M/S. SHARAVATHY CONDUCTORS PRIVATE LIMITED V. THE CHIEF COMMISSIONER OF INCOME-TAX

WA/6752/2017

AI Insights

The case involves M/s. Sharavathy Conductors Private Limited, which sought condonation of delay in filing a revised return of income for the assessment year 1997-98 under Section 119(2)(b) of the Income Tax Act. The delay of four years was initially rejected by the Assessing Officer, leading to the filing of a writ petition. The learned Single Judge upheld the rejection, stating that the assessee cannot claim condonation of delay as a matter of right. However, the Division Bench found that the reasons for the delay provided by the assessee were not adequately considered and allowed the appeal, directing the Assessing Officer to process the revised return.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 732831 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-02-2020
• Assessment Year: misc
• Other Referred Cases: CIT vs. SILVER ARTS PALACE, ACIT vs. MICRO LABS LIMITED
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: A SHANKAR
• Keywords: Assessment Year 1997-98; Condonation of delay; Income Tax; Revised return
• Section: 80HHC; 119(2)(b)

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU ON THE 10TH DAY OF FEBRUARY, 2020 BEFORE THE HON'BLE MR. JUSTICE RAVI MALIMATH AND THE HON’BLE MR. JUSTICE M.I.ARUN WRIT APPEAL NO.6752 OF 2017 (T-IT) BETWEEN: M/S. SHARAVATHY CONDUCTORS PRIVATE LIMITED REPRESENTED BY ITS MANAGING DIRECTOR, SRI KAARDAM PATEL, AGED ABOUT 47 YEARS, NO.23, BCI ESTATE, 6TH MAIN, OLD MADRAS ROAD, BENGALURU-560 016. ...APPELLANT (BY SRI A. SHANKAR, SENIOR COUNSEL FOR SRI M. LAVA, ADVOCATE) AND: 1. THE CHIEF COMMISSIONER OF INCOME-TAX BENGALURU-2 OFFICE OF THE CHIEF COMMISSIONER OF INCOME-TAX, BENGALURU-2, C.R. BUILDING, QUEENS ROAD, BENGALURU-560 001. 2 2. THE PRINCIPAL COMMISSIONER OF INCOME-TAX BENGALURU-6, BMTC BUILDING, 80 FEET ROAD, 5TH FLOOR, 6TH BLOCK, KORAMANGALA, BENGALURU-560 095. 3. THE ASSISTANT COMMISSIONER OF INCOME-TAX CIRCLE 6(1)(1), BMTC BUILDING, 85 FEET ROAD, KORAMANGALA, BENGALURU-560 095. …RESPONDENTS (BY SRI K.V. ARAVIND, ADVOCATE) THIS WRIT APPEAL IS FILED UNDER SECTION 4 OF THE KARNATAKA HIGH COURT ACT, 1961 TO SET ASIDE THE ORDER PASSED BY THE LEARNED SINGLE JUDGE IN WRIT PETITION NO.28376 OF 2017 DATED 24.10.2017 AND CONSEQUENTLY GRANT THE RELIEF PRAYED FOR IN THE WRIT PETITION. ***** THIS WRIT APPEAL COMING ON FOR FINAL HEARING THIS DAY, RAVI MALIMATH J., DELIVERED THE FOLLOWING: 3 JUDGMENT Condonation of delay was sought by the writ petitioner in filing the revised return of income for the assessment year 1997-98 under Section 119(2)(b) of the Income Tax Act. The same was rejected. Hence, the instant writ petition was filed. The learned Single Judge on considering the contentions was of the view that the petitioner - assessee cannot seek condonation of delay in filing the revised return as a matter of right even though such a claim is not clearly admissible under law on merits. That the discretion of the authority in rejecting the application seeking condonation of delay cannot be said to be wrong in any manner whatsoever. Aggrieved by the same, the instant appeal is filed. 2. Sri A.Shankar, the learned Senior counsel appearing for the appellant’s counsel submits that what was sought for was condonation of delay of 4 years in filing the revised return. The Assessing Officer misdirected himself and rejected the application seeking condonation of delay by 4 misreading the Board’s Circular dated 9-6-2015. The reason assigned by the assessee as to why there is a delay in filing the revised return could be seen from the statement dated 10-05-2016, vide Annexure-G to the writ petition. Therein in para-2.1 he has stated that after filing the return of income they came across a Judgment in the case of CIT vs. SILVER ARTS PALACE reported in (2003) 259 ITR 684, whereby the Hon’ble Supreme Court has taken the view that sales made in India in convertible foreign exchange that involved customs clear would amount to an export out of India and deduction under Section 88HHC of the Act was allowable. Considering the aforesaid Judgment the revised return of income was filed on 28-3-2003. That the same is within the period of six years from the end of assessment year, making the claim for deduction under Section 80HHC of the Act. The Commissioner held that as to whether the assessee is eligible for deduction both under Section 80 as well as Section 80-HHC is justifiable, the Hon’ble Supreme Court in the case of ACIT vs. MICRO LABS LIMITED reported in 380 5 ITR 1 (SC) referred the matter to the larger Bench since there was difference of opinion among the members of the Division Bench and that the same is pending consideration. Therefore, the question of condoning the delay would not arise for consideration. 3. The same is disputed by Sri.K.V.Aravind, learned counsel appearing for the respondent on the ground that firstly there is no reason to condone the delay. Secondly, assuming that the delay is to be considered favourably, the Assessing Officer may be directed to stay his hands till the Hon’ble Supreme Court decides the matter in the MICRO LABS LIMITED’S CASE which has been referred to the larger Bench of the Supreme Court. in the case of MICRO LABS LIMITED and other cases. Therefore, pending adjudication of those disputes the Assessing Officer may stay his hands. 4. On hearing learned counsels, we are of the view that appropriate interference is called for. Rejecting 6 the plea of condonation of delay in filing the revised return, in our considered view require to be interfered with. The reasons assigned by the assessee as to why there is delay in filing the revised return is clearly enunciated in para -2.1 and 2.2 of the statement dated 10-5-2016. The same was not considered on a question of law. Under these circumstances, we are of the view that the assessee should have a right to contest his claim and cannot be non-suited merely on the ground of delay. Hence, we are inclined to allow the application for condonation of delay. Further, it is just and appropriate that the Assessing Officer decides the claim of the petitioner in accordance with law. We do not think it appropriate to stay the processing of the revised return by the Assessing Officer. The Assessing Officer is entitled to pass such orders as he deems fit. 5. Under these circumstances, the appeal is allowed. 7 1) The order dated 24.10.2017, passed by the learned Single Judge in Writ Petition No.28376 of 2017 is set aside. 2) The writ petition is partly allowed. 3) The delay in filing the revised return is condoned. The Assessing Officer shall process the revised return in accordance with law. Sd/- JUDGE Sd/- JUDGE Rsk/- "