A two-judge bench of the Delhi High Court has held that the omission on the part of the
Chartered Accountant/ auditor would constitute a reasonable cause delay in claiming the refund by the assessee.
The assessee claimed that a sum of Rs.31,25,000/- was inadvertently
left out by its auditor/chartered accountant in the calculation while
filing the return. It was claimed that when it did discern the error or
claim, it had applied on 12.09.2016 to the Chief Commissioner, for
condoning the delay for filing the application for refund. The
application was rejected by the Commissioner – on 28.03.2018. In its
application, the assessee had claimed that its
Chartered Accountant had inadvertently overlooked the
TDS
amounts, as a consequence it could not have sought an appropriate
refund at the first instance or even claimed it before the period of
seeking refund had expired.
The bench comprising Justice Ravindra Bhatt and Justice Prateek Jalan
held that the net result of the impugned order is in effect that the
petitioner’s claim of inadvertent mistake is sought to be characterized
as not bonafide.
“The court is of the opinion that an assessee has to take leave of
its senses if it deliberately wishes to forego a substantial amount as
the assessee is ascribed to have in the circumstances of this case.
“Bonafide” is to be understood in the context of the circumstance of any
case. Beyond a plea of the sort the petitioner raises (concededly
belatedly), there can not necessarily be independent proof or material
to establish that the auditor, in fact, acted without diligence. The
petitioner did not urge any other grounds such as illness of someone
etc., which could reasonably have been substantiated by independent
material. In the circumstances of the case, the petitioner, in our
opinion, was able to show bonafide reasons why the refund claim could
not be made in time,” the bench said.
“The statute or period of limitation prescribed in provisions of law
meant to attach finality, and in that sense are statutes of repose;
however, wherever the legislature intends relief against hardship in
cases where such statutes lead to hardships, the concerned authorities –
including Revenue Authorities have to construe them in a reasonable
manner. That was the effect and purport of this court’s decision in
Indglonal Investment & Finance Ltd. (supra). This court is of the
opinion that a similar approach is to be adopted in the circumstances of
the case,” the bench added.