The High Court · 2025

Counsel for the Petitioner: SRI PERCY J.PARDIWALA, Sr. COUNSEL, REP. FOR SRI K.PRATIK REDDY Counsel for the Respondent No.1, 2 & 4: SMT BOKARO SAPNA REDDY, Sr. SC FOR lT Counsel for the Respondent No.5: SRI N.BHUJANGA RAO, Sr. COUNSEL FOR CENTRAL GOVT. The Court made the following: ORDER TIIE HON'BLB 'tHE CHIT]I- JUS'TICE, SRI APARESTI KUMAR STNGH AND THE HON'I}LE SRI JUS'IICE G.M.MOIIIUDDIN WRIT PE'II-IION No. 27512 of 2025 OR.DER: Heard Sri Percy J. Pardiwala, leamed Senior Counsel representing Sri K. Pratik Reddy, learned counsel for petitioner, Smt. Bokaro Sapna Reddy, learned Senior Standing Counsel for lncome-tax appearing for respondent Nos.1, 2 and 4 and Sri N. Bhujanga Rao, learned Senior Panel Counsel for Central Covemment appearing for respondent No.5.

2. Revision under Section 264 of the Income-tax Act, 1961 (for shorl 'the Act'), is to be filed within a period of one year from the date on which the order in question i.e., the order passed on the petitioner's application for rectification was rejected. The order of rejection is dated 01 .12.2016. The revision application has been filed on 28.10.2024 before the Principal Commissioner of Income Tax-I, Hyderabad (PCIT). The same has been rejected by the impugned order dated

01.08.2025 on grounds of inordinate delay of 91 months, gross negligence and laches. The petitioner Trust manages the provident fund contributions of its ernployees and it is registered under tl.re Ernployees' Providcnt Funds and Miscellaneou:; Provisions Act, 1952. In respect of the return of - income lbr the Assessment Year 2014-15, exemption under Seotion l0(25) of the Act amounting to Rs.10,2 1,72,4421- was disallorved ou 10.03.2016 and consequently, a demand of Rs.4,43,48,17'9l- was issued. Aggrieved against this, the assessee filod its rectification petition, which was rejected on

01.12.2016 rmpugned in revision before the leamed Commissionel nearly after seven (7) years. The petitioner lnrer alia took the plea that it was not aware of the rejection of the rectificatiorL petition. When the concemed person of petitioner Trust loggcd into the Income Tax Portal for assessment proceedingsr of Assessment Year 2022-23, he caure to know about the rec,rvery notice dated 09.06.2023 for ,A.ssessment Year 2014- 15 and based on that, the concerned person realized that the rectilication request tbr non-allowing of exemption has been rejer:ted on 0l .12.2016. Such rejection was sent [o Email l.D. of the erstwhile employee of M/s. Tata Projects Limited w,crkiug in Human Resource Department. The assessee therel'ore pleaded unavoidable reason for the delay in - filing the revision against rejection of its rectification 3 HCJ (AK.S, J) & cMN,t, J w.P No 2?512 of 2025 application. According to the assessee, in earlier years as well as subsequent years, the exemption claimed by the Trust under Section 10(25) of the Acr was never disputed by the Department. In the recent order passed under Section 143(3) read with Section 260 of the Act for the Assessment year 2022-23, the Assessing Officer had given a finding that the income of the petitioner Trust is exempted under Section 10(25) of the Act. Therefbre, in the application for condonation of delay under Sectio n Z6ae) of the Act filed along with the revision petition,, the petitioner prayed that delay has not been deliberate and contumacious. Relying upon certain decisions of the Apex Court as well as Bombay, Madras and Calcutta High Courts, the revisional authority by the impugned order upon consideration ofthe specific grounds raised by the petitioner held as under: *6. 'fhe factual report submittcd by the AO and Range head is perused- F urther, as per the provisions vested L_r,/s.264 of the Income 'fax Act, 1961, thc records in the case o[ the assesscc for the Asst. Year 2014- 1 5 have been cxamined.

