Full Judgment Text
2023:BHC-AS:39929-DB
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 15544 OF 2023
Optra Health Private Limited …Petitioner
Versus
Additional Commissioner of Income Tax (HQ),
Pune & Ors. …Respondents
Mr. Sham Walve i/b Mr. Abhishek Khandelwal for Petitioner.
Mr. Suresh Kumar for Respondents-Revenue.
CORAM: K. R. SHRIRAM &
DR. NEELA GOKHALE, JJ.
th
DATED: 19 December 2023
PC:-
1. Petitioner filed return of income for Assessment Year (“AY”)
th
2017-2018 on 25 November 2017 in the name of Optra
Technologies Private Limited. By that date, the name of Petitioner
had already been changed with the approval and sanction of the
st
Ministry of Corporate Affairs vide communication dated 31 January
2017. The PAN number reflected in the income-tax return filed by
assessee for the relevant AY was correctly mentioned. On account of
a mismatch between the PAN number reflected in the income-tax
th
return and the name of the company, a communication dated 29
May 2018 came to be issued by the Deputy Commissioner of Income
Tax (“DCIT”), Centralised Processing Centre (“CPC”), Bangalore
asking Petitioner to rectify the defects within a period of fifteen days
from the date of receipt of such a communication. As Petitioner did
not do the needful within the prescribed time, the income-tax return
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filed by Petitioner (assessee) was declared to be invalid.
2. In order to overcome this difficulty, an application under
Section 119 of the Income Tax Act, 1961 (“the Act”) was filed by
Petitioner before the Principal Commissioner of Income Tax (“PCIT”)-
th
2, Pune, which came to be rejected by an order dated 9 September
2021 passed by the Principal Chief Commissioner of Income Tax
(“PCCIT”), Pune.
3. Against the order, Petitioner filed a Writ Petition being Writ
Petition No. 88661 of 2022 impugning the order passed by the PCCIT
and one of the primary grounds raised was Petitioner’s application
came to be rejected without even giving a personal hearing. This
rd
Court was pleased to dispose the petition vide its order dated 3
th
October 2022 by quashing and setting aside the order dated 9
September 2021 and remanding the matter for de-novo
consideration.
4. The matter was considered de-novo by the PCCIT, who again
rejected Petitioner’s application for condonation of delay under
Section 119(2)(b) of the Act. The reason for rejection is contained in
paragraph 6 of the impugned order, which reads as under :
“6. Contention of the AR was duly considered.
Communication by email is an established and legally accepted
and sufficient mode of communication. A company being
artificial judicial person, is always represented by an individual
to discharge its legal and other obligations. The argument that
the company's CFO was irregular in his duties and hence the
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company could not discharge its legal obligation, is not an
acceptable view. If such an argument is permitted, the
companies can get away from very serious obligations too.
Based on facts of the case, it is observed that the applicant has
failed to prove any genuine hardship, which was beyond it's
control, with necessary evidence.”
5. Mr. Suresh Kumar wanted time to file an affidavit-in-reply. In
our view, no purpose will be served by filing a reply because the
impugned order speaks for itself. Moreover, the petition was served
in early November 2023 and the department had almost six weeks to
file a reply if they really wanted to oppose the petition.
6. We are not happy with the reason given in the impugned order
rejecting Petitioner’s application for condonation of delay.
