2012 (6) TMI 652 - HC - Income Tax

Writ petitions condonation of delay in selling the company shares - CBDT rejected the petitions filed by the petitioner on the ground that it has no power to condone the delay - Held that - CBDT has sufficient powers under section 119(2)(b) of the Income-tax Act, 1961, to consider the desirability or expediency of granting relief under the Act, even after the expiry of the period of limitation provided under any specific provision and dispose of the matter on the merits in accordance with law. Writ petitions allowed.

Summary

Issues:
1. Petitioner's request for condoning delay in selling company shares rejected by Central Board of Direct Taxes (CBDT)
2. Interpretation of powers of CBDT under section 119(2)(b) of Income-tax Act, 1961
3. Comparison with a previous judgment by Division Bench of the court

Issue 1: Petitioner's request for condoning delay rejected
The petitioner, a charitable trust recognized under section 12A of the Income-tax Act, 1961, filed a petition under section 119(2)(b) of the Act seeking to condone the delay in selling company shares. The CBDT, through orders dated March 7, 2008, July 1, 2009, and February 24, 2010, rejected the petitioner's requests, citing a lack of power to condone the delay.

Issue 2: Interpretation of CBDT's powers under section 119(2)(b)
The petitioner relied on a previous judgment by a Division Bench of the court in the case of Mysore Sales International Ltd. v. Member, CBDT, where it was held that the CBDT has sufficient powers under section 119(2)(b) to consider granting relief even after the expiry of the limitation period, especially to avoid genuine hardship. The Division Bench emphasized that the CBDT failed to apply itself to this provision in the petitioner's case, leading to the quashing of the CBDT's orders.

Issue 3: Comparison with previous judgment
In light of the Division Bench's ruling, the current judgment concluded that the impugned orders must be quashed, and the matter remanded for fresh disposal after affording the petitioner an opportunity. Consequently, the writ petitions were allowed, and the orders dated March 7, 2008, July 1, 2009, and February 24, 2010, were quashed.

This judgment highlights the importance of correctly interpreting statutory provisions and ensuring that authorities exercise their powers in line with the law to prevent genuine hardship in specific cases.