CBDT circulars condoning delay apply to all assessment years to mitigate genuine hardship.

The Petitioner (VRG Electronics) challenged an order dated 12.12.2025 issued by the Principal Commissioner of Income Tax (PCIT), which rejected the Petitioner’s application under Section 119(2)(b) of the Income Tax Act, 1961

The Petitioner sought condonation of delay in filing Form 10IC for Assessment Year (AY) 2023-24, a mandatory requirement for exercising the tax option under Section 115BAA

Although the Petitioner filed its Return of Income within the extended period under Section 139(4), it failed to submit Form 10IC by the statutory deadline of 31.10.2023 due to an accountant’s lapse

The PCIT rejected the condonation request solely because AY 2023-24 was not explicitly mentioned in CBDT Circular No. 17/2024 (dated 18.11.2024), which provided for condonation of delay for specific previous Assessment Years

1. Whether the PCIT was correct in rejecting a condonation application for AY 2023-24 on the grounds that the relevant beneficial CBDT Circular only listed AYs 2020-21, 2021-22, and 2022-23

2. Whether a beneficial circular issued under Section 119(2)(b) to mitigate "genuine hardship" can be restricted to specific Assessment Years in the absence of a justifiable nexus

The court applied Section 119(2)(b) of the Income Tax Act, 1961, which grants the CBDT the power to authorize income tax authorities to admit belated applications for any exemption, deduction, or relief to avoid genuine hardship to an assessee

It further referenced Section 115BAA regarding the lower tax rate regime and the procedural requirement of filing Form 10IC

The court interpreted CBDT Circular No. 17/2024 (dated 18.11.2024) regarding the PCIT’s power to condone delays in filing prescribed forms

The Court observed that while the PCIT adopted a technically correct approach based on the literal text of Circular No. 17/2024, such a strict interpretation leads to "anomalous situations and injustice"

The Court reasoned that the circular was issued specifically to mitigate "genuine hardship" under the powers of Section 119(2)(b). Therefore, the inclusion of specific Assessment Years was "incidental" and "insignificant" to the core purpose of the circular

The Court noted that the Revenue could provide no "palatable justification" for restricting the benefit to AY 2022-23 while excluding AY 2023-24

It held that if a beneficial circular is not extended to all bona fide cases across all years, it defeats the legislative intent of mitigating hardship

Consequently, the Court determined that the circular must be read as applicable to all genuine cases regardless of the Assessment Year unless the CBDT explicitly provides a reasoned exclusion

It held that CBDT Circular No. 17/2024 (dated 18.11.2024) is not confined to the years listed therein and applies to AY 2023-24 for all genuine and bona fide cases

The Court directed the PCIT to decide the Petitioner's application on its merits in light of this declaration

The writ petition was disposed of in favor of the Petitioner