High Court Condones Four-Day Delay in E-Verification; Restores Co-operative Society’s Section 80P Claim

Shri Padmavati Sharafi Sahkari Mandali Ltd., a registered co-operative society entitled to claim deduction under Section 80P of the Income Tax Act, filed its return for AY 2022-23 on 08.10.2022. Under the amended regime effective from 01.08.2022, the e-verification window was reduced from 120 days to 30 days.  The society was required to complete e-verification by 07.11.2022. However, verification was completed only four days late.

Because of this delay, the CPC processed the return under Section 143(1)(a) and disallowed the Section 80P claim, raising a demand of Rs. 11 lakh. The society filed an application before the Chief Commissioner under Section 119(2)(b), seeking condonation of delay. The Chief Commissioner rejected the application on 25.09.2024. The society challenged this order before the High Court.

Central Issue: Whether a four-day delay in e-verification, caused by a bona fide misunderstanding of the revised time limit, constitutes “genuine hardship” warranting condonation under Section 119(2)(b).

HC Decided: The High Court quashed the rejection order and allowed the writ petition. It held that the explanation offered by the society was convincing and reflected a genuine and bona fide belief that the earlier 120-day period for e-verification was still in force. The Court observed that such a minor, unintentional delay, arising from a clerical and procedural misunderstanding, should not deprive a co-operative society of a substantive statutory deduction under Section 80P.

The Court therefore set aside the impugned order and directed the Department to pass a fresh order within four weeks, in accordance with the observations recorded.

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