A Condonation of Delay in the filing of Return of Income is a special dispensation provided by the Income Tax Department to taxpayers who have failed to file their income returns within the prescribed date. It allows taxpayers to file their returns without fearing any late fees. Read this blog to know more.
In India, courts may grant leniency for tardiness in submitting legal claims or petitions. This same leniency may be applied if and the taxpayer wishes to submit past returns.
The Income Tax Department considers various factors before granting a Condonation of Delay, and the taxpayers must provide detailed information and valid reasons for the delay. Condonation of delay excuses a person of the legal consequences of not meeting the prescribed time limit for filing an appeal, suit, or application.
By accepting a petition for condonation of delay, the court or authority acknowledges that the person could not file within the required timeframe and allows them to proceed regardless.
This is usually done in cases where the delay is due to circumstances beyond the petitioner’s control, such as illness or a natural disaster. Depending on the court or authority, there may be a fee for filing the petition, and the petitioner may need to provide evidence of their circumstances.
Depending on the nature of the case, the court or authority may also require the petitioner to explain why the delay was reasonable and why the petition should be accepted.
If the petition is accepted, the petitioner will be allowed to proceed with their case, usually with no further consequences. Condonation of delay can help ensure that justice is served and those affected by a delay are not unduly penalised for circumstances beyond their control.
A delay occurs if a suit or application is not submitted within the time frame specified by the law. In some cases, however, the person may be able to request an exception to this time limit, known as condonation of delay. This is a solution available to someone who has not brought their case to the court or other authority in the period prescribed by the law.
The respective laws allow excuses for the lateness of lawsuits, appeals, and applications in certain cases. Suppose the person filing the appeal, suit or application can provide a valid reason for why the limitation period has passed. In that case, the court or relevant body may forgive the delay and accept the suit.
Under Limitation Act, 1963 – Condonation of Delay
The Limitation Act, 1963, sets the time limit for filing a suit or appeal. Section 5 of the Act states that a court can extend the time limit if the individual filing the suit or appeal can demonstrate a valid reason for not filing within the designated period. It outlines what is to be included and excluded in the calculation of the limitation period.
The meaning of ‘sufficient cause’ is not set out in the Limitation Act. It is based on the individual circumstances of each case, and judges have the authority to decide what qualifies as a sufficient reason for a delay in filing. Exceptions to this exist for applications for enforcing decrees and orders, for which the Act does not provide for condonation of delays.
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.
Under Companies Act, 2013 – Condonation of Delay
Section 460 of the Companies Act, 2013 allows the Central Government to excuse any company from filing an application within the time prescribed if they cannot do so.
The Central Government can grant this reprieve if they are provided with reasons for the delay, which must be documented in writing. If a company is excused from filing an application or document, the company must submit the relevant document within such period as may be prescribed by the Central Government.
Furthermore, the Central Government can impose such conditions as they deem fit while granting the reprieve. Under Section 460(b) of the Act, if any document that is meant to be filed to the Registrar is not submitted within the designated time frame, the Central Government can excuse the delay based on the reasons they recorded in writing.
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Under Income Tax Act, 1961- Condonation of Delay
The Central Board of Direct Taxes (CBDT) has the authority to allow applications or claims for deductions, exemptions, refunds or other reliefs under the Income Tax Act to be ITR filings after the prescribed time limit has expired. If the CBDT finds it appropriate to prevent genuine hardship of a party, they can authorise an income tax authority to accept a delayed claim.
For the claim to be accepted, it must be demonstrated that it was out of the taxpayer’s control to claim within the established deadline.
When is Condonation of Delay Permissible?
Understanding the nuances of condonation of delay is essential, especially when considering the specific instances where it is permissible. Let’s look into the circumstances that warrant the extension of timelines under various statutes:
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Amendments to Laws
- Scenario: Amendments to laws have occurred since their inception.
- Permissibility: Condonation of delay is permissible when legislative changes impact the timelines originally set forth.
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Individuals Behind Bars
- Scenario: Individuals responsible for filing the suit are behind bars or imprisoned.
- Permissibility: Delays arising from the incarceration of individuals warrant condonation, recognising the constraints on their ability to adhere to deadlines.
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Illness of the Filer
- Scenario: The individual responsible for filing the suit is ill.
- Permissibility: Condonation is allowed when the filer’s health impedes the timely submission of necessary documents or legal actions.
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Involvement of Pardanashin Woman
- Scenario: The party involved is a pardanashin woman practising seclusion.
- Permissibility: Recognising the unique challenges faced by such women, condonation of delay is permissible, acknowledging their restricted access to legal processes.
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Illiteracy as a Hurdle
- Scenario: The party or individual is illiterate.
- Permissibility: Delays arising due to illiteracy are considered, allowing for condonation to ensure fair access to legal remedies.
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Pending Writ Petition
- Scenario: The delay is because the writ petition filed by the party is pending.
- Permissibility: While awaiting the resolution of a related petition, condonation of delay is permissible, acknowledging the connected legal proceedings.
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Financially Weak Minority Group
- Scenario: The party involved belongs to a financially weak minority group.
- Permissibility: Condonation is permissible when financial constraints impede adherence to legal timelines, ensuring equitable access to legal remedies.
