The assessee filed a ‘Nil’ return on behalf of her husband with an application for condonation of delay in terms of s. 119(2)(b). The Pr. CIT rejected the application because the assessee had not established that the land in question was agricultural land and further, had not produced relevant evidence of fulfilment of conditions specified in section 10(37)(ii).

Held that though the Circular authorizes Pr. CIT to consider even merits of refund claim while exercising delegated power u/s. 119(2)(b), this was illegal for the mandate of the Act cannot be avoided through any administrative circular issued by the Board. Since Pr. CIT had gone into merits of the claim for refund when the application u/s.119 (2) was filed for condonation of delay in preferring said refund claim and a decision on merits on delay condonation application had not been taken by Pr. CIT, matter remitted for fresh consideration. (AY. 2012-13)