Whether the power U/s 119(2)(b) allows commissioners to admit a belated Form 9A & condone the delay if assessee provides valid reasons
The Bombay High Court, in Nav Chetna Charitable Trust vs. Commissioner of Income Tax (Exemption), addressed the issue of whether the power under Section 119(2)(b) of the Income Tax Act, 1961 allows commissioners/competent authorities to admit a belated filing of Form 9A and condone the delay when the assessee provides valid reasons.
Key Points of the Judgment:
1. Statutory Discretion under Section 119(2)(b):
The Court emphasized that the powers and discretion under Section 119(2)(b) are intended to mitigate hardships faced by taxpayers and to ensure substantial justice. These powers must be exercised judiciously and not in a manner that leads to undue hardship for genuine assessees.
2. Circumstances Leading to the Delay:
The petitioner-trust attributed the delay in filing Form 9A to the procedural shift from manual to electronic filing. The delay was also minimal-just three days after the issuance of the relevant CBDT Circular. This demonstrated that the delay was not intentional but due to bona fide reasons.
3. Rejection of the Petitioner’s Application:
The Court criticized the impugned order for conflating the issue of delayed filing with the unrelated matter of claiming deductions for depreciation and capital expenditure. This approach failed to consider the undue financial burden and hardship that rejection of the application would impose on the petitioner.
4. Judicial Precedents:
The Court relied on decisions such as Jyotsna M. Mehta vs. Principal Commissioner of Income Tax and others, which recognized bona fide reasons for delays-whether due to procedural changes or professional lapses—as valid grounds for condonation under Section 119(2)(b).
5. Conclusion:
The Court held that denying condonation of delay in such cases would be hyper-technical and contrary to the intent of the law. It allowed the petition and quashed the impugned order dated 28 September 2023, directing the respondents to condone the delay in filing Form 9A and decide the matter on merits.
Legal Implications:
This decision underscores the principle that statutory powers under Section 119(2)(b) must be exercised in a manner that prioritizes fairness, justice, and the avoidance of undue hardship, especially for charitable institutions like trusts.
The copy of the order is as under:
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