2005 (3) TMI 78 - HC - Income Tax

Power given to the Board under section 119(2) to entertain a belated claim delay in application for seeking concessions u/s 80MM approval from Central Board of Direct Taxes in that behalf Board rejecting the application petitioner also made prayer for condonation of such delay - circumstances stated by the applicant clearly demonstrate that cases of hardship would justly and fairly invite the application of the power vested in the Board under section 119(2) r.w.s. 80MM - we would set aside the orders passed by the Board dated April 11, 1980, and May 14, 1981, issued by and on behalf of the Director, Central Board of Direct Taxes holding that the approval cannot be made effective from the assessment year 1978-79 instead of 1979-80 and that the Board has no power to condone the delay respectively. We hold that the petitioner was entitled to have the benefit effective from the financial year 1978-79 which has already been granted by the Board with effect from 1979-80.

Issues Involved:
1. Interpretation of the term "made" in the proviso to section 80MM of the Income-tax Act.
2. Whether the petitioner was entitled to the benefit for the assessment year 1978-79 based on the timing of the application.
3. The Board's power to condone the delay in submitting the application.

Issue-Wise Detailed Analysis:

1. Interpretation of the term "made" in the proviso to section 80MM of the Income-tax Act:
The primary issue revolved around the interpretation of the term "made" in the proviso to section 80MM of the Income-tax Act. The petitioner argued that "made" should be interpreted as "dispatched," meaning the application was considered made when it was sent by registered post. The respondents contended that "made" should be construed as "submitted" and "received" by the Board before the cut-off date. The court examined the provision and concluded that the term "made" should be given its normal meaning, which does not necessarily mean "received." The court emphasized that if the legislature intended the application to be received by the cut-off date, it would have used the term "received" instead of "made."

2. Entitlement to the benefit for the assessment year 1978-79 based on the timing of the application:
The petitioner sent the application by registered post on September 29, 1978, which was received by the Board on October 4, 1978. The Board granted the benefit for the assessment year 1979-80 but denied it for 1978-79. The court held that once the application was sent by registered post, the petitioner lost control over its delivery. The court referenced various legal definitions and precedents to support the interpretation that "made" could mean the date of dispatch. The court concluded that the petitioner had substantially complied with the requirements of section 80MM by dispatching the application on time, thus entitling them to the benefit for the assessment year 1978-79.

3. The Board's power to condone the delay in submitting the application:
The petitioner argued that any delay in the application's receipt should be condoned due to circumstances beyond their control, such as unprecedented floods. The court noted that the Board did not address the petitioner's request for condonation of delay. The court examined the Board's powers under section 119(2) of the Act, which allows the Board to condone delays to avoid genuine hardship. The court referenced the Full Bench decision of the Punjab and Haryana High Court in Jaswant Singh Bambha v. CBDT, which held that the Board has wide powers to condone delays based on the merits and circumstances of each case. The court concluded that the Board had the authority to condone the delay and should have considered the petitioner's request.

Conclusion:
The court set aside the Board's orders denying the benefit for the assessment year 1978-79 and held that the petitioner was entitled to the benefit effective from the financial year 1978-79. The court emphasized that the Board should have considered the petitioner's request for condonation of delay and acted in accordance with the principles of fairness and justice. The writ petition was allowed, with each party bearing its own costs.

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