Gujarat High Court
Deepak Pragjibhai Gondaliya vs Principal Commissioner Of Income Tax ... on 10 June, 2025
Author: Bhargav D. Karia
Bench: Bhargav D. Karia
NEUTRAL CITATION
C/SCA/3445/2024 ORDER DATED: 10/06/2025
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 3445 of 2024
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DEEPAK PRAGJIBHAI GONDALIYA
Versus
PRINCIPAL COMMISSIONER OF INCOME TAX VADODARA 1
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Appearance:
MR SUDHIR M MEHTA(2058) for the Petitioner(s) No. 1
MS SHAILEE S MEHTA(5873) for the Petitioner(s) No. 1
KARAN G SANGHANI(7945) for the Respondent(s) No. 1
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CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
and
HONOURABLE MR. JUSTICE PRANAV TRIVEDI
Date : 10/06/2025
ORAL ORDER
(PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) Heard learned advocate Mr. Sudhir M. Mehta for the petitioner and learned Senior Standing Counsel Mr. Karan G. Sanghani for the respondent.
2. By this petition under Article 226/227 of the Constitution of India, the petitioner has challenged the order dated 23.12.2022 passed by the respondent - Principal Commissioner of Income Tax, Vadodara-1 under Section 119(2)(b) of the Income Tax Act, 1961 (for short "the Page 1 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined Act") whereby the application filed by the petitioner to condone the delay in filing Form No. 67 for the Assessment Year 2020-21 is rejected.
3. The brief facts of the case are as under :
3.1. The petitioner has filed the Return of Income declaring total income of Rs.1,37,73,200/- for Assessment Year 2020-21 on 30.10.2020. It is the case of the petitioner that the petitioner was appointed at Bangladesh in 'Square Pharmaceutical Limited' as Executive Vice President and Scientific Affairs from 16.06.2019 and the petitioner earned Rs.42,46,561/- (Indian currency) on which tax was paid in Bangladesh as per the certificates dated 27.10.2019 and 28.10.2019 issued by the Deputy Commissioner Page 2 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined of Income Tax, Taxes Zone-II, Dhaka.
3.2. It is the case of the petitioner that as per Article 16 of the Double Taxation Avoidance Agreement (DTAA) between Bangladesh and India, the petitioner was entitled to credit of Rs.13,03,772/- on the tax payable on the amount of salary which was offered for tax by the petitioner as per the aforesaid certificates. The Return of Income filed by the petitioner was processed and intimation under Section 143(1) of the Act was issued on 24.12.2021 by the CPC, Bangalore. However, the petitioner did not file Form no. 67 as required by Rule 128(1) of the Income Tax Rules, 1962 (for short "the Rules"). The petitioner submitted Form no. 67 on 04.01.2022 that is after issuance of intimation under Section 143(1)of the Act dated 24.12.2021.
3.3. The petitioner thereafter preferred an Page 3 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined application under Section 119(2)(b) of the Act on 12.10.2022 before the Principal Commissioner of Income Tax, Vadodara for condonation of delay in respect of filing of Form no. 67 under Rule 128 of the Rules for the Assessment Year 2020-21. The respondent passed an impugned order on 23.12.2022 rejecting the application for condonation of delay on the ground that there was no genuine hardship shown by the petitioner for not filing the Form no. 67 along with Return of Income as the petitioner has simply stated that he missed to file Form no. 67 before filing the Return of Income. The respondent therefore held that the reasons stated by the petitioner are general in nature. The respondent therefore rejected the application as there was no reasonable cause due to which the petitioner forgot to file Form no. 67 Page 4 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined which prove any hardship is faced by him.
3.4. The petitioner has also preferred various applications under Section 154 of the Act for rectification of the intimation issued under Section 143(1) of the Act which were rejected by the Revenue. Being aggrieved, the petitioner also filed an appeal before the Commissioner (Appeals), which was also rejected by order dated 12.12.2023.
4. Learned advocate Mr. Sudhir Mehta for the petitioner submitted that the petitioner is entitled to the benefit of DTAA but only because of non-filing of Form no. 67, such benefit of the credit of tax paid by the petitioner in Bangladesh was denied. It was pointed out by learned advocate Mr. Mehta that the petitioner has duly disclosed the amount of tax credit available under Section 19(1) of Page 5 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined the Act of Rs.13,03,772/- and only because the petitioner filed the Form no. 67 belatedly on 04.01.2022, the respondent was not justified in denying such benefit by not condoning the delay in filing such Form which is procedural in nature.
4.1. In support of his submissions, reliance was placed on the following decisions:-
(1) In the case of Nirzari Amitbhai Mehta v.
Principal Commissioner of Income-Tax reported in [2024] 168 taxmann.com 674 (Gujarat).