General Principles of the Condonation of Delay
In the legal realm, the principles governing the condonation of delay are pivotal to maintaining a balance between jusice and procedural adherence. The Supreme Court, in the landmark case of Collector Land Acquisition v. Mst. Katiji, established essential guidelines for the application of this doctrine.
1) No Inherent Benefit in Late Appeals
- Principle: Ordinarily, a litigant does not stand to benefit by instituting an appeal late.
- Implication: Late appeals are not inherently advantageous, emphasising the need for adherence to timelines in legal proceedings.
2) Consequences of Non-Condonation
- Principle: Refusing to condone delay may lead to discarding a meritorious matter, defeating the roots of justice.
- Implication: Non-condonation risks dismissing a case without considering its merits, underscoring the importance of procedural flexibility.
3) Rational Application of ‘Every Day’s Delay Must be Explained’
- Principle: The dictum ‘Every day’s delay must be explained’ should not be applied irrationally.
- Implication: This principle emphasises a sensible, context-aware application rather than a literal interpretation, ensuring fairness in the process.
4) Preferential Treatment for Substantial Justice
- Principle: Between substantial justice and technical considerations, the former deserves preference.
- Implication: Prioritising substantial justice over technicalities ensures that decisions are based on evidence rather than rigid procedural grounds.
5) Absence of Presumption of Deliberate Delay
- Principle: There is no presumption that delay is caused deliberately.
- Implication: Acknowledging that litigants have nothing to gain from intentional delays, this principle reinforces the need for a fair evaluation of circumstances.
6) Risks in Delay:
- Principle: Litigants run a serious risk by resorting to delay.
- Implication: Recognising the inherent risks, this principle discourages intentional delays, reinforcing the seriousness of legal proceedings.
Procedure Regarding the Condonation of Delay
If a company does not submit an application or document on time, it must ask the Central Government for permission to submit the paperwork late through Section 460.
The Procedure is as follows:
- The company must hold a board meeting and pass a vote to approve the request for leniency to be sent to the Central Government. Grant permission to a Company Secretary, Chief Financial Officer, or any firm director to apply to the Central Government.
- The company must request an extension from the Central Government on Form CG-1, enclosing a copy of the board resolution approving the application and other necessary paperwork.
The Central Government will carefully examine the application and decide whether to approve or deny it. The Central Government’s directive must be filed with the Registrar using Form INC-28, submitting the relevant documents and payment. The documents that have been granted an extension must be included in the filing, along with the fee and registration of Form INC-28.
The Central Government, by its powers under Section 460, has created programs like the Company Law Settlement Scheme, 2014, the Condonation of Delay Scheme, 2018 Companies Fresh Start Scheme, 2020, and the Limited liability partnership Settlement Scheme, 2020, to excuse the tardiness of companies.
These plans accepted the postponement and allowed businesses to submit their yearly documents beyond the required time frame with minimal or no penalty. However, they were only available for a limited time, usually one year, during which companies could benefit from the plan and send the overdue documents to the Registrar.
Conclusion
Condonation of delay is an equitable remedy provided by law. It is a discretionary remedy and should be exercised judiciously. It is a beneficial remedy for the party who has failed to comply with the contractual obligations within the stipulated time.
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Frequently Asked Questions
What types of applications or submissions can be considered for Condonation of Delay?
Applications related to legal actions, submissions, or filings that exceed prescribed timelines can be considered for Condonation of Delay. This applies to various legal proceedings, ensuring fairness in exceptional circumstances.
Is there a specific time frame within which one should apply for Condonation of Delay?
While there is no fixed time frame, it is advisable to apply for Condonation of Delay at the earliest opportunity. Timeliness in submission strengthens the case, and delays should be justified with valid reasons.
What documentation is required when applying for Condonation of Delay?
Necessary documentation includes a detailed explanation of the delay, supporting evidence, and any relevant legal documents. A clear and comprehensive account of the reasons for delay enhances the chances of successful condonation.
Are there any specific reasons or circumstances that are generally accepted for granting Condonation of Delay?
Accepted reasons include subsequent changes in the law, illness, imprisonment, belonging to specific vulnerable groups, financial constraints, illiteracy, and other substantial grounds such as court or counsel mistakes.
What is the procedure for submitting an application for Condonation of Delay?
The process involves submitting a formal application explaining the delay, providing supporting documents, and presenting a strong legal argument. Following prescribed formats and procedures specified by the concerned authority is crucial.
What factors are considered by the authorities when deciding on Condonation of Delay applications?
Authorities consider the reasons for delay, the merits of the case, supporting documentation, and whether the delay was intentional. A balanced evaluation ensures that justice prevails, weighing procedural adherence against substantial justice.
Are there any penalties or fees associated with the Condonation of Delay process?
Penalties or fees may be associated with the Condonation of Delay process, varying by jurisdiction and the nature of the legal proceeding. It is essential to be aware of any financial implications during the application.
How long does the Condonation of Delay process typically take, and what steps can be taken to expedite it?
The duration varies, but expeditious processing is possible by promptly submitting a well-documented application. Proactive engagement, adherence to procedural requirements, and addressing concerns raised by authorities can accelerate the Condonation of Delay process.
