Condonation of delay in tax revision petition for exemption denial seven-year delay not explained, petition dismissed

Application for condonation of delay under s.264(3) addressed sufficiency of cause for a seven-year delay in preferring a revision after rejection of a rectification request relating to denial of exemption u/s 10(25). The court applied the sufficient cause test, observing the rectification rejection was uploaded on the income tax portal and the institutional assessee was obliged to exercise reasonable diligence; relying on N. Balakrishnan principles, no sufficient cause was found. Consequently the PCIT's rejection stood affirmed and the writ petition was dismissed.

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Issues: Whether the petitioner furnished sufficient cause to condone a delay of approximately seven years in filing a revision under Section 264 of the Income-tax Act, 1961 against rejection of its rectification application, and whether the revisional authority's rejection of the condonation request suffers from infirmity warranting interference under Article 226 of the Constitution of India.

Analysis: The statutory framework requires a revision under Section 264 to be filed within one year from the date the order was communicated or from the date the assessee otherwise came to know of it; Section 264(3) contains the proviso on condonation of delay. The revisional authority found the rectification rejection was uploaded on the Income Tax portal on 01.12.2016 and that the petition filed on 28.10.2024 was therefore time-barred by about 91 months. The authority considered the assessee's explanation that the rejection communication went to an ex-employee and that the assessee only discovered the rejection later via a recovery notice, but held there was no documentary evidence to substantiate unavoidable cause, and emphasized the expectations of an institutional assessee to exercise reasonable diligence, monitor the e-filing portal and follow up pending demands. The authority applied precedent on condonation of delay (including the principle that length of delay is relevant but acceptability of explanation is the decisive criterion) and concluded the delay constituted inordinate delay, gross negligence and laches; the High Court independently reviewed the facts and law, applied the principles in N. Balakrishnan v. M. Krishnamurthy regarding sufficiency of explanation and discretionary review, and found no sufficient cause to disturb the revisional authority's decision.

Conclusion: The petitioner did not demonstrate sufficient cause to condone the seven-year delay in filing the revision under Section 264; the revisional authority's rejection of the condonation request is not vitiated by illegality and does not warrant interference under Article 226. The writ petition is dismissed.

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