Approval of delay application should focus on sufficient reason, not merits of claim U/s 119(2)(b) of Income Tax Act: Kerala High Court

 

Recently, Kerala High Court in the case of Mohan Poovampally Gopal v. Principal Commissioner of Income Tax Case number: WP(C) NO. 26159 FROM 2024 has held that while granting approval of delay application, focus should be on sufficient reason & not on merits of claim U/s 119(2)(b) of Income Tax Act.

Let us have a short overview of the case:

Facts:
1. The assessee challenged an order passed under section 119(2)(b) of the Income Tax Act, 1961, which refused to extend the time limit for filing income tax returns revised for assessment years 2007-2008 to 2018. 2019.

2. The assessee submitted that rather than assessing the validity of the claim for delay excuse, the competent authority assessed the merits of the claim of the assessee and concluded that the assessee does not was not entitled to relief under section 119(2)(b).

3. The department argued that the power under section 119(2)(b) of the Income Tax Act can only be exercised in exceptional circumstances and not automatically. She argued that although the merits of the case had been discussed, the competent authority found no reason to extend the filing deadline for the contribution years in question. Therefore, the assessee has not established grounds for relief under Article 226 of the Constitution of India.

Hon Kerala High Court held as below:

1. The Principal Commissioner of Income Tax had considered the merits of the claims raised by the assessee instead of assessing whether there was sufficient reason for condone the delay or extend the time limit in accordance with the provisions of Section 119 (2)(b) of the Income Tax Act, 1961, and in accordance with Circular No. 9/2015 dated 09.06.2015, issued by the Central Board of Direct Taxes.
2. So the application for condonation of delay should be considered not on the merits of the application made by the assessee, but on the question whether there was sufficient reason to excuse the delay in view of the provisions contained in Section 119(2)(b) of the Income Tax Act.
3. So the request for examining the validity of the claim for condonation of delay is granted.

The copy of the order is as under:

mohan-poovampally-568375