Mr. Dharan v. Firdosh P. Pooniwalla, Jj.11[Th] July 2023

IN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTION WRIT PETITION NO.343 OF 2022WITH WRIT PETITION NO.416 OF 2022 Malineee P. Mcmaster … Petitioner V/s. Principal Commissioner of Income Tax & Ors. … Respondents ----- Mr. Dharan V. Gandhi for Petitioner in both Petitions.Mr. Suresh Kumar for Respondents in both Petitions. ----- P. C.:- CORAM :K. R. SHRIRAM & FIRDOSH P. POONIWALLA, JJ.11[th] JULY 2023. DATE : WRIT PETITION NO.343 OF 2022 1.Petitioner, a widow, is a resident of India. Petitioner was earlierresident of United States of America (‘USA’) and returned to India on 7[th]August 2012 on transfer of residence from USA. Since then Petitioner hasbeen a resident of India and has been regularly filing her Return of Income. 2.For the Assessment Year (“AY”) 2016-17 Petitioner filed a Return ofincome on 19[th] July 2016 declaring total income of Rs.28,22,720/-. While inUSA, Petitioner did not pay any taxes as her income was exempt in USA. Mr.Gandhi states that Petitioner moved to India after her husband expired. Petitioner’s minor son lives with Petitioner. Petitioner and her son got US$12,804/-each equivalent to Rs.849,326/-(each) at the prevalent rate ofexchange as social security benefit from Government of USA. The socialsecurity benefit amount that the minor son received was also clubbed withthe income of Petitioner in accordance with the provisions of Section 64 ofthe Income Tax Act 1961(“the Act”) and offered for tax by Petitioner in herReturn of Income for AY 2016-17. The Return of Income was processed andintimation dated 9[th] October 2016 under Section 143(1) of the Act wascommunicated to Petitioner. 3.It is averred in the Petition that some time in the year 2019,Petitioner’s Chartered Accountant realized that the social security benefitthat Petitioner and her minor son received was not chargeable to tax as perClause-2 of Article-20 of the India-USA Double Taxation AvoidanceAgreement (“DTAA”). Petitioner realized that the same was wrongly offeredto tax by Petitioner in her Return of Income. Since Petitioner had notpreferred any Appeal, Petitioner filed an Application on 23[rd] August 2019under Section 264 of the Act for leave to revise the income at Rs.11,25,570/-after deducting Rs. 8,49,326/- X 2 and Petitioner be taxed accordingly.Respondent No.1, by an order dated 30[th] March 2021, rejected thisApplication. Respondent No.1 refused to condone the delay and also has observed that on merit, an opportunity was provided to Petitioner to explainvide communication dated 23[rd] March 2021 but the same has not beenavailed. 4.In the Revision Application, Petitioner has explained the reason for thedelay in the Petition. It is Petitioner’s case that Petitioner has submitted theApplication after she came to know about Article 20 of DTAA (between Indiaand USA). The delay has not been condoned only on the ground thatPetitioner has failed to submit any explanation/supporting documents toprove that she has been prevented by sufficient cause from making thisApplication. We do not understand what supporting documents could besubmitted for the reason given in the Application because Petitioner hassimply stated that she was not aware about the correct position in law untilthe date on which she made the Application. 5.As regards not availing of the opportunity to explain on the merits,Petitioner has, in response to the notice for hearing dated 20[th] March 2021addressed a communication dated 23[rd] March 2021 in which Petitioner hasstated (and we must be conscious of the fact that this was during the peakCovid Pandemic time) that due to Covid it was difficult to approach herrepresentative Shri. Maganlal Thacker, who is 86 years old to submit detailsas required by him and submit proper reply within such a short time. Short 5.As regards not availing of the opportunity to explain on the merits,Petitioner has, in response to the notice for hearing dated 20[th] March 2021addressed a communication dated 23[rd] March 2021 in which Petitioner hasstated (and we must be conscious of the fact that this was during the peakCovid Pandemic time) that due to Covid it was difficult to approach herrepresentative Shri. Maganlal Thacker, who is 86 years old to submit detailsas required by him and submit proper reply within such a short time. Short time is because in the notice dated 20[th] March 2021 Petitioner was informedthat hearing was fixed at 3.00 p.m. on 23[rd] March 2021. Petitioner hadsought eight days time to submit written submissions/representation.Respondent No.2 without considering the request has passed the order on30[th] March 2021 and has incorrectly recorded that the opportunity was notavailed. 6.Therefore, we condone the delay in filing the Application underSection 264 and remand the matter to Respondent No.1 to consider theApplication de-novo on merits. Respondent No.1 before he passes any order,shall give a personal hearing to Petitioner, notice whereof shall becommunicated at least ten working days in advance. 7.Petition disposed. 8.We hasten to add that we have not made any observation on themerits of the matter. WRIT PETITION NO.416 OF 2022 1.The facts in this case are identical to the facts in Writ Petition No.343of 2022, except that the Assessment Year is different-2015-16 in this case.The impugned order is identically worded and the grounds are also identical. 2.In the circumstances, in view of our order passed in Writ PetitionNo.343 of 2022 and the reasons given therein, impugned order dated 30[th]March 2021 in this Petition is also quashed and set aside. 3.We condone the delay in filing the Application under Section 264 andremand the matter to Respondent No.1 to consider the Application de-novoon merits. Respondent No.1, before he passes any order, shall give apersonal hearing to Petitioner, notice whereof shall be communicated at least10 working days in advance. 4.Petition disposed. 5.We hasten to add that we have not made any observation on themerits of the matter.merits of the matter. (FIRDOSH P. POONIWALLA., J.) (K. R. SHRIRAM, J.)