S. 119 Condonation of delay should not be rejected on hyper technical ground

Assessee availed Optional Early Retirement Scheme of the employer RBI. RBI while making the payment to the petitioner under the Scheme had deducted as tax at. However, in the return of income for assessment year 2004-05 filed on 15th October, 2004 the petitioner did not claim any refund of tax as TDS paid by RBI on his behalf nor was the credit on tax utilized to discharge tax payable on any other income. On 8th May, 2009 that the CBDT issued a Circular clarifying that the employees of RBI who had opted for early retirement scheme during the year 2004-05 would be entitled for benefit of exemption under Section 10(10C) of the Act. In view of the above the petitioner filed a revised return of income on 8th September, 2011 claiming benefit of exemption available to the Scheme under Section 10(10C) of the Act which consequently would result in refund. However, there was no response to the above revised return of income from the respondent-revenue.

The petitioner in the meantime also filed an application with the Commissioner of Income Tax under Section 119(2) (b) of the Act seeking condonation of delay in filing his application for refund in the form of revised return of income for assessment year 2004-05. The respondent revenue by the impugned order dismissed the application under section 119(2)(b) of the Act on the ground that in view of Instruction No. 13 of 2006 dated 22nd December, 2006 by the CBDT an application claiming refund cannot be entertained if the same is filed beyond the period of 6 years from the end of the assessment year from which the application is made. In the affidavit in reply dated 19th November, 2013 the Commissioner of Income Tax states that he bound by the above instructions issued by the CBDT and consequently the claim for refund cannot be considered.

It was held that the application under Section 119(2)(b) of the Act is being denied by adopting a very hyper technical view that the application for condonation of delay was made beyond 6 years from the date of the end of the assessment year 2004-05 and not disputed the claim of the petitioner for refund on merits. In this case the revised return of income filed on 8th September, 2011 should itself be considered as application for condonation of delay under Section 119(2)(b) of the Act and refund granted. The court latter directed to grant refund due - Devdas Rama Mangalore vs. CIT [2014] 41 taxmann.com 508 (Mumbai).