Ravindra vs Income Tax Officer and Another

Viney Mittal, J.—Heard learned Counsel for the parties for final disposal.

The petitioner/assessee is aggrieved against the order dt. 31st Jan., 2007 passed by the CIT-II, Indore u/s 264 of the Income Tax Act, 1961 (hereinafter referred to as ''Act'').

It appears from the record that petitioner/assessee is a bank employee and had filed his return of Income Tax on 27th March, 2002, declaring his income as Rs. 5,21,785. The return filed by the petitioner was processed u/s 143(1) of the Act. The petitioner/assessee had claimed relief u/s 89(1) of the Act and had worked out the tax payable accordingly.

Proceedings u/s 147 of the Act were initiated and a show-cause notice was issued to the petitioner/assessee, which was served upon him on 7th Nov., 2003. Assessment proceedings were completed u/s 147 on 13th May, 2004 at the total income of Rs. 5,21,785, as declared by the assessee, while the relief claimed u/s 89(1) was declined and was withdrawn.

The order under Sections 147 and 143(3) of the Act was passed on 13th May, 2004, but was communicated to the petitioner assessee on 7th Aug., 2004. Against the order of assessment, the petitioner/assessee filed a petition u/s 264 of the Act on 8th Aug., 2005 in the office of CIT-II, Indore.

It is not in dispute that the petition u/s 264 of the Act was required to be filed within one year. The petitioner/assessee claims that he could have filed the petition on or before 6th Aug., 2005, but 6th Aug.. 2005 and 7th Aug., 2005 were closed holidays and as such, the petition was filed on 8th Aug., 2005.

The petition, so filed by the petitioner on 8th Aug., 2005 has been treated to be barred by limitation, even though 6th Aug., 2005 and 7th Aug., 2005 were closed holidays. It has not been treated to be sufficient cause and the petition filed by him has not been treated as having been filed within limitation. It is in these circumstances, that the order dt. 31st Jan., 2007 passed by the CIT, rejecting the petition u/s 264 of the Act, has been challenged by the petitioner/assessee before this Court through the present petition.

The aforesaid facts which have not been disputed by the respondents clearly show that by any standards, the petition filed u/s 264 of the Act by the petitioner/assessee could not have been treated beyond limitation. Even, if the petition was required to be filed within one year from 7th Aug., 2004 i.e., upto 6th Aug., 2005, then 6th Aug., 2005 and 7th Aug., 2005 being closed holidays, the petition was filed on the next opening day i.e. 8th Aug., 2005.

In these circumstances, there was absolutely no delay and the petition could not have been treated as barred by limitation. The order passed by the CIT, is clearly erroneous on facts as well as in law. The same is liable to be set aside and is accordingly set aside.

Consequently, the present petition is allowed. The order dt. 31st Jan., 2007 is set aside and the petition filed u/s 264 of the Act by the petitioner/assessee is restored back to its original number and shall be decided by the CIT in accordance with law. The petitioner through his counsel is directed to appear before the CIT, Indore on 20th Aug., 2007.