M/S. BEST READY MIX CONCRETE v. THE PRINCIPAL COMMISSIONER OF INCOME TAX
Case Details & Bench
- Court
- High Court of Kerala
- Hon'ble Judges
- Dinesh Kumar Singh
- Judgment Date
- 2023-11-24
- Court Decision / Holding
- Writ petition allowed; Ext.P7 set aside; matter remitted to the Principal Commissioner of Income Tax to pass fresh orders on the application for condonation of delay in filing the return, noting that while considering the condonation, the PCIT is not required to adjudicate the merits of the underlying claim.
- Final Disposition
- Writ petition allowed; Ext.P7 set aside; remitted for fresh condonation considerations (without venturing into merits of the underlying claim)
Parties to the Case
Appellants / Petitioners
- M/S. BEST READY MIX CONCRETE IV/566B, Velakkode, Mundur, Thrissur
Respondents
- The Principal Commissioner of Income Tax, Kozhikode
- Income Tax Officer (HQ & TPS), Kozhikode
Legal Representation & Advocates
Counsels for Petitioners
- • Harisankar V. Menon
- • Meera V. Menon
- • R. Sreejith
- • K. Krishna Parvathy Menon
Counsels for Respondents
- • Keerthivas Giri
- • P.G. Jayashankar
Case Synopsis & Summary
This writ petition challenges Ext.P7, an order dated 18-10-2023 passed by the Principal Commissioner of Income Tax, Kozhikode, under Section 119(2)(b) of the Income Tax Act, 1961, rejecting the applicant’s prayer for condonation of delay in filing the return for AY 2021-22. The petitioner contends that Section 119(2)(b) authorizes the Board to empower subordinate authorities to admit claims after expiry of the prescribed period and deal with them on merits, but that the authority delegations cannot permit consideration of the merits of the underlying income/loss claim in condonation proceedings. The petitioner argues that the impugned order improperly delves into merits and relies on CBDT Circular 9/2015 to the extent of evaluating the correctness of the claim, which is outside the scope of condonation. The department defends Ext.P7, explaining that the PCIT did not consider merits but rejected due to absence of substantiating evidence, consistent with the delegation and the absence of merits in the record. The court notes that a Division Bench decision in Daisy v. The Principal Commissioner of Income Tax (W.A.No.1420/2023) held that the Circular does not permit merits-based consideration and that the PCIT cannot adjudicate the merits of the refund application. The High Court ultimately allows the petition, sets aside Ext.P7, and remits the matter to the PCIT to pass fresh condonation orders, stating that the PCIT is not required to decide the merits of the underlying claim at this stage.
Provisions of Law Cited
Submissions & Arguments
Contentions of Appellants / Petitioners
The petitioner submits that Section 119(2)(b) merely empowers the Board to delegate the power to condone delays and to decide claims on merits if permissible, but the Act does not authorize the authority to adjudicate the merits of the underlying income/loss claim during condonation proceedings. It contends that the impugned order, Ext.P7, reversibly conflates condonation with merits and relies on CBDT Circular 9/2015 to evaluate the substantive claim, contrary to the controlling authority in Daisy (W.A. No. 1420/2023). It argues that the grounds for condonation must be decided on merits only in terms of delay and substantiating evidence, not on the merits of the claim itself.
Contentions of Respondents
The respondents submit that the PCIT’s order rejected the delay claim solely due to lack of substantiating evidence and did not venture into the merits of the underlying claim. They contend that the Board’s delegation under Section 119(2)(b) and Circular 9/2015 is invoked to assess the delay and authenticity of documents, not to decide substantive tax liability. The department contends that the decision was properly based on evidentiary considerations and that the petitioner misreads the scope of the 119(2)(b) power.
Cited Precedents (1)
| Case Name | Citation | Treatment | Explanation |
|---|---|---|---|
| Daisy v. The Principal Commissioner of Income Tax | W.A.No.1420/2023 | Positive | Daisy held that the Circular cannot empower the PCIT to consider merits of the refund/claims under Section 119(2)(b); the current judgment relies on this proposition to confine the PCIT to condonation merits and not the substantive merits of the claim. |
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