Patna Metro Rail Corporation Ltd., V. The Principal Chief Commissioner of Income Tax

CWJC/16842/2022

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The case involves Patna Metro Rail Corporation Ltd., a government company, challenging the rejection of their application for condonation of delay in filing an income tax return for the assessment year 2020-21. The application was initially rejected by the Principal Chief Commissioner of Income Tax on the grounds that the petitioner did not substantiate facing a genuine hardship. The petitioner argued that the COVID-19 pandemic severely impacted their operations, affecting the availability of their accountants and auditors, and the health of their Company Secretary, which constituted a genuine hardship. The High Court, considering the unprecedented circumstances of the pandemic, found merit in the petitioner's arguments and remanded the case for a fresh decision.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 751290 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 27-03-2023
• Assessment Year: misc
• Other Referred Cases: B. M. Malani Vs. Commissioner of Income-Tax and Anr., Dehradun Chartered Accountants Society Vs. Union of India and Anr.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARCHANA SINHA; ALOK KUMA R
• Assessee Lawyers: AJAY RASTOGI; ROHITABH DAS; PARIJAT SAURAV
• Keywords: Condonation of delay; Covid-19 pandemic; Genuine hardship; Income Tax Return
• Section: 119(2)(b)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE AT PATNA Civil Writ Jurisdiction Case No.16842 of 2022 ====================================================== Patna Metro Rail Corporation Ltd., a limited company incorporated under the Companies Act, 2013, having its registered office at Vikas Bhawan, New Secretariat, Patna- 800015, through its Additional Managing Director, Md. Ashraful Haque, Male, aged about 50 years, Son of Late Noorul Haque, Resident of Phulwari Sharif, Police Station Phulwari Sharif, District- Patna. ... ... Petitioner/s Versus 1. The Principal Chief Commissioner of Income Tax (Bihar and Jharkhand), Patna, Bihar. 2. The Principal Commissioner of Income Tax-1, Patna, Bihar. 3. The Additional Commissioner of Income Tax (Tech.), Patna, Bihar. 4. The Income Tax Officer, Ward 2(1), Patna. ... ... Respondent/s ====================================================== Appearance : For the Petitioner : Mr. Ajay Kumar Rastogi, Sr. Advocate Mr. Rohitabh Das, Advocate Mr. Parijat Saurav, Advocate For the Income Tax : Ms. Archana Sinha @ Archana Shahi, Sr. Standing Counsel Mr. Alok Kumar, Advocate ====================================================== CORAM: HONOURABLE THE ACTING CHIEF JUSTICE and HONOURABLE MR. JUSTICE MADHURESH PRASAD ORAL JUDGMENT (Per: HONOURABLE THE ACTING CHIEF JUSTICE) Date : 27-03-2023 The petitioner is a Government Company incorporated under the Companies Act. It is said to be a joint venture between the Government of India and Government of Bihar. 2. The present writ application has been filed putting to challenge an order dated 31.05.2022 passed by the Principal Chief Commissioner of Income Tax (Bihar and Jharkhand) Patna High Court CWJC No.16842 of 2022 dt.27-03-2023 2/6 whereby the petitioner's application under Section 119(2)(b) of the Income Tax Act, 1961 (hereinafter referred to as \"Act\") requesting condonation of delay and permission to file the return of income for the assessment year 2020-21 (financial year 2019-20) has been rejected. 3. We have heard Mr. Ajay Kumar Rastogi, learned senior counsel appearing on behalf of the petitioner, and Ms. Archana Sinha, learned senior standing counsel for the Income Tax Department. 4. Mr. Ajay Kumar Rastogi, learned senior counsel appearing on behalf of the petitioner, has submitted that the last date for submission of income tax return for the assessment year 2020-21 was 31.05.2021. It was because of Covid-19 pandemic situation that the Accountants and Auditors of the company were not available and the Company Secretary was not keeping well. The company was also working with lesser man-power because of the pandemic restrictions and work of submission of the income tax return was assigned, in the background, to an official of the Government of Bihar. 