CONDONE DELAY - SC CASE

CONDONE DELAY - SC CASE

CIT Vs west Bengal infrastructure Devel corp, SC

Courts not to dismiss petitions of revenue authorities only due to delay, without going into Merits of case.


CONDONE DELAY Danny Denzongpa
In matters giving benefit to assessee, dept must avoid Technical Approach - HC relief for actor Danny Denzongpa


Court : Bombay High Court

Brief : The Bombay High Court has directed the income tax commissioner to reconsider the applications of Bollywood actor Danny Denzongpa alias Tshering Pintso for tax exemptions on dividends and interests since 1997-98 under section 10(26AAA) as incorporated in the Finance Act, which entitled tax exemptions to Sikkimese nationals on dividends and interest on securities. A division bench of the high court has set aside the order passed by the income-tax commissioner rejecting nine applications filed by Denzongpa seeking the exemptions as per the amendment to the Finance Act in 2008.

Citation : Danny Denzongpa (Alias Tshering Pintso) Versus Commissioner of Income Tax & Others

Judgement :
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
• Danny Denzongpa Alias Tshering Pintso) VERSUSCommissioner of Income Tax
• WRIT PETITION NO.1549 OF 2010, 1550 OF 2010, 1552 OF 2010, 1554 OF 2010, 1555 OF 2010, 1561 OF 2010, 1641 OF 2010, 1658 OF 2010
• DATE: ¬ 20thSeptember, 2010
• JUDGMENT (PER SHRI R.M.SAVANT)
1 Rule. With the consent of the parties made returnable forthwith and heard.
2 The above Writ Petition and the companion writ Petitions challenge the orders all dated 04/03/2010 rejecting the applications filed by the Petitioner under Section 264 of the Income Tax Act, 1962 (brevities sake referred to as the said Act) in respect of the Assessment years covered by each of the petitions. Since the orders passed under Section 264 of the said Act are identical and since the Petitions involving a common question, they are all heard together and disposed of.
3 The facts as disclosed above in each of the Petitions are as under:
The Petitioner is an Indian National of Sikkimese origin. The Petitioner’s profession is acting in flims. The Petitioner’s original name is Tshering Pintso. The subject matter of the above Petitions are the Assessment Year 1997¬-98 to 2005¬-06. The Petitioner is seeking certain benefits which have been conferred on account of insertion of Section 10(26 AAA) by the Finance Act, 2008, which has been incorporated with retrospective effect from 1¬/4¬/1990. The Petitioner’s assessment was completed for the relevant years and an order under Section 143(1) of the said Act has already been passed accepting total income mentioned by the Petitioner for each of the said Assessment Years.
4 Since the Applications have been filed by the Petitioner under Section 264 of the said Act. In view of the introduction of Section 10 (26 AAA) in the said Act, it would be gainful to refer to the said provision:
“(26AAA) in case of an individual, being a Sikkimese, any income which accrues or arises to him¬¬¬
(a) from any source in the State of Sikkim; or
(b) by way of dividend or interest on securities;
Provided that nothing contained in this clause shall apply to a Sikkimese woman who, on or after the 1st day of April 2008, marries an individual who is not a Sikkimese.
Explanation ¬¬¬ For the purposes of this clause, “Sikkimese” shall mean
(i) an individual, whose name is recorded int he register maintained under the Sikkim Subject Rules, 1961 (hereinafter referred to as the “Register of Si[kkim Subjects”), immediately before the 26th day of April, 1975; or
(ii) an individual, whose name is included in the Register of Sikkim Subjects by virtue of the Government of India Order No.26030/36/90¬I.C.I., dated the 7th August, 1990 and order of even number dated the 8th April, 1991; or
(iii) any other individual, whose name does not appear in the Register of Sikkim Subjects, but it is established beyond doubt that the name of such individual’s father or husband or paternal grand¬father or brother from the same father has been recorded in that register;]
5 The said provision has been inserted with retrospective effect from 1¬/4/¬1990 by the Finance Act 2008, which received the assent of the President received on 10¬/5/¬2008. The said fact is relevant in the context of the issue, which arise for consideration in present Petitions. In terms of the saidprovision, the Petitioner being of Sikkimese origin claimed that the amounts that he has received as and by way of dividend and interest in each of the Assessment Years, would be exempt from tax by virtue of newly inserted provision. In so far as the above Writ Petition No.1549 of 2010 is concerned, the dividend amount is Rs.26,73,023/¬ and the interest is Rs.1250/¬ for the Assessment Year 2002¬2003. The said amounts vary in order of the above Petitions.
6 The Petitioner accordingly sought to claim benefit of the said provision and filed an Application under Section 264 of the said Act on 4/¬9¬/2008. To the said application, the Petitioner appended the certificate issued by the Land Revenue Department, Government of Sikkim stating that the Petitioner is a Sikkimese subject and registered under Sikkim Subject Register at Sr. No.741 as also certificate issued by the Sub Divisional Magistrate (Adm.), Gyalshing, West Sikkim, disclosing that the Petitioner owns landed property bearing holding No.5 plot no.91 admeasuring are 8860 hectare situated at Yuksam and that he is the Schedule Tribe belonging to Bhutia Community.
Similar applications were filed by the Petitioner up to the Assessment Year 2005¬2006. Since there was a delay in filing the Applications, the Petitioner filed another application for condonation of delay, in the said applications under Section 264. The reasons for the delay were also stated in the saidapplications for the consideration of the authority to which the said applications were made, namely theCommissioner of Income Tax who had powers under Section 264 of the said Act, for condonation of delay. The said Applications were considered by the Commissioner of Income Tax¬II and by the impugned orders all dated 4¬/3¬/2010, the Commissioner rejected the said Applications. The Commissioner has recorded the fact that the applications were filed pursuant to the introduction of Section 10(26 AAA) of the said Act,which has come into effect with retrospective operation from 1¬4¬1990 and, therefore, the assessee could apply for the said assessment year as also for the subsequent Assessment Years. Though the Commissioner accepted the fact of the introduction of Section 10(26 AAA) from 1/4-/1990, the Commissioner observed that he is unable to entertain the Petition beyond the time limit prescribed in the said Act. The relevant excerpt of the impugned order is reproduced hereunder.
“ Although the amendment has necessitated this petition, the undersigned is unable to entertain this petition beyond the time limits prescribed in the Act. Moreover, there is nothing on the record to show, that there is a mistake apparent from records with reference to the order sought to be revised, by the assessee.
 