(2) In the case of Surat Smart City Development Ltd. v. Principal Commissioner of Income-Tax reported in [2024] 169 taxmann.com 222 (Gujarat).
(3)In the case of Shri Visha Oswal Tap. Shantibhuvan Upashray and Derasar v. Commissioner of Income-Tax (Exemptions) reported in [2024] 167 taxmann.com 170 (Gujarat).
(4) In the case of Shri 108 Parshwanath Bhakti Vihar Jain Trust v. Commissioner of Income Tax (Exemption) reported in [2024] 166 taxmann.com 732 (Gujarat).
(5) In the case of Nileshkumar Uttamchand Page 6 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined Rathod v. Office of the Principal Commissioner of Income Tax reported in [2024] 160 taxmann.com 345 (Gujarat).
(6) In the case of Chintan Navnitlal Parikh (HUF) v. Deputy Secretary (OT and WT) Central Board of Direct Taxes reported in [2023] 154 taxmann.com 544 (Gujarat).
(7) In the case of Sarvodaya Charitable Trust v. Income Tax Officer (Exemption) reported in [2021] 125 taxmann.com 75 (Gujarat).
(8) In the case of Pankaj Kailash Agarwal v. Assistant Commissioner of Income-Tax reported in [2024] 161 taxmann.com 383 (Bombay).
5. On the other hand, learned Senior Standing Counsel Mr. Karan Sanghani for the respondent submitted that the petitioner failed to show any genuine cause which has resulted into any hardship to the petitioner, except stating that the petitioner has missed to file Form no. 67 which is mandatory to claim the benefit under Section 19(1) of the Act. It was submitted that on perusal of Rule 128 of the Rules, it provides that Form 67 is required to be filed along with Return of Income before Page 7 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined the due date of filing of Return of income as per Section 139(1) of the Act. It was submitted that the intention of the Government of India behind signing the DTAA is to avoid double taxation of income earned in foreign currency while the residency of the assessee is of India for the relevant financial year if the tax is paid on such income in the foreign country and, therefore, in order to ascertain the claim of person for foreign tax credit in India, the conditions as prescribed in Rule 128 of the Rules are mandatory. It was, therefore, submitted that the Form no. 67 as per Rule 128 of the Rules must be filed by the petitioner within the due date of filing of the return. It was, therefore, submitted that the petitioner is not entitled to any benefit of DTAA in absence of filing of Form no. 67 and the respondent authorities have rightly Page 8 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined refused to condone the delay in filing the Form no. 67 as the petitioner failed to show his genuine hardship for delay in filing such Form.
6. Having heard the learned advocates for the respective parties and considering the facts of the case, it is not in dispute that the petitioner had received the salary income from Bangladesh on which tax was duly paid by the petitioner to the said country and therefore, the petitioner was entitled to the benefit of DTAA. However, the only fault on the part of the petitioner was that Form no. 67 as required as per Rule 128 of the Rules was not submitted before the due date of filing of the return. Sub-rule (9)of Rule 128 of the Rules as it was in existence for the Assessment Year 2020-21 reads as under :-
Page 9 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined Sub-Rule(9)of Rule 128:
"48a. Substituted by the Income-tax (Twenty- seventh Amendment) Rules, 2022, w.r.e.f. 1-4- 2022. Prior to its substitution, sub-rule (9), read as under:
"(9) The statement in Form No. 67 referred to in clause (i) of sub-rule (8) and the certificate or the statement referred to in clause (ii) of sub-rule (8) shall be furnished on or before the due date specified for furnishing the return of income under sub-section (1) of Section 139, in the manner specified for furnishing such return of income"
7. As held by this Court in various judgments while considering the late filing Form 10IC, Form 10B as required under various provisions of the Act for claiming deduction under Chapter-VI, that the filing of form for claiming benefit under the provisions of the Act is procedural, the case of Sitaldas K. Motwani v. Director General of Income Tax (International Taxation) reported in [2010] 187 Taxman 44 {=323 ITR 223 (Bombay)} as well as the case of Bombay Mercantile Co-op. Bank Ltd., v. CBDT reported in [2010] 195 Taxman Page 10 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined 106 {=332 ITR 87(Bombay)} were followed.
Similarly in case of Pankaj Kailash Agarwal v. Assistant Commissioner of Income Tax reported in [2024] 464 ITR 65 (Bombay), the Hon'ble Bombay High Court has held as under :-
"10. On the issue of genuine hardship, relying on R. K. Madhani Prakash Engineers (Supra), Mr. Sarda submitted that while considering this aspect of genuine hardship, the authorities are expected to bear in mind that ordinarily applicant applying for condonation of delay does not stand to benefit by lodging its claim late. Moreso, when applicant is claiming the deductions under Section 80IC of the Act. Mr. Sarda submitted that CBDT has failed to understand that when the delay is condoned, the highest that can happen is that the cause would be decided on merits after hearing the parties and the approach of the CBDT should be justice oriented so as to advance cause of justice.