7. [n the above context, before finalization by this oftice, the assessec was given an opportunity ol bcing heard and the case was posted for hearing vidc this office notlce dated 01.07 2025. 4 tlCJ (AhrS, J) & Ot \1. J I F.No.275l2 oi 2025 ln lcspon re to the noticc issued, thc AR oI the asscssce. Shn Jatin Kanabar rppcared on 10.07.2025. 'lhe AR explained thc Inatter and requt:stcd for condonation of delay in [iling applicatron u/s. 264 ol the Act. 'Ihc case was discusscd. Further subnlissions were i lso tiled by the assessec on 25-07.2025. -I I havo carefully considercd the petition, supporting 8, subrrussi(,ns, case law citcd and repo of the Assossing C)fficer. 'fhe key issue in this case ls whothcr the delay in filing the petiticn under Section 264 can be oondoned.

9. As per the provrsions of Sectlon 264, thc application shall be madc within one year lrom the date on which the order in question rvas communicated to the Assessce or the datc on whiqh the Arise-qscc otherwisc came to know of it, whichever is carlier.

10. [n the prcsont case thc intimation Ltls 143(1) was issued on 10.03 20.6. Subsequently, lhe rectitication rcqucst was rejected on 01.12.2016. and this information was accessible ttrrotlgh the l'lBA potal. Even il the benefit ofdoubt is extendod and tho date ol rejection (01.12-2016) is constdercd as the reLevanl daLe, the last diltc to file a valid revision petition under Section 264 rvould be 01.2.i1017. I{owever, the present petition has been filt:d on 28.10.20,]4. nearly seven years alter thc statutory dcadlinc, makilg i grossly time-barrcd.

11. 'lle assessee's explanation that it rcmained utla'vare ot the rcctilication rejection due to the crnail beiug sent to an ex- empkryc,: has not been adduced by any documentary evidence to justif.l the inordinate delay. Furthcr the rcasotts for delal which arc g.iven are prima facie nol tenable and superficial 'Ihe asscssee is a regular filer and thc clairn that rvas nol arvard of demand lor the AY 2014 l5 camot bc believed owing to the fact that the pending demands are clearly visiblc il e-filing portal. Thc portal also prompts to respond t0 thc outstanding detnand. -]lax DenaftnlcDt tssucs com tunjcltiotr N'[oreover the Incorne fiom lirne to tirne infomlng about the pcnding detnand. -I herr for:. it is dillloult to bclieve that assessee was no1 a\\'arc of the p,:nding demand and came lo knou about il on 09.06.2023. - 5 HCJ (AKrS, J) & GNIM, J w.P.No.275t2 of 2025 As an institutional assessee with dedlcated tax handling mechanisms, a reasonablc standard of diligence is expected, including periodic reviews of the e-frling portal and follow up of pending requests. 12. While the assessee relbrred to judicial prccedcnts, however, those were rendered in contexts where the delay was found to be reasonable and not excessive. In the present case, the delay of 91 months carmot be considered as a mcrs unaware of lacts, but, has to be called a mattcr involving inordinate delay, gross negligence and laches. Henoe, it is held that nojustifiable "sufhcient cause" as required under the proviso to Section 264(3) has been demonstrated to condone this extraordinary delay. 13- Further, as per assessee's letter dated 22.07.2025 receled in this ollroe ot 25.07.2025, it was rcquested to grant another opporturuty ofhearing to further explain and support the case. [n this regard, it is important to bring on record that vide the aforementioned lettcr dated 22.07.2025 it was duly acknowledged about the personal hearing tllat was alrcady conducted on

10.07.2025. Accordingly, sinoe the matter has been clearly demonstrated by the assessee tfuough the submissions as well as personal hearing, there remains no further need to give repeated hearing and accordrngly the case rs bcing finalized without granting any further opportunity."

