ITAT condones minor delay of 12 min & 31 sec in filing ITR due to technical-snag in the Income Tax website: Allows carry-forward of losses

The brief facts of the case is that the assessee suffered business-loss during the year and claimed carry-forward of losses for Rs.57,69,223/-. However, CPC has reduced the same to Rs.63,849/-. This was due to the fact that the last date of filing return of income was 31.10.2019. However, the return was filed 12 minutes and 31 seconds past midnight and hence the filing date was reckoned as 01.11.2019. In the statement of facts filed during appellate proceedings, the assessee submitted that it was trying to upload the return on the website of Income Tax Department for 21 hours on 31.10.2019. However, due to rush and technical snag on the website, the delay of 12 minutes and 31 second occurred and accordingly, the return was reckoned as belated return which ultimately led to denial of carry-forward of losses. There was no willful and mala-fide intent to make a default and to forgo the benefit of carry-forward of losses. The cause of delay was genuine. However, Ld. CIT(A) observed that as per CBDT Circular No. 9/2015 dated 09.06.2015, specified Income Tax Authorities were vested with the powers of condonation of such delay u/s 119(2)(b) of the Act. Therefore, the ultimate remedy was to seek condonation before concerned Pr.CIT and the assessee had already filed an application with concerned Pr.CIT which was still pending. Therefore, the benefit of carry-forward of losses could not be allowed to the assessee. Aggrieved, the assessee is in further appeal before the tribunal.

ITAT in its order stated that Ld. CIT(A) has denied the otherwise eligible claim on mere technicalities completely ignoring the plight of the assessee. It relied on the decision of Hon’ble Madras High Court in Regen Infrastructure & Services (P.) Ltd. V/s CBDT (68 Taxmann.com 93) as affirmed by division bench (75 Taxmann.com 135). The Hon’ble Court, under similar circumstances, condoned the delay of one day and held that the petitioner had successfully explained the delay in filing the return on 16.10.2010 instead of 15.10.2010. Further, it is not the case of the respondents that the petitioner is not entitled to claim the carry forward loss under Section 139(3) of the Act. When the petitioner is entitled to claim the carry forward loss under Section 139(3) of the Income Tax Act, it cannot be stated that the delay in filing the return had occurred deliberately or on account of culpable negligence or on account of malafides. The division bench, while confirming this decision, further held that one should take judicial notice of the fact that uploading of Returns requires not only an effort but also consumes sometimes. If the assessee has encountered certain hardship or difficulty in uploading his return, due to a technical snag in the website of the Income-tax Department due to the last hour rush of filing of returns, the delay deserves to be condoned. Therefore, ITAT set aside the impugned order and restore the matter back to the file of Ld. CIT(A) to verify the fact that there was only a minor delay of 12 minutes and 31 seconds in the filing of the return of income as pleaded by the assessee. If so, the return filed by the assessee would be considered as a return filed u/s 139(1) and the benefit of carry-forward of losses would be allowed in accordance with the law.

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