Section 119(2)(b)

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Querist : Anonymous

Querist : Anonymous (Querist)

14 July 2016 Respected Sir/ Madam,
One of my client, Insurance agent have not file ITR for the AY 09-10,10-11,11-12,12-13 and want to claim return against TDS deducted for the said year.So kindly give me a application format u/s 119(2)(B).
Anticipating a favorable response.

CA Chandni Saluja

CA Chandni Saluja (Expert)
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14 July 2016 Application to CBDT u/s. 119
1. Introduction
Every Rule is said to have an exception. Similarly, the Income-tax Act, 1961, contains various provisions which are mandatory in nature and some of them attain the garb of mandatory nature after passing of certain time limits or orders. However, on principles of natural justice, relief should be available to the assessees on grounds of reasonableness, genuine hardships and exigencies beyond the control of the assessee.

Therefore, the Central Board of Direct Taxes (CBDT) which is the highest administrative authority for direct taxes, is empowered by the Act u/s. 119(2), to issue general or special order, authorising any income-tax authority, (not being the first appellate authority) to admit an application or claim for any exemption, deduction, refund or any other relief under the Income-tax Act after the expiry of the period specified by or under the Act for making such application or claim and deal with the same on merits in accordance with law.

This paper proposes to deal with the scope of the section, various aspects of the powers given to CBDT, relevant circulars, notifications and press releases (Annexures A to D) and give specimen applications to be made by the assessees.

2. Scope
The Board may exercise this power if it considers it desirable or expedient to do so for avoiding genuine hardship in any case or class of cases. This power is exercisable even in circumstances where no such power is granted to the AO or any other officer.

The very object of conferring power on the Board is to consider the exceptional cases where a departure from the provisions of the Act with regard to the period with which the relief is to be sought, can be regarded as justified. A blanket refusal to exercise the power notwithstanding the circumstances in which it is invoked, is not an order which is contemplated by s. 119(2)(b). The circumstances are required to be examined and only with regard to those circumstances relief is to be either granted or refused. The primary consideration for granting relief under s. 119(2)(b) is undue hardship.

3. "Claim" may be made through a return
The "application" or "claim" contemplated by the provisions need not be one made separately and the same may be contained in the return of income submitted by the assessee. Hence where the assessee who filed a belated return, sought directions of the Board under s. 119(2)(b) to the AO to allow the assessee’s claim for determination of losses, depreciation and investment allowance for the purpose of carry-forward, the Board was held to be not justified in rejecting the assessee’s request on the ground that s. 119(2)(b) speaks of an "application" or a "claim" but not a "return" filed beyond time. It was held that a claim made by the assessee in its return for carry forward of losses etc., was "a claim" falling under s. 119(2)(b) for "any other relief" and the same could not be rejected merely on the ground that it was not made by a separate application.

4. Board should conform to the principles of natural justice
Sec.119(2)(b) enables the Board to direct the admission of an application or a claim filed after the period of limitation for avoiding genuine hardship caused in any case or class of cases. Thus the statute makes it incumbent on the Board to consider the case of the assessee pleaded under s. 119(2)(b). This power has to be exercised by the Board alone and not by any other authority. The Board is required to exercise its discretion by taking into consideration all the relevant facts and circumstances. The order must be informed by reasons as the said power is not to be exercised arbitrarily. The power has all the traits of judicial power. Hence, the power exercisable by the Board under s. 119(2)(b) is quasi-judicial in nature, but not a mere administrative power. When an authority discharges its quasi-judicial function, it should conform to the principles of natural justice. Therefore, the Board is required to afford an opportunity of hearing to the assessee whether by way of oral hearing or by allowing the filing of written submissions.