7. Petitioner’s explanation for not meeting with the time
prescribed for correcting the mismatch is that, the first notice of
invalid return under Section 139(9) of the Act was sent on registered
th
email-ID of one Mr. Prasad Sathe on 30 May 2018 and the final
th
notice of invalid return dated 19 June 2018 under Section 139(9) of
the Act was also sent on the email-ID of Mr. Prasad Sathe. Mr. Prasad
Sathe was the Chief Operating Officer leading Petitioner’s Pune office
operation and was heading Human Resources, Finance, Information
Technologies and Operation teams. He was also responsible for
statutory compliance of the company. All responsibilities of
complying with statutory provisions were entrusted to Mr. Prasad
Sathe. Mr. Prasad Sathe did not deliver despite the responsibility
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given to him. Mr. Prasad Sathe left the organization with effect from
th
7 March 2019. Prior to leaving the office, he was irregular in
attending work due to his personal issues. As the notices issued
under Section 139(9) of the Act were sent on Mr. Prasad Sathe’s
official ID, none of the other members of the company had any access
to the same. Admittedly, no physical copy of notice was sent to
company’s registered address. All this came to light when the new
team including one Mr. Kapil Bhakre (Director) and Mr. Dinesh Pande
(Director-Finance), found out the error during the finalization of
accounts for AY 2018-2019 and immediately took remedial action by
th
submitting an application dated 5 November 2019 to the office of
the DCIT, Circle-3, Pune. Petitioner immediately provided details
about the invalid return and requested him to activate the action on
the Income Tax Portal so as to enable Petitioner to rectify the return
of income for AY 2017-2018. It is stated that Petitioner would also
get a refund of Rs. 13,09,230/- and only wanted to rectify the invalid
return and comply with the Rules as per the Act. It is stated that
th
Petitioner had filed the return for AY 2017-2018 on 25 November
2017 within the deadline prescribed under the Act. The Audit Report
th
under Section 44AB of the Act was also filed on 25 November 2017.
So also, Form 3CEB reporting international transactions was filed. In
short, Petitioner has acted as a prudent assessee and carried out all
compliances on time. Petitioner declared income of Rs. 73,77,136/-
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for AY 2017-2018 and determined tax payable of Rs. 11,57,086/-.
Petitioner had even deposited Rs. 24 lakhs as advance tax during
Financial Year 2016-2017 pertaining to AY 2017-2018. Therefore,
Petitioner has always acted as a prudent assessee with the only error
being Petitioner did not use the changed name in the income-tax
returns.
8. In view of this background, it is obvious that the error for the
mismatch was not caused due to any deliberate or culpable
negligence or any mala-fides on the part of Petitioner.
9. While considering the genuine hardship, the PCCIT was not
expected to consider a solitary ground as to whether the assessee was
prevented by any substantial cause from filing the corrections within
a due time. Other factors also ought to have been taken into account.
The phrase “genuine hardship” used in Section 119(2)(b) of the Act
should have been construed liberally. The Legislature has conferred
the power to condone the delay to enable the authorities to do
substantial justice to the parties by disposing the matters on merits.
The expression ‘genuine’ has received a liberal meaning in view of the
law laid down by the Apex Court and while considering this aspect,
the authorities are expected to bear in mind that ordinarily the
applicant, applying for condonation of delay, does not stand to
benefit by lodging erroneous returns. Refusing to condone the delay
can result in a meritorious matter being thrown out at the very
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threshold and cause of justice being defeated. As against this, when
delay is condoned, the highest that can happen is that a cause would
be decided on merits after hearing the parties. When substantial
justice and technical considerations are pitted against each other,
cause of substantial justice deserves to be preferred, for the other side
cannot claim to have vested right in injustice being done because of a
non-deliberate action. There is no presumption that a delay in
correcting an error or responding to a notice of invalid return
received under Section 139(9) of the Act is occasioned deliberately or
on account of culpable negligence or on account of mala-fides . A
litigant does not stand to benefit by resorting to delay. In fact, he
runs a serious risk. The approach of authority should be justice-
oriented so as to advance cause of justice. If the case of an applicant
is genuine, mere delay should not defeat the claim. We find support
for this view in Sitaldas K. Motwani v. Director General of Income-tax
1
(International Taxation), New Delhi , relied upon by Mr. Walve,
where paragraph nos. 13 to 17 read as under :
“13. Having heard both the parties, we must observe that
while considering the genuine hardship, Respondent No. 1 was
not expected to consider a solitary ground so as to whether the
petitioner was prevented by any substantial cause from filing
return within due time. Other factors detailed hereinbelow
ought to have been taken into account.
14. The Apex Court, in the case of B.M. Malani v. CIT
[2008] 10 SCC 617, has explained the term "genuine" in
following words:
“16. The term ‘genuine’ as per the New Collins
Concise English Dictionary is defined as under :
1. 2010 (87) taxman.com 44 (Bombay).
