Liberal interpretation should be made on what constitutes ‘genuine

Liberal interpretation should be made on what constitutes ‘genuine hardship’ for condoning delay in filing ITR: Bombay HC

Facts:

1. The Assessee had received compensation pursuant to Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 (RFCTLARR Act) as a consideration for a compulsory acquisition of his land.

2. The Assessee filed his ITR offering the said compensation to tax and the return was processed u/s. 143(1) of the Income Tax Act.

3. The Asessee then became aware that the said compensation was not chargeable to income tax pursuant to section 96 of RFCTLARR Act. Unfortunately, the time limit to file revised ITR had expired.

4. So, the Assessee made an application for condoning the delay and leave to furnish revised ITR u/s. 119(2)(b) of the Income Tax Act.

5. The application was rejected on the ground that the assessee had not spelled as to what was the ‘genuine hardship’ on account of which there was a delay.

Hon Bombay HC held as below:

1. The phrase ‘genuine hardship’ used in Section 119(2)(b) of the Act should be considered liberally. The power to condone the delay has been conferred to enable the department to do substantial justice to the parties by disposing the matters on merits.

2. There cannot be a straight jacket formula to determine as to what was the genuine hardship. The fact that an assessee feels that he had paid more tax than what he was liable to pay would certainly cause hardship and that will be certainly a ‘genuine hardship.

3. Refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against that, if the dely is condoned, the highest that could happen is that the matter would be decided on merits after hearing the parties.

4. The delay in filing revised return should therefore be condoned.