Taxing Same Income Twice Amounts To ‘Genuine Hardship’ Under Section 119(2)(b): Delhi HC [Read Judgment]

New Delhi: The Delhi High Court has held that being subjected to tax twice over the very same income itself constitutes "genuine hardship" within the meaning of Section 119(2)(b) of the Income Tax Act, 1961, and has permitted a taxpayer to file a revised return more than six years after the relevant assessment year to correct an inadvertent double offering of income caused by the deductor's own revision of Form 26AS.

A Bench comprising Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta was hearing a writ petition filed by Sojitz Asia Pte. Ltd. against the Commissioner of Income Tax (International Tax), New Delhi, challenging an order dated 09.12.2025 by which the Commissioner of Income Tax (International Taxation)-3, Delhi ["CIT(IT)"] had rejected the petitioner's application under Section 119(2)(b) seeking condonation of delay in filing a revised return.

The petitioner had earned interest income of Rs. 7,58,90,455, reflected in Form No. 26AS for Assessment Year 2016-17, and had offered this income to tax in its return for that year. The deductor subsequently revised Form 26AS, shifting the same amount to Assessment Year 2018-19. Unaware of this revision, the petitioner, going by the revised Form 26AS, again offered the identical amount to tax for Assessment Year 2018-19, resulting in the same income being taxed twice.

On realising the error, the petitioner filed three rectification applications under Section 154 between March and July 2019, which remained pending with the Assessing Officer for three years before the last of them was rejected on 26.12.2022 on the ground that the Assessing Officer lacked the power to reduce the returned gross total income. A revision petition under Section 264 was rejected as premature on 30.03.2021 while the rectification application was pending, and a second revision petition, filed thereafter, was rejected on 28.03.2024 as time-barred, with the petitioner being directed to seek condonation of delay under Section 119(2)(b). The petitioner accordingly moved an application dated 31.07.2024 under that provision, seeking permission to file a revised return for Assessment Year 2016-17 excluding the amount already taxed a second time in Assessment Year 2018-19.

The CIT(IT) rejected this application by order dated 09.12.2025, holding that the power to accept a revised return beyond six years could be exercised only in extraordinary circumstances, that the petitioner had failed to demonstrate any special circumstance, and that the six-year delay was unexplained and not covered by CBDT Circular No. 9/2015 dated 09.06.2015.

Counsel for the petitioner, Mr. Vishal Kalra, argued that the CIT(IT) had adopted a revenue-oriented rather than a justice-oriented approach, that the double offering of income was a bona fide error arising solely because the deductor had revised Form 26AS without any intimation to the petitioner, and that the petitioner had been pursuing its remedy continuously since 2019 and could not be said to have slept over its rights. The Revenue, represented by Mr. Siddharth Sinha, Senior Standing Counsel, countered that the petitioner had repeatedly invoked the wrong remedy, that any resultant delay was attributable to the petitioner itself, and that the CIT(IT) had rightly rejected the application for want of genuine hardship or explained delay.

The Court held that the facts on record clearly established that the same interest income had been offered to tax twice solely because the deductor had revised its Form 26AS from Assessment Year 2016-17 to 2018-19, and that the petitioner had filed its return for the later year bona fide, going by the revised form. It held that the CIT(IT) had erred in finding no special circumstance, observing that special circumstances cannot be confined to a predefined formula and must be inferred from the contextual facts, and that the present case was one of the better instances warranting exercise of the discretionary power under Section 119(2)(b), since tax on a given income is required to be paid only once, and even the Government cannot charge tax twice on the same income in different years.

The Court further held that refusal to grant indulgence would amount to unjust enrichment of the Union of India, which would otherwise have collected tax twice on the same amount, and that paying tax twice over the same income was, by itself, a hardship. It also noted that the petitioner had acted with promptitude by filing rectification applications within a year of the end of Assessment Year 2017-18, and that the roughly six-year delay in redressal was attributable to the delay and non-cooperative attitude of the respondents rather than any inaction on the petitioner's part.

Allowing the petition, the Court quashed the CIT(IT)'s order dated 09.12.2025, allowed the petitioner's application under Section 119(2)(b), and permitted the petitioner to file a revised return of income for Assessment Year 2016-17 on or before 31.10.2026, directing the Assessing Officer to consider the revised return and pass an appropriate order within three months of its filing.

Appearances:

For the Petitioner: Mr. Vishal Kalra, Mr. Ankit Sahini and Mr. Amit Kumar, Advocates.

For the Respondents: Mr. Siddharth Sinha, Senior Standing Counsel, with Ms. Easha Gurung, Junior Standing Counsel, and Mr. Nring Chamwibo Zeliang and Ms. Anu Priya Nisha, Advocates.

Case Title: Sojitz Asia Pte. Ltd. vs. The Commissioner of Income Tax (International Tax), New Delhi & Ors., W.P.(C) 7495/2026

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