5. He has submitted that on 21.12.2021, an application was filed for condonation of delay in filing the return and claiming refund of a sum of Rs. 83,000/- (Eighty three thousand Patna High Court CWJC No.16842 of 2022 dt.27-03-2023 3/6 rupees only). The said application has been rejected by the impugned order mainly on the ground that the petitioner failed to substantiate before the Principal Chief Commissioner, Income Tax, that it was facing genuine hardship because of which the return could not be filed on time. 6. Mr. Ajay Kumar Rastogi has brought our attention to Section 119(2)(b) of the Act read with a Government Circular dated 09.06.2015. Section 119(2)(b) of the Act confers upon the Board power to condone the delay in submission of return. The said power, depending upon the amount of claims, has been conferred upon various authorities of the income tax. 7. In the present case, Principal Chief Commissioner of Income Tax Department was vested with the power of acceptance/rejection of an application for condonation of delay and accordingly the impugned order has been passed by the Principal Chief Commissioner, Income Tax. 8. Mr. Ajay Kumar Rastogi has submitted that the expression \"Genuine Hardship\" has been explained by the Supreme Court in case of B. M. Malani Vs. Commissioner of Income-Tax and Anr. reported in (2008) 306 ITR 196 (SC) to be genuine difficulty. He has submitted that the Principal Chief Commissioner ought to have taken note of the Covid-19 Patna High Court CWJC No.16842 of 2022 dt.27-03-2023 4/6 pandemic situation, which was prevailing throughout the country, because of which the petitioner was facing genuine hardship/difficulty, which was the reason why the return could not be filed on time. He has submitted that the facts and circumstances which were explained before the Principal Chief Commissioner, Income Tax, were adequate to convince him that the petitioner was facing genuine difficulties, because of which the income tax return could not be filed within time. He has also relied on a Division Bench decision of Uttarakhand High Court in case of Dehradun Chartered Accountants Society Vs. Union of India and Anr. reported in (2021) 433 ITR 79 (Uttarakhand) to submit that in similar circumstance the High Court of Uttarakhand interfered with the order rejecting an application for condonation of delay and directed to leniently consider the representation for condonation of delay. 9. After having heard learned senior counsel appearing on behalf of the petitioner and learned senior standing counsel for the Income Tax Department, we find force in submission made on behalf of the petitioner that the Principal Chief Commissioner ought to have taken a lenient view considering the difficulties, which the persons were facing during the period of Covid-19 pandemic and general lock-down imposed during Patna High Court CWJC No.16842 of 2022 dt.27-03-2023 5/6 the said period. 10. Mr. Ajay Kumar Rastogi, learned senior counsel, has fairly submitted that this Court, exercising power of judicial review under Article 226 of the Constitution of India, cannot substitute its own opinion in place of the opinion of the Principal Chief Commissioner, to the extent the same relates to rejection of the petitioner's prayer for condonation of delay in exercise of power under Section 119(2)(b) of the Act. 11. In the facts and circumstances of the case, we remand the matter back to the Principal Chief Commissioner of Income Tax (Bihar and Jharkhand), after setting aside the impugned order dated 31.05.2022, with a direction to him to reconsider the petitioner's case for condonation of delay under Section 119(2)(a) of the Act. It is expected that the Principal Chief Commissioner of Income Tax shall keep in mind the ratio laid down by the Supreme Court in the case of B.M. Malani (supra) and the concern shown by the Division Bench of Uttarakhand High Court in the case of Dehradun Chartered Accountants Society vs. Union of India (supra). 12. This application is allowed with the observation that the petitioner shall be at liberty to file a fresh representation in this regard within 15 days, which shall be considered and Patna High Court CWJC No.16842 of 2022 dt.27-03-2023 6/6 decided accordingly, in the light of the observations noted above. 13. It is further expected that that Principal Chief Commissioner, Income Tax, shall pass order in accordance with law within four weeks thereafter. Sumit/Shashank- (Chakradhari Sharan Singh, ACJ) ( Madhuresh Prasad, J) AFR/NAFR NAFR CAV DATE NA Uploading Date 29.03.2023 Transmission Date NA "