Tax Authorities Must Treat Serious Illness Preventing Timely ITR Filing As ‘Genuine Hardship’: Delhi High Court Quashes Refusal To Condon Delay
Safiya Malik
The High Court of Delhi Division Bench of Justice V. Kameswar Rao and Justice Vinod Kumar set aside the Principal Commissioner of Income Tax’s order refusing to condone a 33-day delay in filing an income tax return and directed a fresh decision on the assessee’s condonation application under Section 119(2)(b) of the Income Tax Act, 1961 within eight weeks. Treating the assessee’s medical condition as a case of genuine hardship, the Court noted that MRI reports and the advice for surgery for cervical OPLL indicated a serious ailment that could reasonably have prevented timely filing of the return, and held that such circumstances could justify belated compliance with the statutory timeline.
The petition challenged an order dated 15 December 2023 by which the Principal Commissioner of Income Tax rejected an application under Section 119(2)(b) of the Income Tax Act seeking condonation of delay in filing an income-tax return.
The petitioner’s reasons for delay beyond 31 December 2022 were recorded in the condonation application. The petitioner stated that MRI scans conducted during the relevant period revealed “nerve compression in the spinal cord and secondary canal stenosis,” and that surgery for Cervical Ossification of the Posterior Longitudinal Ligament had been advised. It was asserted that due to the severity of the ailment, the petitioner missed the due date under Section 139(1). The petitioner also stated being under the bona fide belief that the last date for filing the return under Section 139(4) was 31 March 2023, resulting in non-filing by 31 December 2022.
The respondents rejected the application on the basis that the petitioner’s understanding of the due date constituted ignorance and could not be considered “genuine hardship” under CBDT Circular No. 9/2015. Before the Court, the petitioner submitted that MRI reports between 31 July 2022 and 31 December 2022 demonstrated a serious medical condition that prevented timely filing. The respondents maintained that the delay period was substantial and that rejection was justified.
The Court recorded that the petitioner had “highlighted the medical reasons, which prevented him from filing the ITR timely,” noting that the medical condition “do indicate seriousness, which required surgery for cervical OPLL.” It observed that a presumption could be drawn that the condition prevented timely filing. The Court then cited its prior decision in VRG Electronics Pvt. Ltd. v. Principal Commissioner of Income Tax Delhi 7, beginning with paragraph 18: “the short issue which arises for consideration is whether the respondent is justified in rejecting the application… seeking condonation of delay of sixty days in filing the ITR.” It reproduced paragraph 19, stating that Section 119(2)(b) empowers the CBDT to authorize authorities to admit delayed applications to avoid “genuine hardship.”
Quoting paragraph 20 from the same judgment, the Court recorded: “The Principal Commissioner… stated that mere reason of negligence on the part of the accountant cannot be accepted.” The Court reproduced the discussion in paragraph 21 referencing CBDT Circular No. 09/2015. It then quoted the Supreme Court’s interpretation in B.M. Malani: “genuine means not fake or counterfeit, real not pretending.” It also reproduced the Madras High Court’s statement that “the State is not entitled to plead the hypertechnical plea of limitation…” and that Section 119 empowers the authority to render justice.
The Court further quoted the Bombay High Court in Sitaldas K. Motwani: “The phrase ‘genuine hardship’… should have been construed liberally…” and “mere delay should not defeat the claim for refund.” The Court then referred to its earlier judgement in Ramesh Kumar Shokeen, noting that the impugned order there contained “no element of any reasoning, rationale or discussion…” and reiterating the constitutional principle that public orders must stand on their stated reasons: “Orders are not like old wine becoming better as they grow older.”
The Court continued by quoting that “the PCIT… is under obligation to pass a reasoned order.” It noted that in the present case, respondents had not explained why the petitioner’s grounds could not be accepted, observing that the accountant’s lapse “surely reflects reasonable cause.” The Court also referred to Gujarat Electric Co. Ltd. v. CIT, where delay caused by an officer’s illness was held to constitute genuine hardship.
The Court concluded that the impugned order failed to consider relevant averments and was therefore unreasoned.
The Court stated that “the delay being of 33 days and the reasons being bonafide, the PCIT should have condoned the delay.” It held that “The impugned order dated 15.12.2023 is liable to be set aside.”
The Court then recorded: “We order so and remand the matter to the PCIT to pass a fresh order keeping in view the reasons given by the petitioner in the application filed by the petitioner on 03.02.2023 and also keeping in view the law, as noted above and pass an order within a period of 8 weeks from the date of receipt of copy of this order. On passing of the said order, the parties shall proceed in accordance with law.”
Advocates Representing the Parties
For the Petitioners: Ms. Smriti Sahay, Advocate; Ms. Pragati Singh, Advocate
For the Respondents: Mr. Ruchir Bhatia, Senior Standing Counsel; Mr. Anant Mann, Junior Standing Counsel; Mr. Abhishek Anand, Advocate
Case Title: Neeraj Guglani v. Principal Commissioner of Income Tax-15 & Ors.
Neutral Citation: 2025: DHC:10004-DB
Case Number: W.P.(C) 2579/2024
Bench: Justice V. Kameswar Rao; Justice Vinod Kumar