3. Learned Senior Counsel for the petitioner has reiterated the grounds taken in the application for condonation of delay before this Courl while assailing the impugned rejection order. He has placed reliance on the decision of the Apex Courl in N. Balakrishnan v. M. Krishnamurthyr. Paras 9 to 13 of the saidjudgment read as under: ' 1rs98y z scc tz: 6 l{CJ ,\XrS. J)& GN'lNr. J $ P No.275l? of 2025 *9. L is axiotnatic that oondorration of delay is a matter ol discrcticn ol the court. Section 5 of the Limitation Act docs not say that srch discretion oan be exercised only rf the delay is wilhin r c(:rtain limit- Leng1h of delay is no matter, acceptability of the ,;xplanation is the only criterion. Sometimes dclay ol the shortosr range may be uncondonable due to want ol acceptable explan;Ltio,r rvhcreas tn certain other cases delay of very long range can be condoned as the explanation thereol is satistactory. Once tlre court accepts the explanation as sufficient it is the rcsult ofposi:ive exercise of discretion and normally the superior oourt should not disturb such finding, much less in revistonal jurisdiction, unless the exercise of discretion was on wholly untcnable grounds or arbitrary or perverse, But it is a dillcrenr matter u,h,in the first court refuses to condone the delay. [n suclt cases, lhe superior court would be free to constder thc arause shorvn tbr thc dclay afresh and it is open to such superior cotrrt to corne tl its own hnding even untrammeled by the conclusion of the lou (jr court. 10. l-he rcason for such a different stance is thus: 'l'he primary function of a court is to adjudicate the disputc bctweel tl]e parties and to advancc subslantial .justice Trme Iirnit tlxed lbr approaching the court in different siLuations is not bccaus: ol the expiry of such time a bad causc would translorm llllo.1 llur,'lcause. I l. l{ul:s of limitation are no[ meant to destroy thc rights of parties Tlrey are mcant to sec that Partres do not resort to dilatory tactics, but seek their remedy promptly, The object of providing a legal r;rrr:dy is to repair thc damage caused by reason o1-legal injury. La.r of limitation fixes a lifespan for such legal remedy fbr tl)e rec,ress of the legal injury so suff'ered. Time is preoious and wasted turle would never revisit. During the efflux of time, newer causcs rvculd sprout up necessitating ncwer persons to scek legal rcmedy, by'approaching the courts. So a lifespan must be tixcd lor each rcmcdy. Unending penod for launching the remedy ma1 lead to unendurg unce(ainty and consequential anarchy. Thc Larv of Iimitat on rs tl.rtLs founded on public policy. It is cnshrincd in thc lrlaxirlr rirrsrc.rt reipublicae ttlt sil.fints litturu (rt rs lbr the gcncral t I I i i : . 7 HCJ (AKrS. Jl & GNIM. J w P No 27512 0t2025 w€lfarc that a perrod be put to litigation). Rules of Iimitation arc not meant to destroy the rights ol the parties. They are meant to see that parties do not resort to dilatory tactics but seck thcir remedy promptly. The idea is that every legal remedy must be kept alive for a legislativcly fixed period oltirne. 12. A coun k-nows that relusal tu condone rlelay would resulr in loreclosing a suitor from putting forth his cause. 'fherc is no presumption that delay in approaching the court is always deliberate. This Couft has held that thc words ,'sufficient cause" under Section 5 of the Linitation Act should receive a liberal construction so as to advance substantial justice vid,e Shakuntala Devi Jain l/s. Kuntal Kuruuri fAlR 1969 SC 5751 and Stute of West llengal [/s. The Admirustrator, Howrah Munici7xttity IAIR 1972 SC 749). ll. It must be remembered that in evcry casc ofdelay there can be some lapsc on the part of the litigant ooncerned. That alone is not enough to tum down his plea and to shut the door against him. If thc explanation does not smack of mala fides or it rs not put forth as part of a dilatory strategy the court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party dcliberately to gain time then the court should lean against acceptauce ol the explanation. While oondoning delay the court sl.rould uot lorgct the opposite party altogether. It must be bome in mind that he is a Ioser and he too would have incurred quite a large litigation expenses. It would be a salutary guideline that when courts condone the delay due to laches on the part of the applicant the court shalI compensate the opposite party for his loss." It is submitted that the petitioner has not resorted to ditatory tactics. It was not going to benefit by approaching the revisional authority after such delay. The reasons for delay have been well-explained. This Court therefore should .\.P \o 27St2 o:'2025 consider thc ;ause shown for the delay afresh and come to its own finding untrammeled by the conclusion of the lower - Court. The ocject of providing a legal remedy is to repair the damage caus,:d by reason of legal injury. He has also placed reliance on the decision of Bombay High Court in Bharatiya Engineering Oorporation Pvt. Ltd. v. Additional Commissioner of Incorne-tax2 and submitted that the learned Courl has also taken note ol the letters of Central Board of Direct Taxes submitted ltetbre the Public Accounts Committee in the year 1967-68 in nratters relating to condonation of delay in refund cases. It ir; s;ubmitted that if the exemption under Section l0(25) ot'the Act shown on provident fund is not allowed, the loss would be ultimately to the employees concerned. The learned Comrnissioner refused to make any obselvation as to thc correctrress of the intimation dated01.12.2016. Therefore, the impugn,ad order may be set aside. 4 Learned counsel for the Revenue has strongly opposed the submissions. She submits that the Commissioner has accorded personal hearing to the petitioner and taken note of (1979) 1 faxrnan.l: I (Bombay) twlF;*.*- 9 llCJ lAKrS. J) & CMIt. J ll P lo 27r 12 ot rO25 all the grounds raised by thc assessee. The rejection ol rectification application was uploaded on Income Tax portal on 0l . 12.2016. Petitioner is an institutional assessee with dedicated tax handling mechanisms and is expected to exercise a reasonable standard of diligence and periodic reviews of the e-filing portal and follow-up of pending requests. Therefore, thc explanation fumished by the petitioncr Ibr gross delay ol 9l months cannot at all be considered as sufficient to condone the delay when the provision under Section 264(3) prcscribes lirnit ol one year for filing of such rcvision petitions. perusal of the decision ln the case of Bharatiya Engineering Corporation Pvt. Ltd., (supra) woutd show that the delav was only two years u,hich the learned Courl considered it proper to condonc. The present case suffers from delay of seven (7) years for which no sufficient cause lras becn shown. It is submitted that even by the ratio rendered by the Apex Court in thc case of N. Balakrishnan (supra), the petitioner Trust is under an obligation to show sulficient cause otherwise such inordinate unexplained delay should not be condoned. The order of rejection there[ore docs r.rot suft-cr fio rn any illegality rvh ic [r req I ilr(] s intert-ercrtcc uuder Article

