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TMI Blog2024 (8) TMI 1437X X X X Extracts X X X X X X X X Extracts X X X X ..... gaged in business of weaving, manufacturing and finishing of textiles. The petitioner is also engaged in business of manufacturing and dealing in Denim and other textile activities. 4.2. For the Assessment Year 2015-16, the petitioner filed return of income on 31.10.2015 declaring total loss of Rs. 8,54,09,913/- including the Interest Subsidy of Rs. 10,83,16,142/- received by the petitioner under Technology Upgradation Fund Scheme (TUFS) for Textile and Jute Industries, State Interest subsidy of Rs. 2,27,09,183/- and Electricity Subsidy of Rs. 1,71,06,082/-. 4.3. According to the petitioner the aforesaid subsidies were erroneously treated as revenue receipts instead of capital receipts and return of the income was processed under Section 143(1) of the Act on 17.01.2017 without framing any assessment under Section 143(3) and intimation to that effect issued. 4.4. It is the case of the petitioner that for Assessment Year 2012-13, the petitioner had received similar subsidies and the same were treated as revenue receipts instead of capital receipts and during the appeal before the Income Tax Appellate Tribunal, additional ground was taken by the petitioner and the same was allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l receipt. Learned advocate Mr.B.S.Soparkar invited the attention of the Court to the reasons assigned by the respondent for rejecting the revision application on ground of delay and pointed out that the decision of the Hon'ble Mumbai High Court in case of Shyam Anant Solanki Versus PCIT reported in 104 Taxmann.com 108 (2019) (Mumbai) relied upon by the respondent would not be applicable in the facts of the case because in the facts of the present case, there is no deliberate delay caused by the petitioner for not preferring the revision application during the one year from the end of the assessment year as the judgment of the Hon'ble Supreme Court and Tribunal were not available within the period of one year and therefore, the petitioner could not file revision application. 5.4. Learned advocate Mr.B.S.Soparkar also referred to and relied upon the recent decision of the Hon'ble Bombay High Court in case of Hindalco Industries Ltd. versus Union of India reported in [2024[ 158 taxmann.com 485(Bombay) wherein, the Hon'ble Bombay High Court has held that while considering the question of condonation of delay under Section 264 of the Act, the Commissioner should not take a pedantic ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revision Application on 01.07.2019 i.e. within five months from the date of receipt of the order of the Tribunal. In such circumstances, as held by the Bombay High Court in case of Hindalco Industries Ltd. (Supra), the Commissioner should not have taken a pedantic approach but the approach ought to have been liberal and as per the provisio to Section 264(3) of the Act, he ought to have considered the sufficient cause for delay in preferring the application as there was no negligence on the part of the petitioner nor there was any bona-fide which can be imputable to the petitioner and revisional power ought to have been exercised to advance the substantial justice. The Hon'ble Bombay High Court in the facts of the case before it in case of Hindalco Industries Ltd. (Supra) has observed as under : "6. It is also note worthy to mention that under section 264 of the Act, the Commissioner is empowered either on his own motion or on an application made by assessee to call for the record of any proceedings under the Act and pass such order thereon not being an order prejudicial to assessee and this power has been conferred upon the Commissioner in order to enable him to give relief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustice. If the case of an applicant is genuine, mere delay should not defeat the claim. We find support for this view in Sitaldas K. Motwani v. Director General of Income-tax (International Taxation), New Delhi [2010 (87) taxman.com 44 (Bombay)], relied upon by Mr. Walve, where paragraph nos. 13 to 17 read as under : "13. Having heard both the parties, we must observe that while considering the genuine hardship, Respondent No.1 was not expected to consider a solitary ground so as to whether the petitioner was prevented by any substantial cause from filing return within due time. Other factors detailed hereinbelow ought to have been taken into account. 14. The Apex Court, in the case of B.M. Malani v. CIT [2008] 10 SCC 617, has explained the term "genuine" in following words: "16. The term 'genuine' as per the New Collins Concise English Dictionary is defined as under : 'Genuine' means not fake or counterfeit, real, not pretending (not bogus or merely a ruse). 