INCOME TAX: Where assessee’s revision petition under section 264 was dismissed on ground that assessee had not applied for revision within limitation time prescribed and there was delay of more than two years, Legislature had conferred power on Principal Commissioner to condone delay under section 119 to enable authorities to do substantive justice to parties by disposing matter on merits, impugned delay was to be condoned and matter was to be decided on merits
[2024] 161 taxmann.com 383 (Bombay)
HIGH COURT OF BOMBAY
Pankaj Kailash Agarwal
v.
Assistant Commissioner of Income-tax*
K. R. SHRIRAM AND DR. NEELA GOKHALE, JJ.
WRIT PETITION (L) NO. 7783 OF 2024
APRIL 8, 2024
Section 119, read with section 264, of the Income-Tax Act, 1961 – Income-tax authorities – Power to make orders, etc. (Condonation of delay) – Assessment year 2016-17 – Assessee filed his return of income claiming deduction under section 80-IC – On processing of return under section 143(1), Assessing Officer denied said deduction – Assessee filed rectification application under section 154 – Thereafter, when assessee realized that audit report in Form 10CCB was not uploaded online which could be reason for denial of deduction under section 80-IC, assessee uploaded said audit report in Form 10CCB – Despite repeated reminders, Assessing Officer did not dispose of said rectification application – Assessee filed application under section 264 which was rejected on ground that assessee had not applied for revision within limitation time prescribed and there was delay of about more than two years – Assessee filed an application under section 119(2)(b) to condone such delay – Whether legislature had conferred power on Principal Commissioner to condone delay to enable authorities to do substantive justice to parties by disposing matter on merits and routinely passing order without appreciating reasons why provisions for condonation of delay had been provided in Act, defeated cause of justice – Held, yes – Whether, therefore, delay in filing revision petition by assessee was to be condoned and matter was to be remanded back for fresh consideration on merits – Held, yes [Paras 13 and 14] [In favour of assessee]
Circulars and Notifications: Circular No. 669, dated 25-10-1993 and Circular No. 689, dated 24-8-1994
In a recent judgment, a High Court ruled in favor of the assessee by condoning the delay in filing a revision petition when the denial of a deduction was attributed to the inadvertence of the Chartered Accountant (CA). The court recognized that taxpayers often rely on professional advice for compliance with complex tax laws, and errors by such professionals should not unfairly prejudice the taxpayer’s rights. This decision underlines a critical principle of justice in tax proceedings—equity and fairness. By allowing the condonation of delay, the court has emphasized that procedural lapses, when caused by genuine mistakes of trusted advisors, should not result in substantive detriment to the taxpayer. This judgment offers relief to taxpayers who, despite their intentions to comply with the law, may fall victim to professional oversight. It reinforces the responsibility of tax professionals while protecting the rights of the taxpayer in the face of unintentional errors. Such a ruling may encourage meticulousness among tax professionals, knowing that their errors could lead to judicial leniency toward their clients, which, in turn, could affect professional reputations – JSPCO