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‘Genuine’ means not fake or counterfeit, real, not
pretending (not bogus or merely a ruse)’.
17.
18. The ingredients of genuine hardship must be
determined keeping in view the dictionary meaning
thereof and the legal conspectus attending thereto. For
the said purpose, another well-known principle,
namely, a person cannot take advantage of his own
wrong, may also have to be borne in mind.....” (p. 624).
The Gujarat High Court in the case of Gujarat Electric Co. Ltd.
(supra) was pleased to hold as under:
“... The Board was not justified in rejecting the claim
for refund on the ground that a case of genuine
hardship was not made out by the petitioner and delay
in claiming the relief was not satisfactorily explained,
more particularly when the returns could not be filed in
time due to the ill health of the officer who was looking
after the taxation matters of the petitioner....” (p. 737).
The Madras High Court in the case of R. Seshammal (P.) Ltd.
(supra), was pleased to observe as under:
“This is hardly the manner in which the State is
expected to deal with the citizens, who in their anxiety
to comply with all the requirements of the Act pay
monies as advance tax to the State, even though the
monies were not actually required to be paid by them
and thereafter, seek refund of the monies so paid by
mistake after the proceedings under the Act are
dropped by the authorities concerned. The State is not
entitled to plead the hypertechnical plea of limitation in
such a situation to avoid return of the amounts. Section
119 of the Act vests ample power in the Board to
render justice in such a situation. The Board has acted
arbitrarily in rejecting the petitioner's request for
refund.” (p.187)
15. The phrase “genuine hardship” used in section 119(2)
(b) should have been construed liberally even when the
petitioner has complied with all the conditions mentioned in
Circular dated 12-10-1993. The Legislature has conferred the
power to condone delay to enable the authorities to do
substantive justice to the parties by disposing of the matters on
merit. The expression “genuine” has received a liberal meaning
in view of the law laid down by the Apex Court referred to
hereinabove and while considering this aspect, the authorities
are expected to bare in mind that ordinarily the applicant,
applying for condonation of delay does not stand to benefit by
lodging its claim late. Refusing to condone delay can result in a
meritorious matter being thrown out at the very threshold and
cause of justice being defeated. As against this, when delay is
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condoned the highest that can happen is that a cause would be
decided on merits after hearing the parties. When substantial
justice and technical considerations are pitted against each
other, cause of substantial justice deserves to be preferred for
the other side cannot claim to have vested right in injustice
being done because of a non-deliberate delay. There is no
presumption that delay is occasioned deliberately, or on
account of culpable negligence, or on account of mala fides. A
litigant does not stand to benefit by resorting to delay. In fact
he runs a serious risk. The approach of the authorities should
be justice-oriented so as to advance cause of justice. If refund is
legitimately due to the applicant, mere delay should not defeat
the claim for refund.
16. Whether the refund claim is correct and genuine, the
authority must satisfy itself that the applicant has a prima facie
correct and genuine claim, does not mean that the authority
should examine the merits of the refund claim closely and
come to a conclusion that the applicant's claim is bound to
succeed. This would amount to prejudging the case on merits.
All that the authority has to see is that on the face of it the
person applying for refund after condonation of delay has a
case which needs consideration and which is not bound to fail
by virtue of some apparent defect. At this stage, the authority is
not expected to go deep into the niceties of law. While
determining whether refund claim is correct and genuine, the
relevant consideration is whether on the evidence led, it was
possible to arrive at the conclusion in question and not whether
that was the only conclusion which could be arrived at on that
evidence.
17. Having said so, turning to the facts of the matter giving
rise to the present petition, we are satisfied that respondent
No. 1 did not consider the prayer for condonation of delay in
its proper perspective. As such, it needs consideration afresh.”