11. In the affidavit in reply, respondents have only reiterated what was stated in the impugned order and Mr. Rattesar resubmitted the same.
12. We would agree with Mr. Sarda that no assessee would stand to benefit by lodging its claim late. Moreso, in case of the nature at hand, where assessee would get tax advantage/benefit by way of deductions under Section 80IC of the Act. Of course, there cannot be a straight jacket formula to determine what is 'genuine hardship'. In our view, certainly the fact that an assessee feels that he would be paying more tax if he does not get the advantage of deduction under Page 11 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined Section 80IC of the Act, that will be certainly a 'genuine hardship'. It would be apposite to reproduce paragraph 4 of judgment in K. S. Bilawala & Ors. Vs. PCIT & Ors. (2024) 158 taxmann.com 658 (Bombay), which reads as under:
"4. There cannot be a straight jacket formula to determine what is genuine hardship. In our view, certainly the fact that an assessee feels he has paid more tax than what he was liable to pay will certainly cause hardship and that will be certainly a 'genuine hardship'. This Court in Optra Health Pvt. Ltd. v. Additional Commissioner of Income Tax (HQ), Pune & Ors. (Writ Petition No.15544 of 2023 dtd.19 th December 2023) in paragraphs No. 9
and 10 held as under:
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 Page 12 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined matter being thrown out at the very 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 (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 Page 13 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined explained the term "genuine" in following words:
"16. The term 'genuine' as per the New Collins Concise English Dictionary is defined as under :
'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 Page 14 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined 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 Page 15 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined 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 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 Page 16 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined 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 Board of Direct Taxes, (2014) 52 taxmann.com 152 (Bombay) 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 the prescribed Forms of Page 17 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined 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 Page 18 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined 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."
The Court has held that the phrase 'genuine hardship' used in Section 119(2)
(b) of the Act should be considered liberally. CBDT should keep in mind, while considering an application of this nature, that the power to condone the delay has been conferred is to enable the authorities to do substantial justice to Page 19 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined the parties by disposing the matters on merits and while considering these aspects, the authorities are expected to bear in mind that no applicant would stand to benefit by lodging delayed returns. The court also held that refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. As against this, when the delay is condoned, the highest that can happen is that a cause would be decided on merits after hearing the parties. Similar issue came to be considered in R. K. Madhani Prakash Engineers (Supra), where paragraph 8 reads as under :
"8 Further it is recorded in the impugned order that petitioner has failed in proving the genuine hardship. In this regard, we would refer to the judgment of a Division Bench of this court in the case of Sitaldas K. Motwani Vs. Director General of Income Tax (International Taxation) & Ors.,(2009 Scc Online Bom 2195) where the court has discussed the phrase "genuine hardship" used in Section 119(2)(b) of the Act. The court has held that the phrase "genuine hardship" should be construed liberally particularly when the legislature had conferred the power to condone the delay to enable the authorities to do substantive justice to the parties by disposing the matter on merits. While considering this aspect of genuine hardship, the authorities are expected to bear in mind that ordinarily applicant applying for condonation of delay does not stand to benefit by lodging its claim late.Page 20 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025
NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined More so, in the case at hand where applicant was seeking refund of a large amount of Rs.82,13,340/-. Refusing to condone the delay can result in a meritorious matter being thrown out at the very threshold and cause of justice being defeated. The authorities fail to understand that when the delay is condoned, the highest that can happen is that the cause would be decided on merits after hearing the parties. In our view, the approach of the authority should be justice oriented so as to advance cause of justice. If refund is legitimately due to applicant, mere delay should not defeat the claim for refund.
Paragraphs 13 to 16 of Sitaldas K. Motwani (Supra) 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 as to whether the petitioner was prevented by any substantial cause from filing return within due time. Other factors detailed herein below ought to have been taken into account.
14. The Apex Court, in the case of B.M. Malani v. CIT and Anr.
MANU/SC/4268/2008 : (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: 'Genuine' means not fake or counterfeit, real, not pretending (not bogus or merely a ruse).Page 21 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025
NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined
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.
The Gujarat High Court in the case of Gujarat Electric Co. Ltd. V. CIT MANU/G1/0407/2001: 255 ITR 396, 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 was looking after the taxation matters of the petitioner.
The Madras High Court in the case of Seshammal (R) v. ITO MANU/ TN/ 0879/ 1998: (1999) 237 ITR 185 (Madras), 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 plea of limitation in such a situation to avoid return of Page 22 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined the amounts. Section sit 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.
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 12th October, 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 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 Page 23 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined account of culpable negligence, or on account of malafides. 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."
