Delhi High Court Allows Section 119(2)(b) Application For Revised Return Where Same Interest Income Was Taxed In Two Assessment Years

The Case

SOJITZ ASIA PTE. LTD. Vs THE COMMISSIONER OF INCOME TAX (INTERNATIONAL TAX), NEW DELHI & ORS.
Case No.: W.P.(C)/7495/2026
Decided on: 09/07/2026
CNR: DLHC010241622026 ·
High Court of Delhi

The Legal Issue

The Court was called upon to decide whether the CIT (IT) was justified in rejecting the petitioner's application under Section 119(2)(b) of the Income Tax Act, 1961 on the ground that there were no special circumstances warranting exercise of discretionary power to accept a revised return beyond six years. The petitioner had offered the very same interest income of Rs.7,58,90,455/- for tax in two assessment years, namely 2016-17 and 2018-19, because the deductor had revised Form 26AS. The question was whether such facts constituted special circumstances and genuine hardship warranting condonation of delay.

Facts of the Case

The petitioner earned interest income of Rs.7,58,90,455/- which was reflected in Form No. 26AS for assessment year 2016-17 and the petitioner filed its return of income for assessment year 2016-17 and offered such income for tax. Later on, the payee or deductor revised such Form 26AS and showed the very same amount in assessment year 2018-19 in place of assessment year 2016-17. The petitioner offered the very same amount for tax for assessment year 2018-19, least realising that the very same amount had already been offered by it for tax for assessment year 2016-17. On realising the mistake, the petitioner filed three rectification applications dated 04.03.2019, 07.06.2019 and 31.07.2019 under Section 154 of the Act of 1961, which were kept pending by the AO for three years; ultimately the application dated 31.07.2019 was rejected by the AO on 26.12.2022 holding that he lacked the power to reduce returned gross total income. The petitioner's revision applications under Section 264 were rejected by the CIT (IT) vide orders dated 30.03.2021 and 28.03.2024. The petitioner then moved an application dated 31.07.2024 under Section 119(2)(b) of the Act which was filed on 05.08.2024, praying that it be allowed to file a revised return excluding the aforesaid amount from its income for assessment year 2016-17, which was rejected by the CIT (IT) vide order dated 09.12.2025.

Summary of the Decision

The Court held that the CIT (IT) had seriously erred in concluding that there were no special circumstances warranting exercise of discretionary power under Section 119(2)(b) of the Act of 1961. According to the Court, special circumstances cannot be confined in a predefined formula or limited expression and have to be inferred and understood from the contextual facts and surrounding circumstances. The Court observed that this was perhaps one of the better cases for exercising discretionary power under Section 119(2)(b). The Court noted that the petitioner had admittedly paid tax on the very same income for two assessment years, whereas tax is required to be paid only once qua one income, and even the Government can charge tax only once in one assessment year on a particular income and not twice. Refusal to grant indulgence amounted to unjust enrichment on the part of the Union of India. The Court also noted that the petitioner had filed three rectification applications immediately within a year of the end of assessment year 2017-18, showing utmost promptitude, and it was only because of the delay dallying tactics or non-cooperative attitude of the respondents that the petitioner had to roam from pillar to post for about six years. The Court held that paying tax twice over the same income by itself is a hardship. Accordingly, the petition was allowed; the impugned order dated 09.12.2025 passed by the Commissioner of Income Tax (International Taxation-3, Delhi) was quashed and set aside; the petitioner's application under Section 119(2)(b) dated 31.07.2024 was allowed; the petitioner was allowed to file online/offline revised return of income for assessment year 2016-17 on or before 31.10.2026; and on revised return being filed, the Assessing Officer was directed to consider the same in accordance with law and after verifying the facts, pass appropriate order within a period of three months from the date of filing of revised return of income. Pending application stood disposed of.

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