Revision – Section 264 of ITA, 1961 – Delay in filing application – Condonation of delay – Assessee including non-taxable income in return – Assessee acting in time to correct return by filing revised return and rectification application – Revised return rejected on technical ground – Consequent delay in filing application for revision was to be condoned

28 Ramupillai Kuppuraj
vs. ITO; [2019] 418 ITR 458
(Mad.) Date of order: 28^th
June, 2018 A.Y.: 2009-10

Revision – Section
264 of ITA, 1961 – Delay in filing application – Condonation of delay –
Assessee including non-taxable income in return – Assessee acting in time to
correct return by filing revised return and rectification application – Revised
return rejected on technical ground – Consequent delay in filing application
for revision was to be condoned

The assessee, a non-resident seafarer, filed his
return for the A.Y. 2009-10. He then filed, in time, a revised return excluding
an amount of Rs. 19.84 lakhs which was erroneously included in the return
though, according to him, it was income received from abroad and hence not
taxable in India. The revised return was rejected for a technical reason. An
application for rectification was also rejected and a notice of demand was
issued. The assessee filed an application for revision u/s 264 of the
Income-tax Act, 1961 which was rejected solely on the ground of delay. The
assessee filed a writ petition and challenged the order.

The Madras High Court allowed the writ petition and
held as under:

‘i)   The
Commissioner has powers to condone a delay in the application for revision u/s
264 of the Income-tax Act, 1961. There is no restriction regarding the length
of delay that can be condoned. In case of delay whether sufficient cause has
been made out or not is always a question which depends on the facts and
circumstances of each case and it has to be established based on records of
that case.

ii)   The
period of one year for filing an application u/s 264 expires on 22^nd
October, 2011, as the order of assessment u/s 143(1) came to be passed on 23^rd
October, 2010. Within this one year, i.e., on 5^th August, 2011
itself, the assessee had taken the first step to have his Rs. 19.84 lakhs
excluded qua the assessment year by filing a revised return. This
revised return was rejected u/s 139(5) on a technical ground. The assessee
filed a rectification application, on which no orders were passed. Without
passing orders on the application for rectification, a demand notice was issued
triggering a second application for rectification from the assessee which came
to be dismissed. A demand was made on 31^st January, 2018, the second
rectification application was filed by the assessee on 2^nd July,
2018; the assessee ultimately filed a petition u/s 264.

iii)  Therefore,
this was not a case where the assessee had not acted in time. The rejection of
the application for revision solely on the ground of delay was not justified.’