Minor delay in filing Form 10B can be condoned.
Condonation of Delay Granted; Pragmatic Approach Required in Time Extensions
Issue: Whether the rejection of an assessee-trust’s application for condonation of delay in uploading an audit report is justified when the delay was only 1 hour, 19 minutes, and 16 seconds beyond the midnight deadline.
Facts:
- The assessee-trust was exempt from paying income tax.
- The trust was required to file an audit report.
- The trust uploaded the audit report 1 hour, 19 minutes, and 16 seconds after the midnight deadline.
- The authority rejected the trust’s application for condonation of delay.
Decision:
- The court held that a pragmatic approach is required when exercising the power to enlarge time.
- The court found that a time overrun of a little more than an hour, with the report uploaded in the wee hours of the next day, would not have hampered the revenue’s work in dealing with the report.
- The court held that the impugned order was perverse and set it aside.
- The court directed that the report filed in Form 10B be considered as compliance by the assessee.
Key Takeaways:
- Pragmatic Approach: Tax authorities should adopt a pragmatic and reasonable approach when considering applications for condonation of delay.
- Minor Delays: Minor delays, especially those that do not prejudice the revenue, should be condoned.
- Reasonable Interpretation: The interpretation of deadlines should be reasonable and not overly technical.
- Section 119: Section 119 empowers the CBDT to issue instructions to subordinate authorities to ensure a fair and just administration of the Income-tax Act, including condoning delays in appropriate cases.
- Perverse Orders: Orders that are arbitrary or unreasonable can be set aside by the courts.
- The court is reinforcing the need for tax authorities to apply a reasonable and practical approach, and that minor delays should not result in the rejection of important documents.
HIGH COURT OF ORISSA
Silicon Institute of Technology, BBSR
v.
Commissioner of Income-tax
Arindam Sinha, Actg CJ.
and M.S. Sahoo, J.
and M.S. Sahoo, J.
W.P.(C) No. 2555 of 2025
FEBRUARY 4, 2025
S.S. Padhy, Adv. for the Petitioner. A. Kedia, Junior Standing Counsel for the Respondent.
JUDGMENT
Arindam Sinha, Actg. CJ. – Mr. Padhi, learned advocate appears on behalf of petitioner and submits, his client is a trust duly registered under the provisions in Income Tax Act, 1961. It is exempted from paying income tax. It is required to file audit report.
2. His client was late by 1 hour, 19 minutes and 16 seconds in uploading the audit report. It was not accepted as application for condonation of delay stood rejected by impugned order dated 4th December, 2024 made by the authority. He draws attention to the order and submits, purported reason given is, on verification it was noticed that reasons mentioned for delay are not sufficient and it was not a fit case for condoning delay in exercise of power under section 119 (2) (b) of the Act read with provisions of circular dated 9th June, 2015 issued by the Central Board of Direct Taxes (CBDT). He seeks interference.
3. Mr. Kedia, learned advocate, Junior Standing Counsel appears on behalf of revenue. He prays for adjournment to obtain instruction.
4. The authority considered reason given by petitioner for the delay to be mere asking on the basis of vague assertion without proof. Required proof, therefore, is reason for technical glitch causing delay in uploading the report. The delay is of 1 hour, 19 minutes and 16 seconds. The report stood uploaded beyond midnight of the last date, at 1:19 and 16 seconds in the following morning of 1st November, 2023.
5. The authority, in impugned order, relied upon view taken by the Delhi High Court in the case of M/s. BU. Bhandari Nandgude Patil Associates [W.P.(C) no. 6537 of 2017], inter alia on the passage reproduced below.
“Statutory time limits fixed have to be adhered to as it ensures timely completion of assessments. Discipline on regarding filing of returns have to be complied and respected, time limits unless compelling and good reasons are shown and established for grant of extension of time. Extension of time cannot be claimed as a vested right on mere asking and on the basis of vague assertions without proof.”
6. We appreciate petitioner may have been very close to the deadline in attempting to upload the report. It may have been a situation, where the pressure of meeting the timeline expiring in a few hours or minutes, there may have been mistakes made in uploading, attributed by petitioner as technical glitch. Even assuming such was the case, the report stood uploaded beyond midnight of the last date by 1 hour, 19 minutes and 16 seconds. There has to be pragmatic approach in exercising power to enlarge time. Here the time overrun over is a little more than an hour, on the report uploaded in the wee hours of the next day, 1st November, 2023. We cannot imagine the delay would have hampered work of revenue in dealing with the report.
7. For reasons aforesaid, it is clear to us that impugned order is perverse. As such we have dealt with the writ petition without granting adjournment.
8. Impugned order is set aside and quashed. The report filed in Form 10B be considered as compliance by petitioner.
9. The writ petition is disposed of.