17. ** 18. The ingredients of genuine hardship must be determined keeping in view the dictionary meaning thereof and the legal conspectus attending thereto. For the said purpose, another well-known pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... substantial justice and technical considerations are pitted against each other, cause of substantial justice deserves to be preferred for the other side cannot claim to have vested right in injustice being done because of a non-deliberate delay. There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact he runs a serious risk. The approach of the authorities should be justice-oriented so as to advance cause of justice. If refund is legitimately due to the applicant, mere delay should not defeat the claim for refund. 16. Whether the refund claim is correct and genuine, the authority must satisfy itself that the applicant has a prima facie correct and genuine claim, does not mean that the authority should examine the merits of the refund claim closely and come to a conclusion that the applicant's claim is bound to succeed. This would amount to prejudging the case on merits. All that the authority has to see is that on the face of it the person applying for refund after condonation of delay has a case which needs consideration and which is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce to the language of the Act. 21. We find that the impugned order dated 16 May 2006 of the CBDT also seeks to reject the application for condonation of delay on account of delay from the date of filing the Return of Income, i.e., 14 September 1999 upto 30 April 2002. This was not the ground mentioned in notice dated February 2006 given to the petitioner by the CBDT for rejecting the application for condonation of delay. Thus the petitioner had no occasion to meet the same. It appears to be an afterthought. However, as pointed out in paragraph 20 hereinabove, the delay in filing of an application if not coupled with some rights being created in favour of others, should not by itself lead to rejection of the application. This is of course upon the Court being satisfied that there were good and sufficient reasons for the delay on the part of the applicant. 23. In light of the aforesaid discussion, we are of the opinion that an acceptable explanation was offered by the petitioner and a case of genuine hardship was made out. The refusal by the CBDT to condone the delay was a result of adoption of an unduly restrictive approach. The CBDT appears to have proceeded on the basis that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Apex Court, it was not necessary for the petitioner to have explained each and every day's delay. On the contrary, the Apex Court held that when substantial justice and technical considerations are pitted against each other, the cause of substantial justice is to be preferred. The Apex Court also held there is no presumption that delay is intentional and deliberate, as normally a litigant does not stand to benefit by resorting to delay. As stated earlier, in the application dated 20th March, 2014 seeking invocation of the power under section 264, the delay has been adequately explained." 9. Therefore, the commissioner having been conferred the power to condone the delay to do substantial justice to parties by disposing the matter on merits should have, considering the facts and circumstances of the case, in particular that it took a long time for the CIT(A) to dispose petitioner's appeal, ought to have condoned the delay. 10. On the second part of the impugned order that intimation under section 143(1) of the Act is not an assessment order, this court in Smita Rohit Gupta v. Pr. CIT [2024] 158 taxmann.com 157/| 2023] 459 ITR 369/2023 SCC online Bom 1861 held in paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Commissioner under section 264. Before allowing such deduction if any further enquiry was required to be done, the Commissioner could have either himself enquired or directed the Assessing Officer to do the needful. However, the Commissioner has dave ithe herise enquir under section 264 besasse of amendment to section 143(1) by Finance Act, 1999. Powers of the Assessing Officer to make prima facie adjustments under section 143(1), done away with by Finance Act, 1999 (with effect from 1st June, 1999) does not in any way effect the right of the Commissioner under section 265 of the Act to grant relief to the assessee if available to the assessee as per the decision of the Apex Court. Exercise of powers under section 264 is not subject to the power of the Assessing Officer to make adjustments under section 143(1) of the Income-tax Act. Therefore, relief can be granted to the assessee under section 264 even if the power of adjustment under section 143(1) is taken away from the Assessing Officer." (emphasis supplied) 9. Section 264 of the Act also came up for consideration before the Hon'ble Delhi High Court in Vijay Gupta v CIT Delhi-III [2016] 68 taxmann.com 131 (Delhi) wh ..... 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