5. Delegation of Power by the Board
Though the Act empowers the Board, looking at the large number of cases, and the requirement of examining the issues on a case to case basis, the Board has delegated some of the powers to the Lower authorities.
a. Applications for dealing with applications for condonation of delay in filing returns and claiming refunds – vide Instruction N o 12 of 2003 dt 30th October 2003 {(2003) 185 CTR (St) 83} the Board has delegated the powers of acceptance/rejection upto Rs. 100000 to the Commissioners and upto Rs.500000 to the Chief Commissioners. The Board has retained the powers in respect of claims exceeding Rs.500000 only with itself.

b. Waiver of interest under sections 234A, 234B and 234C : The powers have been delegated to the Chief Commissioners of Income Tax vide Notification F No 400/234/95-IT(B), dt. 23rd May 1996 which was further modified by Circular No 783 {(1999) 157 CTR (St) 107}
Thus the powers remaining with the Board are:
a. dealing with applications for condonotion of delay in filing returns and claiming refunds EXCEEDING RS.500000, and
b. relaxing the requirement contained in any provisions of Chapter IV or Chapter VIA, which have been caused due to the circumstances beyond the control of the assessee.
SPECIMEN OF APPLICATION FOR CONDONATION OF DELAY IN FILING OF
RETURN CLAIMING REFUNDS EXCEEDING RS.500000
X Y Z & co
_______________________________.
_______________________________
_______________________________
The Central Board of Direct Taxes,
New Delhi.
Dear Sir,
Sub.: Petition for condonotion of delay in filing Return and Claim of Refund. A.Y. 1999-2000.
P.A.No. : _____________
Wd. 15
We are assessed to income-tax in Ward 15, Mumbai as per the abovementioned PAN & GIR numbers. Our Case falls within the jurisdiction of Chief Commissioner of Income Tax, Mumbai III
We have been assessed to Tax as a partnership firm upto the A Y 1998-99. During the previous year relevant to A Y 1999-2000 there was a dispute amongst the partners and a retirement deed and new partnership deed was drawn up. However, the retiring partner was reluctant to sign the partnership deed and as a result one of the continuing partners had a reservation in signing the new deed. Further some of the TDS Certificates and Advance Tax Challans required to be filed with the return of Income were in the possession of the retiring partner. The return of income could therefore not be filed as per the provisions of the Act.
The entire dispute was a subject matter Arbitration, before Justice ABC retired judge of the Mumbai High Court. The arbitration award has been now given and the relevant documents are available for filing the return.
The total refund due to the firm is Rs. 550000. We understand that as the prescribed time limits have long been passed, the jurisdiction for admitting the return and the claim of refund, now rests only with the Board, Hence this application.
It may further be appreciated that we were prevented from filing the return and claiming the refund within the prescribed time limit, due to reasonable cause and the non acceptance will cause genuine hardship to the firm.
Anticipating a fovourable response.
Yours truly,
For X Y Z & Co
Partner.
SPECIMEN OF PETITION RELAXING THE REQUIREMENT CONTAINED IN ANY PROVISIONS OF CHAPTER IV
The Central Board of Direct Taxes,
New Delhi.

Dear Sir,
Re: Petition for relaxing the requirement contained in Chapter IV of the Income Tax Act 1961 – A Y 2003-04
We are assessed to income-tax in Ward 1, Mumbai as per the abovementioned PAN & GIR numbers. Our Case falls within the jurisdiction of Chief Commissioner of Income Tax, Mumbai III
We have made a donation in the previous year relevant to A Y 2003-04 to ABC Trust, of Rs 1000000. The said trust had applied to the Finance Ministry for approval u/s 35AC. The approval of the relevant authority has been received by the said Trust only on 31st December 2004, w e f 1-4-2003. We had however not claimed the deduction u/s 35AC since the approval had not been received.
Our Assessment for the year under consideration is in progress and the necessary certificate is now in our possessuion. We understand that the power for allowing the deduction now rests with the Board and hence this petition.
Your honour will appreciate that we were prevented from making the claim under Chapter IV for reasons beyond our control and hence this situation.
We request your honour to consider the case on merits and pass the necessary orders to the Assessing Officer, for allowing our claim u/s 35AC for A Y 2003-04.
Thanking You,
Yours truly,
For X Y Z & Co.

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