KANCHANBEN BHIKHABHAI SHAH vs. PRINCIPAL COMMISSIONER OF INCOME TAX 1

PDF · subscribers
SCA/7188/2018HC GujaratGJHC24027826201810 May 2018Author: HONOURABLE MR. JUSTICE AKIL KURESHI,HONOURABLE MR. JUSTICE B.N. KARIA5 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the Principal Commissioner erred in rejecting the revision petition solely on the ground of an unexplained nine-day delay. While acknowledging that the petitioner did not explicitly provide grounds for the delay, the Court noted that the delay was extremely small. The Court reasoned that the revisional authority, empowered by the proviso to section 264(3) to condone delay for sufficient cause, should have at least put the petitioner on notice to explain the delay before dismissing the petition. The Court emphasized that periods of limitation are for regulating proceedings and ensuring finality, but the clear provision for condoning delay suggests that such rights should not be defeated by minuscule, unexplained delays without an opportunity to rectify. Therefore, the Court condoned the delay and set aside the impugned order, reviving the revision petition for fresh adjudication on merits.

What were the facts?

The petitioner, Kanchanben Bhikhabhai Shah, an individual, filed a revision petition under section 264 of the Income Tax Act, 1961, before the Principal Commissioner of Income Tax. This petition concerned assessment orders for assessment years 2011-12, 2013-14, and 2014-15, where the Assessing Officer had decided against the petitioner regarding depreciation on a cold storage plant, reducing its returnable value by the government subsidy. The revision petition was filed with a delay of nine days. The Principal Commissioner rejected the petition solely on the ground that this delay was not explained, despite the statutory provision allowing condonation of delay for sufficient cause.

What were the issues?

1. Whether the Principal Commissioner was justified in rejecting the revision petition filed under section 264 of the Income Tax Act, 1961, solely on the ground of an unexplained delay of nine days, without affording the petitioner an opportunity to explain the delay, despite the proviso to section 264(3) empowering condonation for sufficient cause? Assessee's Contention: The assessee argued that the delay was minuscule and that the revisional authority, having the power to condone delay under section 264(3), should have at least provided an opportunity to explain the delay rather than summarily rejecting the petition. The assessee relied on the principle that periods of limitation are meant to regulate proceedings and ensure finality, but where a provision for condonation exists, it should be exercised judiciously, especially for minor delays. Revenue's Contention: The judgment does not record any specific contentions made by the revenue.

Which sections of the Income-tax Act were involved?

Section 264

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/SCA/7188/2018 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 7188 of 2018 ========================================================== KANCHANBEN BHIKHABHAI SHAH Versus PRINCIPAL COMMISSIONER OF INCOME TAX 1 ========================================================== Appearance: MR MANISH J SHAH(1320) for the PETITIONER(s) No. 1 MRS MAUNA M BHATT(174) for the RESPONDENT(s) No. 1,2 ========================================================== CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MR.JUSTICE B.N. KARIA Date : 10/05/2018

ORAL ORDER (PER : HONOURABLE MR.JUSTICE AKIL KURESHI)

1.

Petitioner   has   challenged   an   order   dated 26.03.2018   passed   by   the   Principal   Commissioner   of Income   Tax,   rejecting   the   petitioner's   Revision Petition filed under section 264 of  the Income Tax Act, 1961 ('the Act' for short)  on the ground that there   was   no   explanation   of   delay   for   filing   such petition.

2.

Facts in brief are as under.

3.

Petitioner   is  an  individual.    With   respect   to the   petitioner's   returns   for   the   assessment   years 2011­12, 2013­14 and 2014­15, the Assessing Officer had   passed   orders   of   assessment,   in   which,   the question of depreciation on the cold storage plant was   decided   by   the   Assessing   Officer   against   the petitioner.   He held that the return tune value of the cold storage plant must be reduced by the subsidy granted by the Government.

4.

The petitioner filed a Revision Petition before the   Principal   Commissioner   concerning   assessment orders for all these three assessment years.  Period of   limitation   prescribed   under   sub­section   (3)   of section 264 of the Act for filing such petition is of one year from the date of communication or knowledge of   the   order.     With   the   power   of   the   revisional authority   to   condone   delay   on   sufficient   grounds being   made   out,   the   Revision   Petition   came   to   be dismissed   by   the   Principal   Commissioner   by   the impugned order on the ground that delay of nine days was not explained.  He recorded that the assessee has not given any reason, let alone 'sufficient' reason for such delay.

5.

Section 264 of the Act concerns the revisional powers of the Commissioner under sub­section (1) of section   264. The   Principal   Commissioner   or   the Commissioner on an application by an assessee or even on   his   own,   would   call   for   the   record   of   any proceedings under the Act in which any order has been passed and pass such order thereon after carrying out necessary inquiries, as he thinks fit.   Sub­section (3)   of   section   264   provides   for   the   period   of limitation   of   one   year   for   filing   application   for revision   before   the   Commissioner   from   the   date   on which the order was communicated to him or from the date otherwise he came to know of it, whichever is earlier.  Proviso to sub­section (3) further provides that the Principal Commissioner or the Commissioner if he satisfied that the assessee was prevented by sufficient cause from making such application within the   period   prescribed,   admit   the   application   even after expiry of such period.

6.

Sub­section (3) of section 264 of the Act thus while prescribing period of limitation, gives ample power to the Commissioner to accept an application filed beyond such period on sufficient grounds being made out.

7.

In the present case, delay was extremely small. It is true that the petitioner did not set out ground to   explain   such   delay   either   by   filing   a  separate application   or   even   in   the   revision   petition. However, if the Commissioner was of the opinion that even   such  minuscule delay   in   absence   of   any explanation should be fatal to the Revision Petition, list he could have done was to put the petitioner to notice   calling   upon   her   to   explain   delay   or   face dismissal   of   the   Revision   Petition.   Period   of limitation   for   perusing   remedies   is   provided   under the statute to regulate the proceedings and to ensure finality beyond a reasonable period.   Wherever the legislation   desires   that   the   period   of   limitation should be non­extendable, the intention is manifest in   clear   terms.     In   the   present   case,   there   is   a clear provision for condoning the delay.   Defeating the right of revision on the ground of unexplained delay in facts of the present case, could have been avoided by allowing the petitioner to file additional statement explaining such delay.   When the delay is extremely small, we condone the same.

8.

Impugned   order   dated   26.03.2018   is   set   aside. Revision   Petition   is   revived   and   placed   back   for fresh adjudication and disposal on merits.  Petition is disposed of. (AKIL KURESHI, J) (B.N. KARIA, J) ANKIT SHAH

More judgments on Section 264

All 338 judgments and leading authorities on Section 264 →

Recent GST High Court judgments

Search GST case law →