10. This was followed by this Court in Artist Tree (P.) Ltd. v. Central
2
Board of Direct Taxes , relied upon by Mr. Walve, where paragraph
nos. 19, 21 and 23 read as under :
“ 19. The circumstance that the accounts were duly audited way
back on 14 September 1997, is not a circumstance that can be
held against the petitioner. This circumstance, on the contrary
adds force to the explanation furnished by the petitioner that the
delay in filing of returns was only on account of misplacement or
the TDS Certificates, which the petitioner was advised, has to be
necessarily filed alongwith the Return of Income in view of the
provisions contained in Section 139 of the said Act read
alongwith Income Tax Rules, 1962 and in particular the report in
2. [2014] 52 taxmann.com 152 (Bombay)
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the prescribed Forms of Return of Income then in vogue which
required an assessee to attach the TDS Certificates for the refund
being claimed. The explanation furnished is that on account of
shifting of registered office, it is possible that TDS Certificates
which may have been addressed to the earlier office, got
misplaced. There is nothing counterfeit or bogus in the
explanation offered. It cannot be said that the petitioner has
obtained any undue advantage out of delay in filing of Income
Tax Returns. As observed in case of Sitaldas K. Motwani (supra),
there is no presumption that delay is occasioned deliberately or
on account of culpable negligence or on account of mala fides. It
cannot be said that in this case the petitioner has benefited by
resorting to delay. In any case when substantial justice and
technical consideration are pitted against each other, the cause of
substantial justice deserves to prevail without in any manner
doing violence to the language of the Act.
21. We find that the impugned order dated 16 May 2006 of the
CBDT also seeks to reject the application for condonation of
delay on account of delay from the date of filing the Return of
Income, i.e., 14 September 1999 upto 30 April 2002. This was
not the ground mentioned in notice dated 7 February 2006 given
to the petitioner by the CBDT for rejecting the application for
condonation of delay. Thus the petitioner had no occasion to
meet the same. It appears to be an afterthought. However, as
pointed out in paragraph 20 hereinabove, the delay in filing of
an application if not coupled with some rights being created in
favour of others, should not by itself lead to rejection of the
application. This is ofcourse upon the Court being satisfied that
there were good and sufficient reasons for the delay on the part
of the applicant.
23. In light of the aforesaid discussion, we are of the opinion
that an acceptable explanation was offered by the petitioner and
a case of genuine hardship was made out. The refusal by the
CBDT to condone the delay was a result of adoption of an unduly
restrictive approach. The CBDT appears to have proceeded on
the basis that the delay was deliberate, when from explanation
offered by the petitioner, it is clear that the delay was neither
deliberate, nor on account of culpable negligence or any mala
fides. Therefore, the impugned order dated 16 May 2006 made
by the CBDT refusing to condone the delay in filing the Return of
Income for the Assessment Year 1997-98 is liable to be set aside.
Consistent with the provisions of Section 119(2)(b) of the said
Act, the concerned I.T.O. or the Assessing Officer would have to
consider the Return of Income and deal with the same on merits
and in accordance with law.”
11. In the circumstances, having considered the averments in the
petition, we are satisfied that the delay in not responding to the
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notice is received under Section 139(9) of the Act, was neither
deliberate nor on account of culpable negligence or any mala-fides .
The issue is only of correcting the name of Petitioner in the returns so
that there is no mismatch between the PAN number and name of the
company.
12. We, therefore, direct Respondents to permit Petitioner to
correct its name in the returns for AY 2017-2018 from ‘Optra
Technologies Private Limited’ to ‘Optra Health Private Limited’.
Therefore, we hereby quash and set aside the impugned order dated
rd
23 December 2022. Within two weeks of this order being uploaded,
the required portal will be opened for Petitioner to do the needful,
under advice to Petitioner.
13. We hasten to add that we have not examined the contents of
the returns filed by Petitioner or claims which have been made in the
returns. That will be subject of appropriate assessments/proceedings
under the Act.
14. Petition disposed. No order as to costs.
(DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)
GITALAXMI
KRISHNA
KOTAWADEKAR
Digitally signed by
GITALAXMI KRISHNA
KOTAWADEKAR
Date: 2023.12.22
15:35:24 +0545
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
CIVIL APPELLATE JURISDICTION
WRIT PETITION NO. 15544 OF 2023
Optra Health Private Limited …Petitioner
Versus
Additional Commissioner of Income Tax (HQ),
Pune & Ors. …Respondents
Mr. Sham Walve i/b Mr. Abhishek Khandelwal for Petitioner.
