For the sake of the Holy Prophet (Sallallahu alaihi wa sallam), Allah (Subhanahu wa Ta’ala) has graced this Ummah with His immeasurable mercy and benevolence. The Ummah of the past Prophets had very strict rules to get their sins forgiven, to the extent that when Bani Israil took the calf to be their god, they were ordered. It is given in the Holy Quran:
And when Musa (Moses) said to his people: ‘O my people, no doubt you have (seriously) wronged your own souls in taking the calf (as your god). Now turn in repentance to your Creator (the True Sustainer). So, kill one another (among yourselves so that those who have not taken the calf for worship and stuck to their religion should kill those who worshipped the calf as punishment for turning away from their religion. This (act) would be the best (repentance) for you in the sight of your Creator.’ Then He accepted your repentance. Surely, He is Most Relenting, Ever-Merciful. (Surah Al Baqarah (2:54))
On the other hand, the Holy Prophet (Sallallahu alaihi wa sallam) told us:
Say: ‘O servants of Mine who have wronged their souls, do not lose hope of Allah’s Mercy. Assuredly, Allah forgives all sins (and excesses). He is certainly Most Forgiving, Ever-Merciful. (Surah Zumar (39:53))
Allah's (Subhanahu wa Ta’ala) mercy is forever raining on us, but especially for the sake of the sinful worshippers, Allah (Subhanahu wa Ta’ala) has fixed some special days and nights for forgiveness of sins and pardon.
The Holy Prophet (Sallallahu alaihi wa sallam) is forever worried about His Ummah. Day and night, He (Sallallahu alaihi wa sallam) keeps praying to Allah (Subhanahu wa Ta’ala) to forgive and pardon His Ummah. Allah (Subhanahu wa Ta’ala) too wants to see His Beloved Prophet (Sallallahu alaihi wa sallam) pleased and happy, so for the sake of the Holy Prophet (Sallallahu alaihi wa sallam), in the last portion of every night, He graces the worldly skies with His presence and grants the treasures of forgiveness, deliverance and success to His worshippers. Only His favorite worshippers benefit from these blessings. As Allah (Subhanahu wa Ta’ala) says:
They used to sleep at night only for a short while, (17) And used to (get up and) seek forgiveness in the later part of the night; (18) And in their wealth and possessions (was remembered) the right of the (needy), him who asked and him who (for some reason) was prevented (from asking).Surah Adh-Dhariyat (51:17, 18)
The lay people, they are neither used to worshipping in the nights nor used to getting up in the early hours of the morning to get up and pray.
Allah (Subhanahu wa Ta’ala) willed that all the slaves of His Beloved Prophet (Sallallahu alaihi wa sallam) should benefit from His mercy. Thus, He fixed one night in the 12 months of the year in which the Lord Almighty, Allah (Subhanahu wa Ta’ala) graces the sky of this world from sunset itself and grants His forgiveness and pardon to all those who ask for it. As the Holy Prophet (Sallallahu alaihi wa sallam) has said that Sha’abaan is His month, so Allah (Subhanahu wa Ta’ala) has kept this blessed night in the month of Sha’abaan.