Nearly 5-Year Delay in Filing Defective ITRs Due to Financial Hardship: Bombay HC Allows Condonation on Condition

The Bombay High Court condoned a five-year delay in rectifying defective income tax returns, accepting the taxpayer's financial hardship justification but imposing strict conditions. The petitioner demonstrated that severe business losses and medical emergencies prevented timely compliance from 2017-2022. While granting relief, the court mandated: (1) payment of 50% of disputed tax upfront, (2) submission of all pending returns within 30 days, and (3) no further delay requests for five years. This balanced approach recognizes genuine difficulties while safeguarding revenue interests. The judgment provides a framework for handling extreme delay cases where taxpayers establish bona fide impediments through documented evidence. Tax professionals note this creates an important precedent for similarly situated taxpayers facing technical rejections due to prolonged financial crises.