A Condonation of Delay in Filing of Income Return is a special dispensation granted by the Income Tax Department to taxpayers who have failed to file their income tax returns by the due date. It enables people to file their tax returns without fear of incurring late costs. To learn more, visit this blog.
In India, courts may give leniency for late filing of legal claims or petitions. If the taxpayer desires to submit previous returns, the same leniency may be applied.
Before issuing a Condonation of Delay, the Income Tax Department evaluates a number of issues, and taxpayers must present precise information and valid grounds for the delay. Delay forgiveness absolves a person of the legal consequences of failing to file an appeal, litigation, or application within the statutory time period.
Accepting a petition for condonation of delay admits that the person was unable to file within the required date and allows them to proceed anyhow.
This is typically done when the delay is caused by circumstances beyond the petitioner’s control, such as illness or a natural disaster. There may be a fee for filing the petition, and the petitioner may be required to produce documentation of their circumstances, depending on the court or authority.
The court or authority may also require the petitioner to explain why the delay was reasonable and why the petition should be allowed, depending on the nature of the case.
If the petition is accepted, the petitioner will be able to continue with their case with no further penalties. Delay forgiveness can assist guarantee that justice is delivered and that people affected by a delay are not unfairly penalised due to circumstances beyond their control.
A delay arises when a suit or application is not filed within the time limit prescribed by law. However, in specific situations, the person may be able to obtain an exception to this time limit, known as delay condonation. This is an option for someone who has not presented their case to a court or other authority within the time frame specified by law.
Under the Limitation Act of 1963 – Delay Excuse
The Limitation Act of 1963 establishes the time restriction for filing a lawsuit or an appeal. According to Section 5 of the Act, a court can extend the time restriction if the person initiating the complaint or appealing can demonstrate a sufficient reason for not filing within the prescribed timeframe. It specifies what should be included and excluded for calculating the limitation period.
The term’sufficient cause’ is not defined in the Limitation Act. It is determined by the facts of each case, and courts have the ability to determine what counts as a valid reason for a delay in filing. There are several exceptions, such as applications for executing decrees and orders for which the Act does not provide for condonation.
Examples where condonation is allowed-
- Subsequent modifications in the legislation
- Incarceration of the individual submitting the lawsuit or appeal
- Sickness of the individual filing the appeal, suit or application
- Party is uneducated
- The delay caused by the pending writ petition
- The party belongs to a financially deprived minority group.
Companies Act of 2013 – Excuse for Delay
Section 460 of the Companies Act of 2013 empowers the Central Government to relieve any firm from filing an application within the time frame specified if they are unable to do so.
The Central Government may provide this respite if they are given with written explanations for the delay. If a corporation is exempted from filing an application or document, it must submit the applicable paperwork within the time frame specified by the Central Government.
Furthermore, in granting the reprieve, the Central Government may impose whatever restrictions it sees fit. According to Section 460(b) of the Act, if a document that is supposed to be filed with the Registrar is not presented within the specified time limit, the Central Government may pardon the delay based on the reasons indicated in writing.
Procedure Regarding the Condonation of Delay
If a corporation fails to submit an application or document on time, it must request permission from the Central Government to submit the documentation late under Section 460.
The procedure is as follows:
- To authorise the request for leniency to be sent to the Central Government, the corporation must conduct a board meeting and vote. Permit a Company Secretary, Chief Financial Officer, or any firm director to make an application to the Central Government.
- The corporation must submit a Form CG-1 to the Central Government requesting an extension, together with a copy of the board resolution accepting the application and other required papers.
The proposal will be carefully reviewed by the Central Government before it is approved or denied. The directive of the Central Government must be filed with the Registrar using Form INC-28, along with the necessary documentation and payment. The documentation granted an extension, as well as the fee and registration of Form INC-28, must be included in the submission.
To excuse companies’ tardiness, the Central Government has created programmes such as the Company Law Settlement Scheme, 2014, the Condonation of Delay Scheme, 2018, the Companies Fresh Start Scheme, 2020, and the Limited Liability Partnership Settlement Scheme, 2020, using its powers under Section 460.
These plans accepted the extension and permitted firms to submit their annual documentation after the deadline with little or no penalty. They were, however, only accessible for a short time, generally one year, during which corporations might take advantage of the plan and transmit overdue paperwork to the Registrar.
Under Income Tax Act, 1961- Condonation of Delay
After the required time limit has passed, the Central Board of Direct Taxes (CBDT) has the jurisdiction to accept applications or claims for deductions, exemptions, refunds, or other reliefs under the Income Tax Act as ITR filings. If the CBDT deems it necessary to avoid genuine hardship for a party, it may approve an income tax body to accept a delayed claim.
To be accepted, it must be demonstrated that it was beyond the taxpayer’s control to file the claim within the set period.
The law provides an equitable remedy for delay condonation. It is a discretionary remedy that should be used with caution. It is a helpful remedy for the party who has failed to meet contractual commitments within the time frame specified.