2004 (7) TMI 46 - HC - Income Tax

Claim for exemption u/s 5(vi) - Petitioner submitted that through oversight and because of wrong interpretation of the provision granting exemption under section 5(vi) of the Act with effect from the assessment year 1994-95, the petitioners did not claim exemption in respect of one house or part of the house belonging to the respective petitioners. The petitioners and their chartered accountant were under the belief that with effect from the assessment year 1994-95, the amendment in the Wealth-tax Act by the Finance Act, 1992, granting exemption under section 5(vi) was applicable only in respect of the residential house property and not in respect of any commercial property - petitioners prayed that the Assessing Officer be directed to grant exemption under section 5(vi) for the aforesaid assessment years 1994-95 to 2001-02 in respect of the petitioners office premises petition allowed

Summary

Issues:
Challenging rejection of revision petitions under section 25 of the Wealth-tax Act, 1957 for being filed beyond the period of limitation.

Analysis:
The petitioners filed two separate petitions against orders rejecting their revision petitions under section 25 of the Wealth-tax Act, 1957 due to being filed beyond the limitation period. They claimed exemption under section 5(vi) for their office premises, realizing their mistake after a circular clarified the provision. The Commissioner rejected the petitions, stating ignorance cannot condone delay, leading to the challenge.

The petitioners argued that the orders lacked proper consideration, especially for the assessment year 2001-02 where revised returns were filed within the limitation period. They contended that delay condonation was not assessed correctly, highlighting varying delays in filing revision petitions for different assessment years.

The petitioners emphasized substantial justice over technicalities, citing a Supreme Court decision. They argued that the Commissioner's focus on the delay for the initial year disregarded subsequent years with lesser delays. The court noted the historical amendments to the exemption provision and the common understanding of "house" as residential, justifying the delays in claiming exemptions.

Consequently, the court allowed the petitions, quashing the orders and remanding the matter for the Commissioner to decide on the merits for specific assessment years. The ruling favored substantial justice, considering the factual circumstances and legal interpretations, setting aside the initial rejection based on delay.

In conclusion, the court's decision prioritized substantial justice, emphasizing the need to consider factual contexts and legal interpretations over technicalities. The judgment highlighted the historical amendments to the exemption provision and the common understanding of the term "house" to justify the delays in claiming exemptions, ultimately leading to the allowance of the petitions and remand for further consideration by the Commissioner.