The phrase 'genuine hardship' must be interpreted liberally

CA V.K. Subramani

Filing ITR of every year is an annual compliance requirement under the law. The end result of the business activity may be 'profit' or 'loss'. In the case of 'loss' filing of ITR before the 'due date' entitles the taxpayer to carry forward the same to subsequent years and adjust such 'loss' against 'income'. It is like forward adjustment. But it is more rational that when the assessee incurs 'loss' the system should give refund out of tax paid in the past years to help him overcome the distress. May be, like restriction on carry forward, the backward adjustment also may be limited to some number of years. There could be a tendency among the tax payers to recover past paid taxes if such system is in place and perhaps because of that, the law does not provide for such back years' adjustment referred earlier.

Section 119(2)(b) says that the Board may if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorize any income-tax authority (other than CIT (Appeals)), to admit an application or claim for any exemption, deduction, refund or any other relief under the Act after the expiry of the period specified by or under the Act for making such application or claim or deal with the same on merits in accordance with law.