Sojitz Asia Pte. Ltd Vs CIT (Delhi High Court)
Summary: The Delhi High Court allowed Sojitz Asia Pte. Ltd.’s petition concerning interest income of Rs.7,58,90,455/- offered to tax in both AY 2016-17 and AY 2018-19. The petitioner initially disclosed the income for AY 2016-17 because it appeared in Form 26AS. The deductor subsequently revised the statement and reflected the same amount for AY 2018-19. Following that statement, the petitioner again offered the amount to tax, without realising that it had already paid tax on the same income.
After discovering the mistake, the petitioner filed three rectification applications under Section 154 of the Income Tax Act, 1961, dated 04.03.2019, 07.06.2019 and 31.07.2019. These remained pending for three years, and the application dated 31.07.2019 was rejected on 26.12.2022 on the ground that the Assessing Officer lacked power to reduce returned gross total income. Meanwhile, a revision application under Section 264 was rejected on 30.03.2021 as premature because rectification was pending. A subsequent revision application was rejected on 28.03.2024 as beyond limitation, with the petitioner directed to seek condonation for filing a revised return.
The petitioner accordingly submitted an application dated 31.07.2024, filed on 05.08.2024, under Section 119(2)(b), seeking permission to revise its AY 2016-17 return by excluding the duplicated income. The CIT(IT) rejected the application, stating that acceptance of a revised return beyond six years required extraordinary circumstances, that no special circumstances had been demonstrated, and that the unexplained delay was not covered by CBDT Circular No. 9/2015 dated 09.06.2015.
The petitioner argued that the duplication arose from the deductor’s revision without intimation, that the error was inadvertent, and that it had pursued remedies since 2019. Revenue submitted that the petitioner had repeatedly invoked the wrong remedy, was responsible for the elapsed period, and had failed to establish that the income did not pertain to AY 2016-17 or demonstrate genuine hardship.
The Court held that special circumstances must be understood from the contextual facts and surrounding circumstances rather than confined to a predefined formula. The same income had been offered to tax in two assessment years, although the Government could charge tax only once on that particular income. Refusal to grant relief amounted to unjust enrichment if the petitioner’s assertions were correct. The Court also found that the rectification applications demonstrated prompt action and attributed the prolonged redressal to the respondents’ delay and non-cooperative attitude. Paying tax twice on the same income was itself hardship. It expressly refrained from deciding the correctness of the AO’s view on reducing gross total income, as that order had not been challenged.
The Court quashed the CIT(IT)’s order dated 09.12.2025 and allowed the application dated 31.07.2024. It permitted an online or offline revised return for AY 2016-17 on or before 31.10.2026. Upon filing, the AO must verify the facts, consider the return in accordance with law, and pass an appropriate order within three months. The relief therefore permits revision and examination of the claim; the operative directions require factual verification before the AO’s order.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. The petitioner has approached this Court with a peculiar but a genuine grievance – the petitioner had earned an interest income of Rs.7,58,90,455/-and as the same was reflected in Form No. 26AS for the assessment year 2016-17. The petitioner filed its return of income for assessment year 201617 and offered such income for tax.
2. 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 (Rs.7,58,90,455/-) for tax for assessment year 2018-19 again, least realising that the very same amount had already been offered by it for tax for assessment year 2016-17 and that this amount has been reflected in Form 26AS due to earlier Form 26AS for assessment year 2016-17 being revised by the deductor
3. Subsequently, when the petitioner realised its mistake and that the tax on this amount has already been paid in the assessment year 2016-17, it filed three rectification applications (dated 04.03.2019, 07.06.2019 and 31.07.2019) under Section 154 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act of 1961’) which were kept pending by the AO for three years. Ultimately, the application dated 31.07.2019 came to be rejected by the AO on 26.12.2022 holding that he lacked the power to reduce returned gross total income.
4. In the meantime, the petitioner moved a revision application under Section 264 of the Act of 1961, which was rejected by the Commissioner of Income Tax (International Taxation)-3, New Delhi, (hereinafter referred to as ‘CIT (IT)] vide order dated 30.03.2021 holding it to be premature as the aforesaid rectification application was pending with the Assessing Officer.
5. After rejection of the above referred rectification application, the petitioner again moved revision application under Section 264 of the Act of 1961, which was rejected vide order dated 28.03.2024, inter-alia, holding that the same was beyond the prescribed period of limitation and that the assessee should seek condonation of delay in filing revised return, as provided under Section 119(2)(b) of the Act of 1961.
6. Faced with such situation, the petitioner moved an application dated 31.07.2024 under Section 119(2)(b) of the Act which was filed on 05.08.2024 and prayed that he be allowed to file a revised return, excluding the aforesaid amount of Rs.7,58,90,455/- from its income for assessment year 2016-17, as tax has been paid on this amount in assessment year 201819.
