Ignorance of Tax Law Not a Genuine Ground for Late Return Condonation: Delhi HC

Manjit Singh Dhaliwal Vs CIT International Taxation (Delhi High Court)

The Delhi High Court dismissed a writ petition challenging the rejection of an application seeking condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961 for filing the Income Tax Return (ITR) for Assessment Year (AY) 2020–21. The petitioner, a non-resident senior citizen residing in Canada, had sought condonation on grounds of lack of prior tax liability in India, unawareness of tax implications arising from sale of immovable property in India, health issues, COVID-related travel restrictions, and ignorance of tax laws. During AY 2020–21, the petitioner sold immovable property in India for ₹2,00,16,550 and earned bank interest of ₹19,246, with tax deducted at source by the buyers.

The tax authority rejected the application, holding that condonation under Section 119(2)(b) requires proof of “genuine hardship,” which was not established. The authority found that ignorance of law is not a valid excuse, health issues cited related to surgeries conducted more than a decade earlier, and COVID travel restrictions were irrelevant as ITRs could be filed online from abroad. It was further noted that capital gains are taxable in the year of transfer and not receipt, and statutory timelines under the Act must be strictly adhered to.