Retrospective change in law can justify condonation of delay in tax revision when earlier legal position was unsettled.

A later Supreme Court declaration that expenditure on debentures was not capital expenditure could justify condonation of delay in filing revision applications, because the earlier contrary view of several High Courts had left the law unsettled. The retrospective operation of that declaration under Article 141 meant the petitioner had sufficient cause for not invoking revision earlier under section 33A of the Indian Income-tax Act, 1922 and section 264(1) of the Income-tax Act, 1961. The Commissioner's refusal to condone the delay was therefore erroneous, and the limitation bar could not be sustained; the revisions had to be considered on merits.

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Issues: Whether the delay in filing the revision applications under section 33A of the Indian Income-tax Act, 1922 and section 264(1) of the Income-tax Act, 1961 could be condoned on the ground that the legal position was unsettled until the Supreme Court declared the law in India Cements Ltd.; and whether the Commissioner was justified in rejecting the revision applications as time-barred.

Analysis: The petitioner had not pursued the revision remedy earlier because, at the relevant time, the prevailing view of several High Courts treated expenditure incurred for raising debentures as capital expenditure. That position changed only when the Supreme Court declared the law to the contrary, and the judgment treated that declaration as operating retrospectively under article 141 of the Constitution of India. On that basis, the Court held that the petitioner had sufficient cause for not filing the revisions within time. The Commissioner's refusal to condone the delay was therefore a palpable error, and the Court held that interference under article 226 of the Constitution of India was warranted.

Conclusion: The delay in filing the revision applications had to be condoned, and the Commissioner's order dismissing them as barred by limitation could not stand.

Final Conclusion: The writ petition succeeded to the extent that the limitation objection was set aside and the revision applications were directed to be decided on merits.

Ratio Decidendi: Where a later declaration of law by the Supreme Court materially changes an earlier settled legal position, that change may constitute sufficient cause for delay in seeking revision, and the revisional authority must consider condonation on that basis.

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