T.U.MEHTA, J. -
(1.)THE petitioner herein is a private limited company and has approached this court in this petition for obtaining writ of certiorari to set aside the order passed by the respondent No. 1, who is the Commissioner of Income -tax, on January 29, 1970, dismissing the petitioner's revision application filed under section 33A of the Indian Income -tax Act of 1922 and section 264(1) of the Income -tax Act of 1961, on the ground of limitation. In the alternative, the petitioner has prayed for a similar writ for setting aside the orders of assessment of is income for the assessment years 1961 -62, 1962 -63, 1963 -64 as they have treated the expenditure incurred in connection with the issue of debentures as capital expenditure, to deductible from the gross income earned by the petitioner during the relevant account periods.
(2.)SHORT facts of the case which from the background of this petition are as under. For the assessment years 1961 -62, 1962 -63 and 1963 -64 the petitioner is said to have incurred expenditure of the sum of Rs. 88,557, Rs. 4,018 and Rs. 47,339, respectively, on account of stamp, duty, registration charges lowers' fees, acceptance fees of the bank and miscellaneous expenses in connection with the issue of ventures secured on all the fixed assets of the petitioner -company. The petitioner, relying upon th e decisions of the Bombay and other High Courts, on the question of deductibility of such expenses, did not specifically claim he deduction thereof from; its gross income in the respective yeas. The Income -tax Officer concerned did not allow these deductions during the course of the respective assessments. These assessments were subsequently or rectified on some other points respectively on April 24, 1965, and October 6, 1965. It is an admitted position that the original [assessment for all these three yeas were respectively made on February 25, 1963, February 14, 1964, and March 26, 1964. The expenditure which the petitioner claims to have incurred on account of the above referred charges was disallowed by the concerned Income -tax Officer presumably on the ground that it amounted to capital expenditure and not revenue expenditure, because this was the view taken by the Bombay and other 3 to 4 High Courts in India.
The case of the petitioner is that subsequently, in the year 1966, the Supreme Court reversed the above view taken by the Bombay and other High Courts in India, the same is reported as India Cements Ltd. v. Commissioner of Income -tax, and held that such expenditure must be treated as revenue expenditure and, therefore, the deduction thereof should be given from the gross income earned by the concerned assessee. The petitioner contends that after it came to know about this decision of the Supreme Court, it moved the Commissioner of Income -tax who is respondent No. 1 by revision application contemplated by section 33A of the Act of 1922 and section 26A of the Act of 1961. This revision application is found to have been made by the petitioner on April 26, 1966, to the first respondent, who is the Commissioner. The matter lay many on the file of the Commissioner for about 2 year, because the record of the case reveals that it was as late as October 7, 1968, that the the Commissioner issued a notice to the petitioner to show cause in writing on or before October 19, 1968, why the revision application filed by it should not be dismissed as time barred. Both sections 33A and 264 provide for a period of limitation of one year from the date of the assessment and further provide hat delay in preferring revision application under these sections can be condoned by the Commissioner, if he is satisfied that the assessee concerned had sufficient cause in not filing the revision application within the time oprescribed by issued by the Commissioner on October 7, 1968. The petitioner gave reply to this show -cause notice on November 20, 1968, as found by reference to annexure 'C' filed along with this writ petition. Therein the petitioner has referred to the view taken by the Bombay and other High Courts on the disputed question as regards the allowance of such expenditure as revenue expenditure. The petitioner has further pointed out that the decision given by the Supreme Court in India Cements Ltd., made a total difference and changed the whole law on the subject and, therefore, it approached the Commissioner by revision application soon after knowing about this decision of the Supreme Court. It is an admitted position that the petitioner in view of these circumstances requested the Commissioner to condone the delay. The Commissioner, however, after hearing the parties, gave his decision on January 29, 1970, refusing to condone the delay. This order is found at annexure 'D'. Reference to it shows that the commissioner was of the opinion that the fact that the Supreme Court had taken a different view was not a valid ground for condoning delay in filing the revision application. According to the Commissioner, if the petitioner had any doubt in the matter he should have kept the matter alive by taking appropriate action in good time. For this reason the Commissioner dismissed the revision application filed by the petitioner on the ground of limitation. It is against this order that this writ petition is preferred by the petitioner.
(3.)AS stated above, the contentions raised by the petitioner in this writ petition are two -fold. Its first contention is direction against the Commissioner's order rejecting its revision application on the ground of bar of limitation and its second contention is directed against the original assessments on the ground that these assessments contain an apparent error of law, inasmuch as the expenditure which ought to have been treated as revenue expenditure, was treated as capital expenditure during the course of the original assessments. According to the petitioner, the decision of the Supreme Court in India Cements Ltd. has rendered the assessment as regards capital expenditure incurred in connection with the issue of debentures bad and illegal at the very inception and since the said assessments were the result of a mistake of law common to both the parties, provisions of section 72 of the Indian Contract Act apply and, therefore, the tax recovery under the said mistake of law should be refunded back to it.