(emphasis supplied) This court in R.K. Madhani Prakash Engineers (Supra) had quashed and set aside the impugned order on the ground that the impugned order is not passed by the CBDT but only with the Page 24 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined approval of the Member (IT & R), CBDT. So also in the case of TATA Autocomp (supra) wherein paragraphs 11, 12 and 13 read as under:
"11. Moreover, the order says, "This issues with the approval of Member (IT&R), Central Board of Direct Taxes" and is signed by one Virender Singh, Additional Commissioner of Income Tax (ITA Cell), CBDT, New Delhi. If a personal hearing has been granted by the Member (IT&R), the order should have been passed by him. Mr. Sharma states there could be file notings. If that is so, that has not been made available to Petitioner.
12. In the circumstances, on these two grounds alone, we quash and set aside the impugned order dated 5th December 2023 and remand the matter to CBDT. The Member/Members shall within three weeks from the date this order is uploaded make available to Petitioner all Field Reports/ documents/ instructions received by the CBDT from the Field Authorities and within two weeks of receiving the same, Petitioner shall file, if advised, further submissions in support of their application for condonation of delay.
13. Thereafter, an order shall be written, passed and that order shall be authored and signed by the Member of CBDT, who has given a personal hearing and when we say this, it is not the Member holding the same designation. The same individual who gave a personal hearing, shall write and sign the order. All rights and Page 25 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined contentions of Petitioner are kept open. Before passing any order which shall be a reasoned order dealing with all submissions of Petitioner, a personal hearing shall be given to Petitioner, notice whereof shall be communicated at least seven working days in advance."
13. In our view, legislature has conferred power on respondent no.3 to condone the delay to enable the authorities to do substantive justice to the parties by disposing the matter on merits. Routinely passing the order without appreciating the reasons why the provisions for condonation of delay has been provided in the act, defeats the cause of justice."
8. This Court in the case of Surat Smart City Development Ltd. (supra) has also considered the decision of the Hon'ble Apex Court in the case of Principal Commissioner of Income Tax v. Wipro Limited reported in 446 ITR 1 (SC) and observed as under :-
"17. On perusal of the above observation of the Hon'ble Apex Court, it is also apparent that the Hon'ble Apex Court has considered the significance of filing declaration under Section 10B(8) of the Act considering the provisions of Section 10B(5) of the Act being a check to verify the correctness of the claim of deduction at the time of filing of return so that if an assessee claims an exemption under the Act by virtue of Section 10B of the Act, then the correctness of the claim has already been verified under Sub-section (5) of Section 10B and Page 26 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined therefore, if the claim is withdrawn post the date of filing of return, the report of the Accountant filed under Section 10B(5) of the Act would become falsified and would stand to be nullified. However, the provisions of Section 115BAA of the Act are in a way granting relief to the assessee- Companies to enable them to pay the reduced rate of tax at rate of 22% on exercise of the option on the various conditions mentioned therein.
18. In such circumstances, the respondent No.1 was required to consider the facts of the case by permitting the petitioner to file a fresh Form 10IC and condoning the delay in filing such Form by molding the prayer made by the petitioner to treat the Form 10IC filed by the petitioner for Assessment Year 2021-2022 to be treated as that of for Assessment Year 2021. The provisions of Section 119(2)(b) of the Act are meant for redressal of the grievance and hardships caused to the petitioner as held by the Hon'ble Madras High Court in case of R.Seshammal (Supra) as under :
"This is hardly the manner in which the State is expected to deal with the citizens, who under 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."
9. Considering the facts of the case as well as the settled legal position, the petition succeeds and is accordingly allowed. The Page 27 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined impugned order dated 23.12.2022 is hereby quashed and set aside and the matter is remanded to the respondent to pass a fresh order to condone the delay in filing the Form no.67 so as to enable the petitioner to get the credit of the tax paid at Bangladesh on the salary earned by the petitioner for the year under consideration by availing the benefit of DTAA.
9.1. The respondent shall also pass appropriate order directing the Assessing Officer to pass a fresh order for giving effect to the credit of tax as per the Form no. 67 filed by the petitioner in accordance with law and pass a fresh intimation under Section 143(1) of the Act.
9.2. Such exercise shall be completed within twelve (12) weeks from the date of Page 28 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025 NEUTRAL CITATION C/SCA/3445/2024 ORDER DATED: 10/06/2025 undefined receipt of copy of this order.
10. The petition is accordingly disposed of.
Notice is discharged.
(BHARGAV D. KARIA, J) (PRANAV TRIVEDI,J) phalguni Page 29 of 29 Uploaded by PHALGUNI PATEL(HC00175) on Wed Jun 18 2025 Downloaded on : Fri Jun 20 23:16:55 IST 2025