VINAY EXTRACTION PVT LIMITED Vs. VIJAY KHANNA

JUDGEMENT

(1.) What is challenged in this petition under Article 226 of the Constitution is the order dated 21.11.1995 (Annexure "A") passed by the Commissioner of Income-tax, Rajkot rejecting the petitioner's application for condonation of delay in filing the revision petitions under Section 264 of the Income-tax Act, 1961 (hereinafter referred to as "the Act") on the ground that the petitioner had not shown sufficient cause for condonation of the delay.

(2.) The relevant AYs are 1982-83, 1983-84 and 1984-85. For the said years, the petitioner filed its returns of income claiming depreciation on the assets acquired by it. The claim was granted. However, the Assessing Officer rectified those orders under Section 154 of the Act and passed two separate rectification orders dated 5.9.1986 for AYs 1982-83 and 1983-84. Similarly, the Assessing Officer passed rectification order dated 11.12.1986 for AY 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 5th September/11th December, 1986 either in appeal or revision or by filing any application under Section 154 of the Act. However, on 19.4.1995 the petitioner filed three separate revision petitions for the above assessment years contending that in view of the judgment of the Hon'ble Supreme in CIT vs. PJ Chemicals Ltd., 121 CTR 291 (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 depreciation on the written down value of the plant and machinery without deducting subsidy therefrom. The ground pleaded by the petitioner for condonation of delay read as under :-

(3.) At the hearing of the petition, Mr Tushar P Hemani, learned counsel for the petitioner has made the following submissions :-