Mr. Suresh Kumar for Respondents-Revenue.
CORAM: K. R. SHRIRAM &
DR. NEELA GOKHALE, JJ.
th
DATED: 19 December 2023
PC:-
1. Petitioner filed return of income for Assessment Year (“AY”)
th
2017-2018 on 25 November 2017 in the name of Optra
Technologies Private Limited. By that date, the name of Petitioner
had already been changed with the approval and sanction of the
st
Ministry of Corporate Affairs vide communication dated 31 January
2017. The PAN number reflected in the income-tax return filed by
assessee for the relevant AY was correctly mentioned. On account of
a mismatch between the PAN number reflected in the income-tax
th
return and the name of the company, a communication dated 29
May 2018 came to be issued by the Deputy Commissioner of Income
Tax (“DCIT”), Centralised Processing Centre (“CPC”), Bangalore
asking Petitioner to rectify the defects within a period of fifteen days
from the date of receipt of such a communication. As Petitioner did
not do the needful within the prescribed time, the income-tax return
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filed by Petitioner (assessee) was declared to be invalid.
2. In order to overcome this difficulty, an application under
Section 119 of the Income Tax Act, 1961 (“the Act”) was filed by
Petitioner before the Principal Commissioner of Income Tax (“PCIT”)-
th
2, Pune, which came to be rejected by an order dated 9 September
2021 passed by the Principal Chief Commissioner of Income Tax
(“PCCIT”), Pune.
3. Against the order, Petitioner filed a Writ Petition being Writ
Petition No. 88661 of 2022 impugning the order passed by the PCCIT
and one of the primary grounds raised was Petitioner’s application
came to be rejected without even giving a personal hearing. This
rd
Court was pleased to dispose the petition vide its order dated 3
th
October 2022 by quashing and setting aside the order dated 9
September 2021 and remanding the matter for de-novo
consideration.
4. The matter was considered de-novo by the PCCIT, who again
rejected Petitioner’s application for condonation of delay under
Section 119(2)(b) of the Act. The reason for rejection is contained in
paragraph 6 of the impugned order, which reads as under :
“6. Contention of the AR was duly considered.
Communication by email is an established and legally accepted
and sufficient mode of communication. A company being
artificial judicial person, is always represented by an individual
to discharge its legal and other obligations. The argument that
the company's CFO was irregular in his duties and hence the
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company could not discharge its legal obligation, is not an
acceptable view. If such an argument is permitted, the
companies can get away from very serious obligations too.
Based on facts of the case, it is observed that the applicant has
failed to prove any genuine hardship, which was beyond it's
control, with necessary evidence.”
5. Mr. Suresh Kumar wanted time to file an affidavit-in-reply. In
our view, no purpose will be served by filing a reply because the
impugned order speaks for itself. Moreover, the petition was served
in early November 2023 and the department had almost six weeks to
file a reply if they really wanted to oppose the petition.
6. We are not happy with the reason given in the impugned order
rejecting Petitioner’s application for condonation of delay.
