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TaxTMI 
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2004 (6) TMI 26
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....ly, the Assessing Officer passed rectification order dated December 11, 1986, for the assessment year 1984-85. The rectification orders were passed for reducing the amount of depreciation granted by reducing the cost of the assets in the hands of the petitioner by the amount of subsidy which was obtained by the petitioner. The petitioner did not challenge the aforesaid orders dated September 5/December 11, 1986, either in appeal or revision or by filing any application under section 154 of the Act. However, on April 19, 1995, the petitioner filed three separate revision petitions for the above assessment years contending that in view of the judgment of the hon'ble Supreme Court in CIT v. P.J. Chemicals Ltd. [1994] 210 ITR 830, the Government subsidy is an incentive not for the specific purpose of meeting a portion of the cost of the assets, though quantified as a percentage of such cost and that the subsidy does not partake of the character of a payment intended either directly or indirectly to meet the actual cost of the assets. According to the petitioner, the facts of the case fell within the four corners of the decision and, therefore, the petitioner was entitled to depreciatio....
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....de pronouncements on the controversy in question between 1987 and 1992 and in fact this court, being the jurisdictional High Court, had also held in CIT v. Grace Paper Industries (P.) Ltd. [1990] 183 ITR 591 that general subsidy granted for giving incentives to the industrialists for establishing industries in backward area was not to be reduced from the cost of acquisition of the assets. The decision was rendered and reported in the year 1990. Even after the said decision, the petitioner had not filed any appeal, revision or rectification application and thus, the petitioner had abandoned his right to challenge the rectification orders made in the year 1986. The petitioner having abandoned his right to challenge those orders cannot be permitted to wake up several years after the judgment of the Gujarat High Court and to challenge the rectification orders passed in the year 1986 by filing revision petitions in the year 1995. It is submitted that there has to be some finality in assessment proceedings and the matters cannot be allowed to be reopened after passage of so many years. Reliance is placed on the decisions in Kerala Urban Development Finance Corporation Ltd. v. CIT [1987] ....
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....ding upon the facts and circumstances of each case and has to be established on record. An application seeking condonation of delay has also to establish that mere was no negligence or inaction or want of bona fides and that the right granted under law to challenge the order was not abandoned. It cannot be overlooked that on expiry of the period of limitation prescribed for seeking legal remedy, a corresponding right accrues in favour of the other party and the same should not be lightly interfered with. Coming to the facts of the present case, there is nothing on record to show that after the rectification orders were passed in the year 1986, the petitioner ever made any grievance or made any attempt to seek any relief before any forum for as many as eight years. In para. 2.3 of the petition, the petitioner has stated as under: "2.3 The said issue (the question of reducing the cost of acquisition of assets by the amount of subsidy) was the subject-matter of controversy at the relevant time as is evident from the fact that even there was conflict of views between different High Courts on this issue. Under the circumstances, the petitioner did not take any action on the rectificat....
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.... condone the delay for sufficient cause. The petitioner requested for condonation of delay on the ground that the decision of the Supreme Court had changed the whole law on b the subject and, therefore, there was sufficient cause for condonation of delay. The Commissioner of Income-tax refused to condone the delay and dismissed the revision application as time-barred, The petitioner thereupon approached this court. Allowing the petition, this court held that the decision of the Supreme Court amounted to a declaration of law as contemplated by article 141 of the Constitution and this declaration had retrospective effect and rendered the assessment of the expenditure in question as capital expenditure. Apparent illegality crept into the assessment and became quite apparent only because of the decision of the Supreme Court. It was, therefore, only after the decision of the Supreme Court that the petitioner had reason to move the Commissioner of Income-tax in revision. Learned counsel for the petitioner has referred to the aforesaid observations of this court and submitted that the pronouncement of the Supreme Court furnishes a ground for condonation of delay, even if it is after sever....
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....ed in March, 1990, and reported in the same year ([1990] 183 ITR 591) that general subsidy granted for giving incentives to the industrialists for establishing industries in backward areas was not to be reduced from the cost of acquisition of the assets. Not a whisper is made by the assessee either in his application before the Commissioner of Income-tax or in the memo of the petition before this court or even at the hearing of the petition as to why no attempt was made by the petitioner to seek any relief at that point of time. In fact, even after the decision of this court in Grace Paper Industries's case [1990] 183 ITR 591 rendered in 1990, the petitioner did not take any steps whatsoever for more than four years. In this set of circumstances, the decision in Karam-chand Premchand's case [1975] 101 ITR 46 (Guj) is of no avail to the petitioner. In Saurashtra Cement and Chemical Industries Ltd. v. CIT [1978] 115 ITR 27 (Guj), the Commissioner of Income-tax refused to condone the delay in filing revision application although the petitioner had explained that during the intervening period the petitioner was pursuing his remedies of appeal before the Appellate Assistant Commissione....
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....een agitating the issue in the civil suit which culminated into the special leave petition before the apex court. Under the circumstances, the decision of the apex court in Nand Kishore [1995] 6 SCC 614 cannot advance the petitioner's case any further, when the petitioner had not taken any action or shown any vigilance for a period of more than eight years after the Assessing Officer passed the rectification orders in the year 1986. As regards the decision of the apex court in CIT v. Sunil J. Kinariwala [2003] 259 ITR 10, the decision is on the merits of the controversy and the order of the apex court condoning the delay is not produced before us. As regards the decision of the Bombay High Court in Bharatiya Engineering Corporation P. Ltd. v. R.G. Deshpande, Addl. CIT [1981] 130 ITR 442, that was a case where after the Assessing Officer had passed an adverse order, the chartered accountant to whom the order was sent was unwell and he had not attended to his work for a long time. After the assessee came to know about this fact, the assessee filed a revision petition beyond the period of limitation and the court held that the assessee had sufficient cause for condonation of delay. ....
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....able with the Assessing Officer at the time of rectification, but also that the injustice is apparent and gross. In this connection, we would like to again refer to the decision of this court in Grace Paper Industries' case [1990] 183 ITR 591 which has been approved by the hon'ble Supreme Court in CIT v. P.J. Chemicals Ltd. [1994] 210 ITR 830. Neither this court nor the Supreme Court has held that subsidy per se cannot be deducted from the cost of acquisition of assets. The concerned Government scheme under which the subsidy was given has to be examined. In Grace Paper Industries' case [1990] 183 ITR 591 (Guj) and P.J. Chemicals Ltd.'s case [1994] 210 ITR 830 (SC) it was held that when the subsidy is given to attract the entrepreneurs to set up industries in backward areas and to achieve balanced growth of industries in different regions, some standard or measure may be adopted for granting such subsidy and, therefore, the cost of the fixed assets may be adopted as the basis for grant of subsidy. But there may be other kinds of subsidy which have a direct nexus with meeting a portion of the actual cost of any specific capital assets and, therefore, it would be a question of fact or....