As per ASME31.3 article 302.2.4 Which is basically on allowance for pressure and temperature variation.
In this article para f (2) it says that when the variation is self limiting( i.e presure relief ) and last no more than 50Hr at one time and not more than 500hr in a year. it is permissible to exceed the pr rating or the allowable for pr design at the temp of the increased condition by not more than 20%.

1) My question is, Can i interpret it as when we are doing analysis for pressure relief valve (PSV) we can exceed the allowable stresses by 20%.What i understood is Since in case of psv load the Longitudinal stress induced is purely a function of pressure

Since code doesn't say about the combination of stresses for PSV.Since it is a non-cyclic stress my assumption is addition of stresses is scalar.

So, Stress = Thrust force due to popup / Area of pipe + Longintudinal stress due to pr + Weight ( which is a fixeed perameter.

So we can say that the stress is directly proportional to pressure.and hence due to increase in the allowable pressure the allowable stress increase. Am i right Sir.

My interpretation of Paragraph 302.2.4.f.2 is that this refers to the design/rating of the individual component (for Paragraph 304.1.2), not the entire piping system.

Paragraph 302.3.6 addresses increasing the allowable stress on a "system wide" level for occasional loads.