7. The CIT(IT) vide order dated 09.12.2025 rejected the petitioner’s aforesaid application under Section 119(2)(b) of the Act of 1961 by observing that such power to accept revised return beyond six years can be exercised only in extraordinary circumstances, whereas, the assessee has failed to demonstrate existence of any special circumstances. According to the CIT(IT), the delay of 6 years is unexplained and not covered by Circular No. 9/2015 dated 09.06.2015 issued by the CBDT.
8. Mr. Kalra, learned counsel for the petitioner impugning the order of the CIT(IT) argued that the CIT(IT) has adopted a revenue oriented and subjective approach rather than applying justice oriented approach. He submitted that the facts in the instant case are apparent that only because of the inadvertence, the petitioner had offered the very same amount for tax in two assessment years viz., 2016-17 and 2018-19. He added that this error had occurred because the deductor had earlier reflected this amount in Form No.26AS for assessment year 2016-17 and later on revised the same without any intimation to the petitioner and reflected this amount for assessment year 2018-19.
9. Learned counsel submitted that the petitioner has not been sleeping over its rights; it has been pursuing its remedy ever since 2019.
10. Mr.Siddharth Sinha, learned Senior Standing Counsel, on the other hand, submitted that maybe the petitioner had filed one application after another, but has always invoked wrong remedy and if in this process, it has spent 6 years, the petitioner itself has to be thanked. So far as the CIT(IT) is concerned, he was justified in rejecting petitioner’s application, as the same suffered from delay and laches of 6 years and because the petitioner had failed to lead any evidence that such income did not relate to assessment year 2016-17 and that the petitioner has failed to show genuine hardship.
11. Heard learned counsel for the parties.
12. A perusal of the facts on record clearly reveals that the interest income of Rs.7,58,90,455/- has been offered for tax in two assessment years, namely, 2016-17 and 2018-19 because the deductor had earlier shown it for assessment year 2016-17 but later revised its Form 26AS and showed it for assessment year 2018-19.
13. The assessee bona fidely filed its return for assessment year 2018-19, as per Form 26AS for assessment year 2018-19. The petitioner realized this fact that it has paid tax on the very same income twice once in assessment year 2016-17 and then for assessment year 2018-19.
14. Having realized such fact, the petitioner tried to invoke all possible remedies available to it, firstly by filing a rectification application under Section 154 of the Act of 1961, which to the petitioner’s dismay was rejected by the Assessing Officer on rather flimsy ground that he cannot reduce the gross total income. Without commenting or pronouncing upon such view of the AO, we rest the issue here itself, as the petitioner did not challenge such order and rather took up the matter before the CIT(IT) under Section 264 of the Act of 1961 and both the revision applications were rejected.
15. The petitioner has impugned the order dated 19.12.2025 passed by the CIT(IT) whereby his application under Section 119(2)(b) of the Act of 1961 has been rejected. A perusal of the impugned order reveals that the reason which has prevailed in the mind of the CIT(IT) is, that there is no special circumstance warranting exercise of his discretionary power under Section 119(2)(b) of the Act of 1961.
16. According to us, the CIT(IT) has seriously erred in coming to such conclusion. Special circumstances cannot be confined in a predefined formula or limited expression- they have to be inferred and understood from the contextual facts and surrounding circumstances. According to us, this was perhaps one of the better cases for exercising discretionary power under Section 119(2)(b) of the Act of 1961.
17. Because, the petitioner had admittedly paid tax on the very same income for two assessment years in 2016-17 and 2018-19, whereas tax is required to be paid only once qua one income. Even the Government can charge tax only once in one assessment year on a particular income and not twice.
18. Refusal to grant indulgence to the petitioner has amounted to unjust enrichment on the part of the Union of India. As a consequence whereof, if the petitioner’s assertions are correct, then the Union of India has subjected the petitioner to pay tax on two occasions, on the amount of Rs.7,58,90,455/-, firstly in assessment year 2016-17 and second time in assessment year 2018-19.
19. It is also not in dispute that the petitioner had filed three rectification applications under Section 154 of the Act of 1961 on 04.03.2019, 07.06.2019 and 31.07.2019 – immediately within a year of the end of assessment year 2017-18, which shows that the petitioner-assessee had acted with 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 and the redressal of petitioner’s grievance has taken a period of about 6 years.
20. If is preposterous to say that the petitioner has not been able to show hardship caused to it. Paying tax twice over the same income by itself is a hardship.
21. The petition is, therefore, allowed. The impugned order dated 09.12.2025 passed by the Commissioner of Income Tax (International Taxation-3, Delhi) is hereby quashed and set aside. The petitioner’s application under Section 119(2)(b) dated 31.07.2024 is hereby allowed.
22. The petitioner is allowed to file online/offline revised return of income for assessment year 2016-17 on or before 31.10.2026.
23. On revised return of income being filed, the Assessing Officer shall consider the same in accordance with law and after verifying the facts, pass appropriate order within a period of 3 months from the date of filing of revised return of income.
24. Pending application stands disposed of.
