Loss return: Condonation of delay in filing: Power of CBDT: Section 119 of Income-tax Act, 1961: A.Ys. 2000-01 and 2002-03: Genuine hardship to an assessee: Meaning of: Loss of about Rs.1,500 crores, if not allowed to be carried forward, it would cause genuine hardship to it in successive assessments: Order of CBDT for fresh adjudication.

The assessee, an organisation fully-owned and aided by the Government of Madhya Pradesh, was engaged in business of power. For the relevant assessment years, it filed its returns of income declaring certain loss after a delay of 16 months and filed an application before the CBDT for condonation of the delay, contending that as per the provisions contained in the M.P. Re-organisation Act, 2000, the erstwhile State of Madhya Pradesh and the assessee-Board, both were bifurcated and because of that reason, returns could not be filed in time. The CBDT rejected the assessee’s contention and declined to condone the delay.

On a writ petition filed by the assessee challenging the order of the CBDT, the Madhya Pradesh High Court set aside the order of the CBDT for fresh determination and held as under:

“(i) In the instant case, as per the return filed by the assessee, there was a loss of Rs.1,500 crores in the accounting year 1999-2000. If the return filed by the assessee was not accepted by the Department, then the loss suffered by it could not be carried forward and it would cause hardship to it in successive assessments.

(ii) From the perusal of the impugned order, it was apparent that the CBDT had not considered that aspect of the matter which was having a material bearing in the matter and ought to have been considered by the CBDT while considering the question of condonation of the delay in filing the return. Though there was a delay of nearly 16 months in filing returns by the assessee before the Department, but in the peculiar facts of the case, the delay ought to have been dealt with by the CBDT in proper perspective, but it appeared that the said aspect had escaped from the notice of the CBDT.”