7. Petitioner’s explanation for not meeting with the time
prescribed for correcting the mismatch is that, the first notice of
invalid return under Section 139(9) of the Act was sent on registered
th
email-ID of one Mr. Prasad Sathe on 30 May 2018 and the final
th
notice of invalid return dated 19 June 2018 under Section 139(9) of
the Act was also sent on the email-ID of Mr. Prasad Sathe. Mr. Prasad
Sathe was the Chief Operating Officer leading Petitioner’s Pune office
operation and was heading Human Resources, Finance, Information
Technologies and Operation teams. He was also responsible for
statutory compliance of the company. All responsibilities of
complying with statutory provisions were entrusted to Mr. Prasad
Sathe. Mr. Prasad Sathe did not deliver despite the responsibility
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given to him. Mr. Prasad Sathe left the organization with effect from
th
7 March 2019. Prior to leaving the office, he was irregular in
attending work due to his personal issues. As the notices issued
under Section 139(9) of the Act were sent on Mr. Prasad Sathe’s
official ID, none of the other members of the company had any access
to the same. Admittedly, no physical copy of notice was sent to
company’s registered address. All this came to light when the new
team including one Mr. Kapil Bhakre (Director) and Mr. Dinesh Pande
(Director-Finance), found out the error during the finalization of
accounts for AY 2018-2019 and immediately took remedial action by
th
submitting an application dated 5 November 2019 to the office of
the DCIT, Circle-3, Pune. Petitioner immediately provided details
about the invalid return and requested him to activate the action on
the Income Tax Portal so as to enable Petitioner to rectify the return
of income for AY 2017-2018. It is stated that Petitioner would also
get a refund of Rs. 13,09,230/- and only wanted to rectify the invalid
return and comply with the Rules as per the Act. It is stated that
th
Petitioner had filed the return for AY 2017-2018 on 25 November
2017 within the deadline prescribed under the Act. The Audit Report
th
under Section 44AB of the Act was also filed on 25 November 2017.
So also, Form 3CEB reporting international transactions was filed. In
short, Petitioner has acted as a prudent assessee and carried out all
compliances on time. Petitioner declared income of Rs. 73,77,136/-
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for AY 2017-2018 and determined tax payable of Rs. 11,57,086/-.
Petitioner had even deposited Rs. 24 lakhs as advance tax during
Financial Year 2016-2017 pertaining to AY 2017-2018. Therefore,
Petitioner has always acted as a prudent assessee with the only error
being Petitioner did not use the changed name in the income-tax
returns.
8. In view of this background, it is obvious that the error for the
mismatch was not caused due to any deliberate or culpable
negligence or any mala-fides on the part of Petitioner.
9. While considering the genuine hardship, the PCCIT was not
expected to consider a solitary ground as to whether the assessee was
prevented by any substantial cause from filing the corrections within
a due time. Other factors also ought to have been taken into account.
The phrase “genuine hardship” used in Section 119(2)(b) of the Act
should have been construed liberally. The Legislature has conferred
the power to condone the delay to enable the authorities to do
substantial justice to the parties by disposing the matters on merits.
The expression ‘genuine’ has received a liberal meaning in view of the
law laid down by the Apex Court and while considering this aspect,
the authorities are expected to bear in mind that ordinarily the
applicant, applying for condonation of delay, does not stand to
benefit by lodging erroneous returns. Refusing to condone the delay
can result in a meritorious matter being thrown out at the very
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threshold and cause of justice being defeated. As against this, when
delay is condoned, the highest that can happen is that a cause would
be decided on merits after hearing the parties. When substantial
justice and technical considerations are pitted against each other,
cause of substantial justice deserves to be preferred, for the other side
cannot claim to have vested right in injustice being done because of a
non-deliberate action. There is no presumption that a delay in
correcting an error or responding to a notice of invalid return
received under Section 139(9) of the Act is occasioned deliberately or
on account of culpable negligence or on account of mala-fides . A
litigant does not stand to benefit by resorting to delay. In fact, he
runs a serious risk. The approach of authority should be justice-
oriented so as to advance cause of justice. If the case of an applicant
is genuine, mere delay should not defeat the claim. We find support
for this view in Sitaldas K. Motwani v. Director General of Income-tax
1
(International Taxation), New Delhi , relied upon by Mr. Walve,
where paragraph nos. 13 to 17 read as under :
“13. Having heard both the parties, we must observe that
while considering the genuine hardship, Respondent No. 1 was
not expected to consider a solitary ground so as to whether the
petitioner was prevented by any substantial cause from filing
return within due time. Other factors detailed hereinbelow
ought to have been taken into account.
14. The Apex Court, in the case of B.M. Malani v. CIT
[2008] 10 SCC 617, has explained the term "genuine" in
following words:
“16. The term ‘genuine’ as per the New Collins
Concise English Dictionary is defined as under :
1. 2010 (87) taxman.com 44 (Bombay).
