Author: Khushi J. Prajapati
The Delhi High Court held that income tax reassessment proceedings cannot be initiated solely based on the allegation of delayed digital filing of Form 10.
The court observed that the petitioner had submitted Forms 10 and 10B to the Assessing Officer (AO) beyond the deadline for electronic filing.
According to the plaintiff, Form 10 was a procedural document that could be simply filed in person since the information was already examined by AO in respect of disclosures during the assessment proceedings.
The Court emphasized the importance of Circular number 7/2018 released by the Central Board of Direct Taxes (CBDT) which recognized the technical problems that caused delays in e-filing Form 10. The Circular instructed assessing authorities to find out if there was reasonable cause for the delay. Despite this, the AO passed a reassessment order on no condonation of delay being sought by the petitioner. The Court pointed out that AO did not abide by this Circular’s order.
The High Court ruled in favor of the petitioner arguing that there was no justification for reassessment action when there had already been an acknowledgment of e-filing issues along with substantive compliance before AO with Form 10.
It stressed that procedural non-compliance due to technical glitches especially when substantive requirements have been satisfied should not entail any adverse taxation consequences.
Facts
The petitioner, an incorporation under Section 8 of the Companies Act, 2013 questioned reassessment proceedings initiated by income tax authorities for the assessment year 2016-17 in the case of The Associated Chambers of Commerce and Industry of India vs Deputy Commissioner of Income Tax & Ors.
It was said that the petitioner electronically failed to submit Form 10 in time by Article 139 of the income tax law and thus the Reassessment was done. Nevertheless, Form 10 and Form 10B had been submitted physically before the assessing officer by the petitioner while there were technical problems causing delays in electronic filing. The substantive requirements were met hence this procedural delay should not have led to reassessment since they were out of their control.
Case Details
The Associated Chambers of Commerce and Industry of India vs Deputy Commissioner of Income Tax & Ors
Court: High Court of Delhi
Judgment Pronounced: 05 August 2024
Petitioner Counsel: Mr. Rohit Jain & Mr. Samarth Chaudhary, Advs.
Respondents Counsel: Mr. Shlok Chandra, SSC with Ms. Madhavi Shukla, Jr. SC, Ms. Priya Sarkar, Jr. SC with Mr. Sudarshan Roy, Advocate
Petition Number: W.P.(C) 10520/2023 & CM APPL. 40791/2023 (Stay)
Judges: Justice Yashwant Varma and Justice Ravinder Dudeja
