Balaji Landmarks LLP v. CBDT

Case snapshot

Sections / provisions: 119(2)(b); 139; 153(1B); 72; 80

Questions before the Court / Tribunal

• Condonation of delayed loss return due to professional advice: The reported High Court decision condones a five-month delay in filing a loss return where the delay arose from bona fide professional advice on a complex compensation issue and denial would cause genuine hardship.

Material facts and background

passed by Respondent No. 1, rejecting the Petitioner’s Application for condonation of delay in filing its return of income for the Assessment Year 2018-19. The Petitioner is also seeking appropriate directions/orders to get

in which return an Assessee was returning a loss, under Section 139(3) read with Section 139(1) of the Income Tax Act, 1961 ( for short “the Act”) was 31st October 2018. The Petitioner, however, filed its return belatedly on 30th March 2019 within the time permissible under Section 139(4). Accordingly, the Petitioner on 15th June 2023, in light of Respondent No.1’s Circular No. 9 of 2015, filed an application for condonation of delay of 5 months under Section 119(2)(b) of the Act. This Application was filed by the Petitioner within the time stipulated in the said Circular, i.e. within a period of 6 years.

as the return of income was filed by the Petitioner beyond the due date of 31st October 2018, the Petitioner is deprived of claiming the carry forward losses suffered in A.Y. 2018-19 to the subsequent years as a result of the delay in filing of its return. This deprivation, according to the Petitioner, is causing hardship thereby, satisfying the pre-condition of Section 119(2)(b) of the Act. Therefore, it is submitted that the delay ought to be condoned so as to treat the Petitioner’s return of income for A.Y.2018-19 as within limitation period.

Appellant / assessee submissions

In response, the learned Counsel for the Petitioner submitted

deserves to be allowed. We find merit in the arguments raised by the learned Counsel for the Petitioner that grave hardship will be suffered by the Petitioner if the delay is not condoned as genuine losses will not be permitted to be carried forward. The delay in the present case is not due to any negligence on the part of the Petitioner but due to inadequate advice by the Chartered Account, which fact stands admitted by him in his affidavit. It is settled law that where an Assessee takes a course of action bases on an opinion of a professional, then, in that case, there is a reasonable cause for the Assessee to act based on such advice and that such acts are to be regarded as bona fide. In the present case, the Petitioner ought not to be put to a considerable disadvantage as a result of belated advice given to it by the Chartered Accountant, especially when the issue that was being grappled with is fairly complex and for which there were no well settled judicial precedents at the relevant time. In fact, paragraph 3 of the impugned order states : “The field authorities have stated that it may be possible that

We had also put it the learned Counsel for the Petitioner as to

Revenue / respondent submissions

The learned Counsel for the Respondent, however, opposes the

control in filing the ROI within the due date. The field authorities have further stated that a more diligent and disciplined taxpayer may have sought the legal opinion on time and could have filed its ROI within the due date, more so, if it wanted to carry forward the losses of the A.Y.2018-19 to subsequent years”. The Petitioner will otherwise suffer genuine hardship in such a case. Further, the apprehension of the learned Counsel for the Revenue is appropriately taken care of by the provisions of Section 153(1B) of the Act. The AO will have 12 months from the end of 31st March 2026 to complete an assessment, i.e. he will have time till 31st March 2027 to frame an assessment under Section 143/144 of the Act in accordance with law.

Court / Tribunal analysis and reasoning

as the return of income was filed by the Petitioner beyond the due date of 31st October 2018, the Petitioner is deprived of claiming the carry forward losses suffered in A.Y. 2018-19 to the subsequent years as a result of the delay in filing of its return. This deprivation, according to the Petitioner, is causing hardship thereby, satisfying the pre-condition of Section 119(2)(b) of the Act. Therefore, it is submitted that the delay ought to be condoned so as to treat the Petitioner’s return of income for A.Y.2018-19 as within limitation period.

Petition and contends that the Petitioner was negligent and, hence, the delay ought not be condoned. He further submits that the various claims made by the Petitioner in its return of income are also unverified and as such the condonation of delay, if allowed, would result in allowance of such unverified claims. According to him, the time limit to carry out an assessment for A.Y. 2018-19 has otherwise expired and, therefore, the delay ought not to be Page 4 of 9 OCTOBER 14, 2025 Santosh Chabukswar- Court Steno

deserves to be allowed. We find merit in the arguments raised by the learned Counsel for the Petitioner that grave hardship will be suffered by the Petitioner if the delay is not condoned as genuine losses will not be permitted to be carried forward. The delay in the present case is not due to any negligence on the part of the Petitioner but due to inadequate advice by the Chartered Account, which fact stands admitted by him in his affidavit. It is settled law that where an Assessee takes a course of action bases on an opinion of a professional, then, in that case, there is a reasonable cause for the Assessee to act based on such advice and that such acts are to be regarded as bona fide. In the present case, the Petitioner ought not to be put to a considerable disadvantage as a result of belated advice given to it by the Chartered Accountant, especially when the issue that was being grappled with is fairly complex and for which there were no well settled judicial precedents at the relevant time. In fact, paragraph 3 of the impugned order states : “The field authorities have stated that it may be possible that

why the application under Section 119(2)(b) was filed only on June 15, 2023, i.e. more than four years after the return was filed. The learned Counsel had clarified that initially, that the Petitioner was not aware of the procedure of 119(2)(b) and profits of A.Ys.2019-20, 2020-21 and 2021-22 were not enough to adjust the huge losses of A.Y.2018-19 amounting to Rs.4,47,30,811/-. Basis the forecasts then prevailing the Petitioner was not anticipating the loss for the A.Y. 2018-19 being set off within a period of eight years and, therefore, even if the condonation of delay in filing the loss return was allowed, the determination of the loss pursuant to the belated return may have turned out Page 7 of 9 OCTOBER 14, 2025 Santosh Chabukswar- Court Steno

Operative decision and relief

The impugned Order dated 7th August 2024 passed by Respondent No. 1 under Section 119(2)(b) of the Act is hereby quashed and set aside.

Petition is also disposed of in terms thereof. However, there shall be no order as to costs.

Authorities and precedents appearing in the judgment

• No reliable precedent list was extracted automatically; use the full judgment for the citation chain.

This list is machine-assisted from the judgment text and is not a substitute for checking the full citation chain in the PDF.

Ratio and legal principle

The decision turns on Condonation of delayed loss return due to professional advice. The operative result is classified as Quashed Or Set Aside. Read the rule only with the statutory version, factual findings and precedent chain recorded in the full judgment.

Why this judgment matters

The case is relevant to taxpayers, advisers and litigators dealing with Condonation of delayed loss return due to professional advice. Its practical value lies in the interaction between the statutory text, the evidentiary record and the procedural route followed in this case.

Practitioner action points

• Keep registration, audit-report, Form 10/10B/10BB and filing timestamps together; many exemption disputes are procedural and depend on when the form existed versus when it was uploaded.
• For litigation, attach the full judgment/order to the working paper and cite the paragraph/page supporting the proposition rather than relying on a headnote alone.

Full judgment and source trail

Read / download the clean local judgment copy

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