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‘Genuine’ means not fake or counterfeit, real, not
pretending (not bogus or merely a ruse)’.
17.
18. The ingredients of genuine hardship must be
determined keeping in view the dictionary meaning
thereof and the legal conspectus attending thereto. For
the said purpose, another well-known principle,
namely, a person cannot take advantage of his own
wrong, may also have to be borne in mind.....” (p. 624).
The Gujarat High Court in the case of Gujarat Electric Co. Ltd.
(supra) was pleased to hold as under:
“... The Board was not justified in rejecting the claim
for refund on the ground that a case of genuine
hardship was not made out by the petitioner and delay
in claiming the relief was not satisfactorily explained,
more particularly when the returns could not be filed in
time due to the ill health of the officer who was looking
after the taxation matters of the petitioner....” (p. 737).
The Madras High Court in the case of R. Seshammal (P.) Ltd.
(supra), was pleased to observe as under:
“This is hardly the manner in which the State is
expected to deal with the citizens, who in their anxiety
to comply with all the requirements of the Act pay
monies as advance tax to the State, even though the
monies were not actually required to be paid by them
and thereafter, seek refund of the monies so paid by
mistake after the proceedings under the Act are
dropped by the authorities concerned. The State is not
entitled to plead the hypertechnical plea of limitation in
such a situation to avoid return of the amounts. Section
119 of the Act vests ample power in the Board to
render justice in such a situation. The Board has acted
arbitrarily in rejecting the petitioner's request for
refund.” (p.187)
15. The phrase “genuine hardship” used in section 119(2)
(b) should have been construed liberally even when the
petitioner has complied with all the conditions mentioned in
Circular dated 12-10-1993. The Legislature has conferred the
power to condone delay to enable the authorities to do
substantive justice to the parties by disposing of the matters on
merit. The expression “genuine” has received a liberal meaning
in view of the law laid down by the Apex Court referred to
hereinabove and while considering this aspect, the authorities
are expected to bare in mind that ordinarily the applicant,
applying for condonation of delay does not stand to benefit by
lodging its claim late. Refusing to condone delay can result in a
meritorious matter being thrown out at the very threshold and
cause of justice being defeated. As against this, when delay is
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condoned the highest that can happen is that a cause would be
decided on merits after hearing the parties. When substantial
justice and technical considerations are pitted against each
other, cause of substantial justice deserves to be preferred for
the other side cannot claim to have vested right in injustice
being done because of a non-deliberate delay. There is no
presumption that delay is occasioned deliberately, or on
account of culpable negligence, or on account of mala fides. A
litigant does not stand to benefit by resorting to delay. In fact
he runs a serious risk. The approach of the authorities should
be justice-oriented so as to advance cause of justice. If refund is
legitimately due to the applicant, mere delay should not defeat
the claim for refund.
16. Whether the refund claim is correct and genuine, the
authority must satisfy itself that the applicant has a prima facie
correct and genuine claim, does not mean that the authority
should examine the merits of the refund claim closely and
come to a conclusion that the applicant's claim is bound to
succeed. This would amount to prejudging the case on merits.
All that the authority has to see is that on the face of it the
person applying for refund after condonation of delay has a
case which needs consideration and which is not bound to fail
by virtue of some apparent defect. At this stage, the authority is
not expected to go deep into the niceties of law. While
determining whether refund claim is correct and genuine, the
relevant consideration is whether on the evidence led, it was
possible to arrive at the conclusion in question and not whether
that was the only conclusion which could be arrived at on that
evidence.
17. Having said so, turning to the facts of the matter giving
rise to the present petition, we are satisfied that respondent
No. 1 did not consider the prayer for condonation of delay in
its proper perspective. As such, it needs consideration afresh.”
