugned Order, passed by the CBDT under section 119(2)(b) was quashed.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2009-10

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