22.6 of the - Constitr-rtion ol- [ ndizr'

5. We have accordecl considerable hearing to learned counseI lor ttr,: parties ol'l tlic issue involved i'e', rvl-rether tl.re petitioner irad lLrrnished sufficient cause for conclonation of delay of sevcn (7) be fore PCI-l' against the re.iection of its application lbr in preferring the revision petltton rectification aqainst disallou'ance of exemption under Section 10(25) oithc ,\ct lbr the Assesstncnt Year 2014-15

6. Upon licarinu thc learned counscl for the parties and afier pcrusinlt the grour.rds laised and the findings of the learned PCI'l' orr this issue, \'\'e are ol the considcred opinion that the pelitioner has not been able to furnish sufflcient cause for filing tlte rcvisiot.t uearly sevcn (7) years alter rejection of application orr 0l . I 2.2016 u'hich rvas also uploaded in lncotnc -[ax portal. The petitioner being an institutional asscssee obliged to ik: tax rcturtl lbr cvcry assessmellt yeat'is expected to contirrnr t,l rcasonable stalldards of diligence in t-natlers relating to t,lx. ['[re qucstion herein is not whether such erernption:; !\ ere illlo\\'ed irl 1'avour of the assessee Ibr b n - prcvious or subsequent years. The question herein is as to 11 HCJ (AKrS. J) & GI{|!'I. J w P No.27512 o1202-5 r,vhetl'rcr the pctitioner has furnished sufficient cause for preferring a revision petition nearly SEVEN (7) years after rejection of its rectification application. Guided by the principles laid down by the Apex Court in N' Balakrishnan (supra), on independent consideration also, we do not find any suffrcient cause made out for explaining such inordinate delay on the part of the assessee. The findings of the learned PCIT therefore do not suffer from any infirmity calling for interf'erence by this Court under Article 226 of the Constitution of India The instant Writ Petition is accordingly dismissed' There shall be no order as to costs. Miscellaneous applications, if any pending, shall stand closed. //TRUE COPY// . M. JAWAHAR REDDY SISTANT REGISTR SECTION OFFICER One CC to SRI K PRATIK REDDY, Advocate [OP One CC to SIrilT BOKARO SAPNA REDDY, Sr. SC FOR lT [OPUC] One CC to SRI N.BHUJANGA RAO, Sr. COUNSEL FOR CENTRAL GOVT loPUCl One CC to DEPUTY SOLICITOR GENERIAL OF INDIA, High Court for the State of Telangana at Hyderabad [OPUC] Two CD Copies To, 1 2 3 4 5 BSR IMN/T HIGH COURT DATED:1210912025 ORDER WP.No.27512 of 2025 J lOt,t){ ! I 3 ,.t, i',..'Y* '\ \ 2 0[i zut D f.(:'.,3 y ,-,1r,1 { DISMISSING THE WRIT PETITION, WITHOUT COSTS k J