10. This was followed by this Court in Artist Tree (P.) Ltd. v. Central
2
Board of Direct Taxes , relied upon by Mr. Walve, where paragraph
nos. 19, 21 and 23 read as under :
“ 19. The circumstance that the accounts were duly audited way
back on 14 September 1997, is not a circumstance that can be
held against the petitioner. This circumstance, on the contrary
adds force to the explanation furnished by the petitioner that the
delay in filing of returns was only on account of misplacement or
the TDS Certificates, which the petitioner was advised, has to be
necessarily filed alongwith the Return of Income in view of the
provisions contained in Section 139 of the said Act read
alongwith Income Tax Rules, 1962 and in particular the report in
2. [2014] 52 taxmann.com 152 (Bombay)
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the prescribed Forms of Return of Income then in vogue which
required an assessee to attach the TDS Certificates for the refund
being claimed. The explanation furnished is that on account of
shifting of registered office, it is possible that TDS Certificates
which may have been addressed to the earlier office, got
misplaced. There is nothing counterfeit or bogus in the
explanation offered. It cannot be said that the petitioner has
obtained any undue advantage out of delay in filing of Income
Tax Returns. As observed in case of Sitaldas K. Motwani (supra),
there is no presumption that delay is occasioned deliberately or
on account of culpable negligence or on account of mala fides. It
cannot be said that in this case the petitioner has benefited by
resorting to delay. In any case when substantial justice and
technical consideration are pitted against each other, the cause of
substantial justice deserves to prevail without in any manner
doing violence to the language of the Act.
21. We find that the impugned order dated 16 May 2006 of the
CBDT also seeks to reject the application for condonation of
delay on account of delay from the date of filing the Return of
Income, i.e., 14 September 1999 upto 30 April 2002. This was
not the ground mentioned in notice dated 7 February 2006 given
to the petitioner by the CBDT for rejecting the application for
condonation of delay. Thus the petitioner had no occasion to
meet the same. It appears to be an afterthought. However, as
pointed out in paragraph 20 hereinabove, the delay in filing of
an application if not coupled with some rights being created in
favour of others, should not by itself lead to rejection of the
application. This is ofcourse upon the Court being satisfied that
there were good and sufficient reasons for the delay on the part
of the applicant.
23. In light of the aforesaid discussion, we are of the opinion
that an acceptable explanation was offered by the petitioner and
a case of genuine hardship was made out. The refusal by the
CBDT to condone the delay was a result of adoption of an unduly
restrictive approach. The CBDT appears to have proceeded on
the basis that the delay was deliberate, when from explanation
offered by the petitioner, it is clear that the delay was neither
deliberate, nor on account of culpable negligence or any mala
fides. Therefore, the impugned order dated 16 May 2006 made
by the CBDT refusing to condone the delay in filing the Return of
Income for the Assessment Year 1997-98 is liable to be set aside.
Consistent with the provisions of Section 119(2)(b) of the said
Act, the concerned I.T.O. or the Assessing Officer would have to
consider the Return of Income and deal with the same on merits
and in accordance with law.”
11. In the circumstances, having considered the averments in the
petition, we are satisfied that the delay in not responding to the
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notice is received under Section 139(9) of the Act, was neither
deliberate nor on account of culpable negligence or any mala-fides .
The issue is only of correcting the name of Petitioner in the returns so
that there is no mismatch between the PAN number and name of the
company.
12. We, therefore, direct Respondents to permit Petitioner to
correct its name in the returns for AY 2017-2018 from ‘Optra
Technologies Private Limited’ to ‘Optra Health Private Limited’.
Therefore, we hereby quash and set aside the impugned order dated
rd
23 December 2022. Within two weeks of this order being uploaded,
the required portal will be opened for Petitioner to do the needful,
under advice to Petitioner.
13. We hasten to add that we have not examined the contents of
the returns filed by Petitioner or claims which have been made in the
returns. That will be subject of appropriate assessments/proceedings
under the Act.
14. Petition disposed. No order as to costs.
(DR. NEELA GOKHALE, J.) (K. R. SHRIRAM, J.)
GITALAXMI
KRISHNA
KOTAWADEKAR
Digitally signed by
GITALAXMI KRISHNA
KOTAWADEKAR
Date: 2023.12.22
15:35:24 +0545
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