Gujarat High Court Allows Condonation of Delay in Income Tax Filing for Cooperative Society

Mahernagar Co-Op. Housing Service Society Ltd. granted relief due to audit completion delays, can file fresh return for A.Y. 2018-19

In a significant ruling, the Gujarat High Court has allowed the Mahernagar Co-Op. Housing Service Society Ltd. to condone a 29-day delay in filing its income tax return for the assessment year 2018-19. The delay was attributed to the late appointment of an auditor and subsequent delay in audit completion. The judgment was delivered by a bench comprising Justice A.S. Supehia and Justice Pranav Trivedi on November 10, 2025.

The petitioner, Mahernagar Co-Op. Housing Service Society Ltd., faced a predicament due to the non-appointment of an auditor until October 31, 2018, which delayed the audit report's completion until March 2019. Despite filing its return on November 29, 2018, the society's application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961 was initially rejected by the Chief Commissioner of Income Tax, Surat.

The society argued that the delay constituted a genuine hardship, invoking Circular No.13 of 2023, which provides relief in cases where audit completion delays prevent timely filing of returns. The court agreed with the petitioner's contention, noting that the audit report was prepared for a consolidated period from April 2014 to March 2018, and the facts were undisputed by the respondent department.

The respondent, represented by Senior Standing Counsel Mr. Karan G Sanghani, contended that the society was a habitual late filer and had failed to establish genuine hardship. However, the court found that the provisions of Circular No.13 of 2023, specifically paragraph 6(ii), were applicable and supported the petitioner's case for condonation of delay.

The judgment quashed the rejection order dated June 27, 2024, and the intimation order dated May 16, 2019, under section 143(1) of the Act. The petitioner is now allowed to file a fresh return of income within one month for the assessment year 2018-19.

This ruling underscores the importance of procedural fairness and the application of statutory provisions that address genuine hardships faced by taxpayers due to circumstances beyond their control.

Bottom Line:

Income Tax - Delay in filing return of income caused by delay in audit completion - Circular No.13 of 2023 provides relief for condonation of delay in such circumstances.

Statutory provision(s): Sections 119(2)(b), 139(1), 80P, Circular No.13 of 2023

Mahernagar Co-Op. Housing Service Society Ltd. v. Chief Commissioner of Income Tax, Surat, (Gujarat)(DB) : Law Finder Doc Id # 2808411