1972 (2) TMI 24 - HC - Income Tax

This is an application, under article 226 of the Constitution for a writ of certiorari for quashing the order of the Commissioner of Income-tax - Whether the Commissioner can reject the provision petition on the ground that it was belated - Commissioner will now consider the revision petition of the petitioner for the condonation of delay in the light of the observations made herein

Summary

Issues:
1. Application for writ of certiorari to quash the order of the Commissioner of Income-tax.
2. Assessment of taxable income for the year ended December 31, 1957.
3. Reopening of assessment and addition of further sum to taxable income.
4. Appeal by the assessee resulting in partial success.
5. Inclusion of closing stock value in taxable income for the assessment year.
6. Rejection of application for rectification of assessment.
7. Filing of revision petition under section 33A of the Income-tax Act.
8. Rejection of the revision petition and refusal to condone the delay.
9. Consideration of sufficient cause for condonation of delay.
10. Interpretation of limitation period for filing revision petition.
11. Remittal of the matter to the Commissioner for reconsideration.
12. Legal principles regarding the condonation of delay.
13. Requirement of diligence in pursuing legal proceedings.
14. Assessment of costs for the writ petition.

Analysis:
The judgment pertains to an application for a writ of certiorari seeking to quash the order of the Commissioner of Income-tax dated February 23, 1970. The petitioner, a partnership, was initially assessed for the income year ending December 31, 1957, with a determined income of Rs. 46,254. Subsequently, the Income-tax Officer reopened the assessment and added a further sum of Rs. 50,000, leading to an appeal by the assessee resulting in a partial success where the additional income was reduced to Rs. 24,500. This amount represented the value of the closing stock that the Income-tax Officer deemed should have been included in the return for the assessment year ending December 31, 1957.

Following the appellate decision on February 28, 1967, the assessee applied for rectification of the assessment, which was rejected by the Income-tax Officer on May 4, 1967. The assessee then filed a revision petition under section 33A of the Income-tax Act on December 26, 1967, along with a request for condonation of the delay. However, the Commissioner of Income-tax, through the impugned order of February 23, 1970, dismissed the revision petition and refused to condone the delay, citing it as belated without proper consideration.

The judgment delves into the assessment of whether there was a sufficient cause for condonation of the delay in filing the revision petition. The court found that the Commissioner had not adequately evaluated the grounds for the delay and the legal interpretation of the limitation period for filing the petition. It was concluded that the matter should be remitted to the Commissioner for a reassessment of whether sufficient cause existed for accepting the belated revision petition.

Moreover, the judgment emphasizes the importance of diligence in pursuing legal proceedings and the principle that a litigant should not be compelled to engage in parallel proceedings due to the possibility of an unfavorable outcome in one. The court highlighted that the petitioner had diligently pursued the matter and had not been lacking in diligence, thereby warranting a reconsideration of the condonation of delay by the Commissioner.

Ultimately, the court made the rule nisi absolute, granting the petitioner the costs of the writ petition and emphasizing the need for a thorough reconsideration of the condonation of delay in light of the observations made in the judgment.