Section 10(10C) exemption cannot be denied solely for delayed revised return where CBDT relaxation and Supreme Court relief apply.

Where a binding Supreme Court ruling and a CBDT circular extend Section 10(10C) exemption to similarly placed retirees, procedural delay in filing a revised return under Section 139(5) should not by itself defeat the substantive benefit. The Madras HC treated the assessee's Early Retirement Option Scheme claim as covered by the relaxation power under Section 119, including Section 119(2)(c), to prevent genuine hardship, and held that relief could not be denied solely on limitation grounds. The result was recognition of the exemption and refund, while interest on the refund was declined.

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Issues: Whether the assessee could be denied exemption under Section 10(10C) of the Income-tax Act, 1961 merely because the revised return was filed beyond the time limit under Section 139(5) of the Income-tax Act, 1961, and whether the authorities were bound to grant relief in view of the Supreme Court decision and the CBDT circular issued under Section 119 of the Income-tax Act, 1961.

Analysis: The petitioner had retired under the Early Retirement Option Scheme and claimed exemption following the Supreme Court ruling recognising entitlement under Section 10(10C). The CBDT thereafter issued a circular directing that the benefit be extended to similarly placed retirees, and such instructions were issued under Section 119, which empowers the Board to issue binding directions to subordinate authorities and to relax requirements in appropriate cases. The Court noted that the case fell within a class of similarly placed persons and that the petitioner should not be non-suited solely on the ground that the revised return was filed beyond the period prescribed in Section 139(5). The Court also referred to the power under Section 119(2)(c) to relax requirements to avoid genuine hardship, and held that the petitioner's case warranted such relief.

Conclusion: The petitioner was entitled to the exemption under Section 10(10C), and the rejection of the revised return on the ground of delay under Section 139(5) could not stand.

Final Conclusion: The writ petition succeeded in substance to the extent of securing exemption and refund, while the claim for interest was declined.

Ratio Decidendi: Where a binding judicial pronouncement and a CBDT circular extend a tax exemption to a class of similarly placed assessees, procedural delay in filing a revised return cannot by itself defeat the substantive benefit when the case falls within the relaxation power under Section 119.

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