Taxpayer Wins Court Battle After IT Department Ignores Rectification Request for 6 Years.
08 April 2024
Income Tax >> Tax Laws
In a recent case, a taxpayer successfully challenged an order by the Central Board of Direct Taxes (CBDT) that rejected their application to condone a delay in filing an income tax return.
The issue stemmed from an inadvertent error by the taxpayer's chartered accountant who failed to upload the required Form 10CCB along with the return. The taxpayer argued that this mistake constituted a reasonable cause for the delay and requested leniency from the CBDT.
However, the CBDT rejected the application, interpreting the term "genuine hardship" in a strict manner. The taxpayer disagreed, asserting that the CBDT should consider the financial implications of the delay. Missing the deadline meant losing out on deductions offered under Section 80IC of the Income Tax Act.
To support their claim, the taxpayer cited past court cases where judges emphasized a liberal interpretation of "genuine hardship." These cases highlighted that authorities should acknowledge situations where a taxpayer wouldn't benefit from filing a delayed return, implying a lack of deliberate intention.
The court is disappointed by the respondent's inaction and lack of response to the petitioner's application. The respondent claims there was no mistake, but the court finds this statement "baseless" since no order was passed. The court criticizes the respondent's disregard for its duty and accountability to taxpayers. A copy of this order will be sent to the Principal Chief Commissioner of Income Tax (PCCIT) to initiate disciplinary action against the respondent for dereliction of duty. The court highlights a previous case (R. K. Madhani Prakash Engineers) where proper approval procedures weren't followed. The court finds a similar disregard for its orders in the current case. A copy of this order will be sent to the Chairman of CBDT to ensure compliance with judicial directions.
The court ordered that the respondent must dispose of the pending rectification application by May 31, 2024. The respondent must grant the petitioner a personal hearing before passing any order. The petitioner must receive at least five working days' notice before the hearing.