Delhi High Court Quashes Unreasoned Orders in ITR Delay Cases
The Delhi High Court has set aside orders passed by tax authorities in two separate cases where assessees sought condonation of delay in filing Income Tax Returns (ITR) and related forms. The court observed that the orders were mechanical and failed to consider genuine reasons submitted by the petitioners.
Case 1: VRG Electronics Pvt Ltd
VRG Electronics Pvt Ltd challenged an order dated June 21, 2024, rejecting its application under Section 119(2)(b) of the Income Tax Act for condonation of a 60-day delay in filing ITR and Form 10-IC for AY 2023–24. The company filed its return on December 30, 2023, declaring income of Rs. 19,76,540 and claiming a refund of Rs. 4,190 while opting for the concessional tax regime under Section 115BAA.
The delay was attributed to the accountant’s poor health and workload. The petitioner argued that it acted in good faith and should not suffer due to its accountant’s oversight. Counsel stressed that the hardship was genuine and the delay unintentional. The respondent, however, rejected the plea citing CBDT Circular No. 09/2015, holding that negligence of an accountant cannot constitute genuine hardship.
The bench of Justice V. Kameswar Rao and Justice Vinod Kumar disagreed, observing that the PCIT failed to explain why the reason given—oversight by the accountant—was unacceptable. Since the return was delayed by only 60 days and corrective steps were taken promptly, the impugned order was held to be unreasoned. The matter was remanded for fresh consideration.
Case 2: Udit Goyal
In another matter, petitioner Udit Goyal challenged the rejection of condonation for a 12-day delay in filing ITR for AY 2021–22. The return, due by December 31, 2021, was filed on January 12, 2022. The delay was explained as a result of disruption caused by the COVID-19 pandemic and staff shortages during the Omicron wave.
The PCIT rejected the application, stating that the pandemic was not a sufficient justification and relying on CBDT Circular No. 09/2015. The High Court, however, found that the order lacked reasoning and did not engage with the petitioner’s specific averments. The bench emphasized that quasi-judicial authorities are duty-bound to pass reasoned orders. The impugned order dated May 30, 2023, was accordingly quashed and the matter remanded for de novo consideration.
Court’s Observations
The High Court reiterated that Section 119(2)(b) empowers authorities to grant relief where genuine hardship exists, and the focus must be on the sufficiency of reasons rather than strict technical compliance. Authorities cannot reject condonation applications mechanically, particularly when delays are short and caused by circumstances beyond the assessee’s control.
Both matters have now been sent back to the concerned PCIT for fresh decisions in light of the court’s observations.
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