Revision : S. 264 : S. 10(26AAA) was introduced by Finance Act, 2008 with retrospective effect from 1-4-1990 after completion of assessment for relevant years : Assessee’s application u/s.264 for relief under new Section with application for condonation

[Danny Denzongpa v. CIT,
194 Taxman 415 (Bom.)]

The assessee was an Indian
national of Sikkimese origin. For the relevant assessment years, his
assessments had been completed. Thereafter,
S. 10(26AAA) was introduced by the Finance Act, 2008 with retrospective effect
from 1-4-1990. The assessee was entitled to benefit under the new S. 10(26AAA).
Therefore, for the A.Ys. 1997-98 to 2005-06, the
assessee made an applications for revision u/s.264 of the Income-tax Act, 1961
to the Commissioner on 4-9-2008 with the application for condonation of delay
for grant of relief under the new S. 10(26AAA). The Commissioner rejected the
applications on the ground that those have been filed beyond the time limit
prescribed in the Act.

The Bombay High Court
allowed the writ petition filed by the assessee and held as under :

“(i) A reading of S.
264(6) discloses that if the assessee had been 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 the period. Indubitably, in the instant case, the application
u/s.264 came to be filed by the assessee on account of the introduction of S.
10(26AAA) which came into operation with retrospective effect from 1-4-1990.
By the said provision, the assessee, who was Sikkimese by origin, was entitled
to certain benefits. Obviously there seems to be a rationale in introducing
the said provisions as the Government was of the view that the said benefit is
required to be granted for the upliftment of the people of Sikkimese origin.

(ii) 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 assessee had 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 assessee did file
the applications at the said point of time, had been mentioned by him in the
applications for each of the assessment years. However, as could be seen from
the impugned order, the Commissioner had not even adverted to the reasons
mentioned by the assessee in the application for condonation of delay and had,
in a cryptic manner, rejected the said application by observing that he was
unable to entertain the assessee’s petitions beyond the time limit prescribed.

(iii) Once the
Commissioner is vested with the power of condonation of delay, then it is
incumbent upon him to take into consideration the reasons mentioned by the
assessee seeking condonation of the delay. A reading of the impugned order,
however, did not indicate that the reasons mentioned by the assessee had been
considered. In fact, the said reasons had not even been adverted to by the
Commissioner.

(iv) In matters of this
kind, wherein a benefit is sought to be given to an assessee, that too with a
retrospective effect, a highly technical and pedantic approach is required to
be eschewed and one which furthers the intent and purport of the legislation
is required to be adopted.

(v) Though in the normal
circumstances, for the reasons mentioned hereinabove, we would have set aside
the orders and remanded the matter back to the Commissioner for a de novo
consideration, however, for the reasons which we have mentioned hereinabove,
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)”.