Karnataka H.C : The CBDT rejected the petition on the ground that it had no power to condone the delay

High Court Of Karnataka

R. N. Shetty Trust vs. Secretary, CBDT

Section : 119

H.N. Nagamohan Das, J.

W.P. Nos. 64116, 64188 & 64189 Of 2010

November 17, 2011

JUDGMENT

1. In these writ petitions the petitioner has prayed for a writ in the nature of certiorari to quash the order dated March 7, 2008-annexure C, July 1, 2009-annexure H and February 24, 2010-annexure K passed by the Central Board of Direct Taxes (for short the “CBDT”).

2. The petitioner is a charitable trust recognised under section 12A of Income-tax Act, 1961 (for short “the Act”). The petitioner trust filed petition under section 119(2)(b) of the Act requesting to condone the delay in selling the company shares. Under the impugned orders at annexures C, H and K the Central Board of Direct Taxes rejected the petitions filed by the petitioner on the ground that it has no power to condone the delay. In identical circumstances a Division Bench of this court in the case of Mysore Sales International Ltd. v. Member (Income-tax), CBDT[1998] 233 ITR 663/[1998] 101 Taxman 614 held as under :

“Held, that the Central Board of Direct Taxes 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, provided it is intended for avoiding genuine hardship in a given case. From the order passed by the Central Board of Direct Taxes, its attention was not drawn to the provisions of section 119(2)(b) and, therefore, it had failed to apply itself to this benevolent provision. The order passed by the Central Board of Direct Taxes was liable to be quashed.”

3. In view of this dictum of the Division Bench of this court the impugned orders are liable to be quashed. The matter is required to be remanded for fresh disposal after providing an opportunity to the petitioner.

4. For the reasons stated above, the following :

ORDER

i. Writ petitions are hereby allowed.

ii. The impugned orders dated March 7, 2008-Annexure C, July 1, 2009-Annexure H and February 24, 2010-Annexure K are hereby quashed.

[Citation : 343 ITR 294]