IMPORTANT POINT
The main legal point established in the judgment is that the Commissioner should consider the sufficient cause for the delay in preferring the application under Section 264 of the Income Tax Act, especially when there is no negligence or want of bona fide on the part of the petitioner.

JUDGMENT :

(Bhargav D. Karia, J.)

1. Heard learned advocate Mr.B.S.Soparkar for the petitioner and learned advocate Mr.Varun K. Patel with learned advocate Mr.Dev Patel for the respondent.

2. Rule, returnable forthwith. Learned advocate Mr.Dev Patel waives service of notice of rule for and on behalf of the respondent.

3. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for quashing and setting aside the order dated 20th March, 2020 passed under Section 264 of the Income Tax Act, 1961 (for short ‘the Act’).

4. The brief facts of the case are as under :

4.1. The petitioner is a limited Company incorporated under the provisions of the Companies Act, 1956 and is engaged in business of weaving, manufacturing and finishing of textiles. The petitioner is also engaged in business of manufacturing and dealing in Denim and other textile activities.

4.2. For the Assessment Year 2015-16, the petitioner filed return of income on 31.10.2015 declaring total loss of Rs.8,54,09,913/- including the Interest Subsidy of Rs.10,83,16,142/- received by the petitioner under Technology Upgradation Fund Scheme (TUFS) for Textile and Jute Industries, State Interest subsidy of Rs.2,27,09,183/- and Electricity Subsidy of Rs.1,71,06,082/-.

4.3. According to the petitioner the aforesaid subsidies were erroneously treated as revenue receipts instead of capital receipts and return of the income was processed under Section 143(1) of the Act on 17.01.2017 without framing any assessment under Section 143(3) and intimation to that effect issued.

4.4. It is the case of the petitioner that for Assessment Year 2012-13, the petitioner had received similar subsidies and the same were treated as revenue receipts instead of capital receipts and during the appeal before the Income Tax Appellate Tribunal, additional ground was taken by the petitioner and the same was allowed by the Tribunal while disposing of the appeal being ITA No.1843/Ahd/ 2016 by order dated 20th February, 2019. Therefore, according to the petitioner, the issue of nature of subsidy was judicially decided that it would be capital receipt and not revenue receipt.

4.5. The petitioner therefore, on the basis of the aforesaid order passed by the Tribunal filed Revision Application under Section 264 of the Act on 01.07.2019 to revise the return loss for Assessment Year 2015-16 and treat the various subsidies as capital receipt instead of revenue receipt as erroneously offered in return of income.

4.6. The petitioner also requested the respondents to condone the delay in filing of the revision application as per provisions of Section 264(3) of the Act.

4.7. However, the respondent-Principal Commissioner of Income Tax by the impugned order dated 20th March, 2020 rejected the revision application of the petitioner on the ground of limitation by not entertaining the application to condone the delay in preferring the revision application. The petitioner being aggrieved has preferred this petition.

5.1. Learned advocate Mr.B.S.Soparkar for the petitioner submitted that in view of the order passed by the Tribunal, it is not in dispute that the subsidies received by the petitioner on various grounds as stated hereinabove are capital receipt and not revenue receipt and therefore the petitioner has filed the revision application for revising the return by considering such subsidies offered as revenue receipt erroneously instead of capital receipt by reducing the loss to that extent.

5.2. It was submitted that the respondent without considering the provisio to Section 264(3) of the Act, has refused to condone the delay in spite of there are good reasons for the same. It was submitted that the petitioner could not have revised the return of the Assessment Year 2015-16 as a time to revise return work already has expired on 30th March, 2017 whereas, judgment of the Hon’ble Supreme Court in case of Chaphalkar Brothers Pune reported in [2017] 88 taxmann.com 178 (SC) was pronounced on 17.12.201