TMI Blog2004 (6) TMI 26X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Constitution is the order dated November 21,1995 (annexure "A"), passed by the Commissioner of Income-tax, Rajkot, rejecting the petitioner's application for condonation of delay in filing the revision petitions under section 264 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), on the ground that the petitioner had not shown sufficient cause for condonation of the delay. The relevant assessment years are 1982-83, 1983-84 and 1984-85. For the said years, the petitioner filed its returns of income claiming depreciation on the assets acquired by it. The claim was granted. However, the Assessing Officer rectified those orders under section 154 of the Act and passed two separate rectification orders dated September 5,1986, for the assessment years 1982-83 and 1983-84. Similarly, the Assessing Officer passed rectification order dated December 11, 1986, for the assessment year 1984-85. The rectification orders were passed for reducing the amount of depreciation granted by reducing the cost of the assets in the hands of the petitioner by the amount of subsidy which was obtained by the petitioner. The petitioner did not challenge the aforesaid orders dated Septemb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sonable. (iii) In the matter of condonation of delay, the court should adopt a liberal and lenient approach and to prefer the cause of substantial justice over technical considerations. No appeal was filed against the orders passed by the Assessing Officer under section 154 of the Act in the year 1986 because of sheer inadvertence. However, that should not come in the way of condonation of delay in filing the revision petition when the order under section 154 was patently erroneous and without jurisdiction as the same is against the law laid down by the apex court and also by this court. Mr. Manish Bhatt, learned standing counsel for the Revenue, has opposed the petition and submitted that after the rectification orders were passed by the Assessing Officer in the year 1986, several High Courts had made pronouncements on the controversy in question between 1987 and 1992 and in fact this court, being the jurisdictional High Court, had also held in CIT v. Grace Paper Industries (P.) Ltd. [1990] 183 ITR 591 that general subsidy granted for giving incentives to the industrialists for establishing industries in backward area was not to be reduced from the cost of acquisition of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revented by sufficient cause from making the application within that period, admit an application made after the expiry of that period. Contention (i): It is true that the apex court has held that the court should adopt a liberal approach in considering the application for condonation of delay and that substantial justice deserves to be preferred over technical considerations. However, it is equally well settled that a person invoking the decision of the appellate or revisional authority beyond the prescribed period of limitation is required to show sufficient cause which would include showing that the petitioner/appellant was either bona fide pursuing his remedies or was prevented by sufficient cause from pursuing his remedies. Whether sufficient cause is made out or not is always a question of fact depending upon the facts and circumstances of each case and has to be established on record. An application seeking condonation of delay has also to establish that mere was no negligence or inaction or want of bona fides and that the right granted under law to challenge the order was not abandoned. It cannot be overlooked that on expiry of the period of limitation prescribed for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... p duty, registration charges, etc., in connection with the issue of debentures secured on all the fixed assets of the petitioner. The Bombay High Court and certain other High Courts had held such expenditure as capital expenditure. Hence, the petitioner did not specifically claim deduction of such expenditure from its gross income in the respective years. In 1966, the Supreme Court reversed the above view and held that such expenditure must be treated as revenue expenditure. On coming to know of the said decision, the petitioner moved the Commissioner of Income-tax by a revision petition under section 264 of the 1961 Act and the corresponding provisions under the 1922 Act which also provided for a period of limitation of one year from the date of the assessment with power granted to the Commissioner of Income-tax to condone the delay for sufficient cause. The petitioner requested for condonation of delay on the ground that the decision of the Supreme Court had changed the whole law on b the subject and, therefore, there was sufficient cause for condonation of delay. The Commissioner of Income-tax refused to condone the delay and dismissed the revision application as time-barred, Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e jurisdictional High Court, i.e., the Bombay High Court and certain other High Courts had held such expenditure to be capital expenditure and this court observed: "it was obviously because the real legal position appeared to be settled (against the assessee) that the petitioner did not keep the question 'alive'. Therefore, for the purpose of decision whether the petitioner had sufficient cause for not preferring the revision application in time, the fact that it did not keep the question alive by preferring appeals, which were likely to prove infructuous, did not make any difference." On the other hand, in the instant case, as already indicated earlier, apart from the decisions of several other High Courts, this court, being the jurisdictional High Court, had already held in the case of Grace Paper Industries rendered in March, 1990, and reported in the same year ([1990] 183 ITR 591) that general subsidy granted for giving incentives to the industrialists for establishing industries in backward areas was not to be reduced from the cost of acquisition of the assets. Not a whisper is made by the assessee either in his application before the Commissioner of Income-tax or in the mem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompulsory retirement was dismissed b by the High Court in February, 1962. When the apex court pronounced its judgment in Moti Ram Deka v. General Manager, North East Frontier Railway, AIR 1964 SC 600, the appellant filed a suit in February, 1964, within the limitation period of three years. When that suit ultimately culminated into a special leave petition before the apex court, the appellant was advised by the three judge Bench of the apex court to file a special leave petition against the High Court order dated February 5,1962, and thereupon the appellant filed a special leave petition in the year 1990 for challenging the High Court order dated February 5, 1962. What is of utmost relevance is the fact that between 1964 and 1990 the appellant before the apex court had never abandoned his right because the appellant had been agitating the issue in the civil suit which culminated into the special leave petition before the apex court. Under the circumstances, the decision of the apex court in Nand Kishore [1995] 6 SCC 614 cannot advance the petitioner's case any further, when the petitioner had not taken any action or shown any vigilance for a period of more than eight years after th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... long period for approaching the appropriate authorities for redressal of his grievance, if any. The petitioner not having availed of any such remedies for more than eight years, and not showing any action having been taken by the petitioner or vigilance shown, it has to be held that the petitioner had abandoned his right to challenge the rectification orders passed way back in the year 1986 and the petitioner did not show sufficient cause for condonation of delay of more than eight years in filing the revision petitions. Contention (iii): As regards the contention urged on behalf of the assessee that if this petition is dismissed, technical considerations will prevail over substantial justice, proceeds on the assumption that the so-called injustice to the appellant is not only proved on the basis of the record already available with the Assessing Officer at the time of rectification, but also that the injustice is apparent and gross. In this connection, we would like to again refer to the decision of this court in Grace Paper Industries' case [1990] 183 ITR 591 which has been approved by the hon'ble Supreme Court in CIT v. P.J. Chemicals Ltd. [1994] 210 ITR 830. Neither this c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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