7 We have heard the Learned Counsel for the Petitioner Shri Shivram and the Learned Counsel for the Respondents Shri D.K.Kamwal. The Learned Counsel for the Petitioner advanced submissions as to why the Petitioner is entitled for condonation of delay whereas the Learned Counsel forthe Respondents advanced submissions to the contrary. In the light of the submissions made by the Learned Counsel, it would be apposite to reproduce the relevant provisions of Section 264(6) of the said Act i.e. the provisions under which the Commissioner is vested with the powers to condone the delay. The same is reproduced hereunder:
“In the case of an application for revision under this section by the assessee, the application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, whichever is earlier:



Provided that the Commissioner may, if he is satisfied that the assessee was prevented by sufficient cause from making the application within that period, admit an application made after the expiry of that period.



The reading of the said provision, therefore, discloses that if the Assessee was prevented by sufficient cause from making the application within the period prescribed and the Commissioner is satisfied with the reasons given by the Assessee for not filing the said application within the period prescribed, he may admit the application made after expiry of a period. Indubitably in the instant case, the Application under Section 264 came to be filed by the Petitioner on account of the introduction of Section 10(26AAA) which came into operation with retrospective effect from 1/¬4¬/1990. By the said provision the assessee, who is a Sikkimese by origin, was entitled to certain benefits, obviously there seem to be a rational in introducing the said provisions as may be the Government was of the view that the said benefit is required to begranted for the upliftment of the people of Sikkimese origin. There can be no dispute that the Finance Act by which the said provision was introduced, received the assent of the President on 10¬/5¬/2008. The Petitioner has made an application immediately after a period of four months of the said Finance Act,receiving assent of the President. The reasons as to why the Petitioner did file the applications at the said point of time, have been mentioned by the Petitioner in the applications for each of the Assessment Years. However, as can be seen from the impugned order, the Commissioner has not even adverted to the reasons mentioned by the Petitioner in the application of condonation of delay and has in a cryptic manner rejected the said Application by observing that he is unable to entertain the Petitioner beyond the time limit prescribed. Once the Commissioner is vested with the power of Condonation of delay, then it is incumbent upon the Commissioner to take into consideration the reasons mentioned by the Assessee seeking condonation of delay. A reading of the impugned order, however, does not indicate that the reasons mentioned by the Petitioner have been considered. In fact, the said reasons have not even been adverted to by the Commissioner. In matters of this kind, wherein a benefit is sought to be given to an assessee that too with retrospective effect, a highly technical and pedantic approach is required to be eschewed and approach which furthers the intent and purport of the legislation is required to be adopted.
8 Though in the normal circumstances, for the reasons mentioned herein above, we would have set aside the orders and remanded the matter back to the Commissioner for a denovo consideration, however, for the reasons which we have mentioned herein above, we do not deem it appropriate to do so and, therefore, allow these Petitions by making the Rule absolute in terms of prayer clauses (a) and (b).
(R.M.SAVANT,J.) (V.C.DAGA,J.)