Court Upholds Dismissal of Delay Condonation Application for Income Tax Refund Beyond 6-Year Limit

Case Name:

SURESHAN M. v. THE PRINCIPAL COMMISSIONER OF INCOME TAX, KOZHIKODE & THE CENTRAL BOARD OF DIRECT TAXES (High Court of Kerala)

Key Takeaways:

- The CBDT circular delegated the power to condone delays in filing returns/refund applications up to Rs. 50 lakhs to Principal Chief Commissioners/Chief Commissioners of Income Tax. - However, the circular specifically stated that no application for delay condonation would be entertained beyond six years from the end of the relevant assessment year. - The court found no grounds to entertain the writ petition, as the application was filed beyond the six-year time limit prescribed by the circular. - The court upheld the CBDT's power to prescribe time limits for filing delay condonation applications. **Issue:** Whether the court should entertain the writ petition challenging the dismissal of the petitioner's application to condone the delay in filing a refund application for the assessment year 2011-12, which was filed beyond the six-year time limit prescribed by the CBDT circular. **Facts:** The petitioner filed an application on 5.4.2023 to condone the delay in filing a refund application for the assessment year 2011-12. The Principal Commissioner of Income Tax, Kozhikkode, dismissed the application vide order dated 19.5.2023, considering the CBDT circular dated 9.6.2015 (Ext.P7), which prescribed that no application for delay condonation would be entertained beyond six years from the end of the relevant assessment year. **Arguments:** - Petitioner's Argument: The petitioner challenged the dismissal order and the validity of the CBDT circular, Ext.P7, dated 9.6.2015, which prescribed the six-year time limit for filing delay condonation applications. - Respondent's Argument: The respondent relied on the CBDT circular, which was issued within the Board's power to prescribe time limits for filing delay condonation applications. **Key Legal Precedents:** The court did not cite any specific legal precedents in its judgment. **Judgment:** The court dismissed the writ petition, finding no grounds to entertain it. The court upheld the dismissal of the petitioner's application, as it was filed beyond the six-year time limit prescribed by the CBDT circular, Ext.P7, dated 9.6.2015. The court also rejected the challenge to the validity of the circular, stating that the CBDT had the power to prescribe time limits for filing delay condonation applications. **FAQs:** Q: Can the CBDT prescribe time limits for filing delay condonation applications? A: Yes, the court upheld the CBDT's power to prescribe time limits for filing delay condonation applications. Q: What was the time limit prescribed by the CBDT circular in this case? A: The CBDT circular prescribed that no application for delay condonation would be entertained beyond six years from the end of the relevant assessment year. Q: Can the court entertain a writ petition challenging the dismissal of a delay condonation application filed beyond the prescribed time limit? A: No, the court found no grounds to entertain the writ petition in this case, as the application was filed beyond the six-year time limit prescribed by the CBDT circular. Q: What was the court's view on the validity of the CBDT circular? A: The court rejected the challenge to the validity of the CBDT circular, stating that the Board had the power to prescribe time limits for filing delay condonation applications.

The present writ petition has been filed impugning order dated 19.5.2023 passed by the Principal Commissioner of Income Tax, Kozhikkode, Ext.P2, whereby the application of the petitioner filed on 5.4.2023 to condone the delay in filing refund application for the assessment year 2011-12 came to be dismissed, considering the circular, Ext.P7, dated 9.6.2015.

2. Vide the said Circular, Ext.P7, the power to condone the delay in filing return/refund application up to Rs.50 lakhs has been delegated to the Principal Chief Commissioners of Income Tax/the Chief Commissioners of Income Tax. However, paragraph no.3 of the Circular specifically provides that no application for condonation of delay would be entertained beyond six years from the end of the assessment year for which such application/claim is made.

3. In the present case, the application has been filed beyond the period of six years and, therefore, the application has been rejected by the Principal Commissioner of Income Tax vide the impugned order. I find no ground to entertain the present writ petition.

4. I also do not find any substance in the challenge made to the Circular, Ext.P7, dated 9.6.2015, which has been issued by the Central Board of Direct Taxes prescribing the procedure and limitation in exercising the power for condoning the delay. It is well within the power of the Board to prescribe the time limit for filing the application for condonation of delay. In view thereof, I find that the argument challenging the Circular has no merit.

The writ petition fails and the same is, accordingly, dismissed. Pending interlocutory application, if any, in the present writ petition stands dismissed.

Sd/-

DINESH KUMAR SINGH

JUDGE