Sojitz Asia Pvt. Ltd. Vs CIT (International Tax) (Delhi High Court)
Same Income, Two Assessment Years & Double Tax—That Is Itself “Genuine Hardship” U/s 119(2)(b): Delhi HC
Summary: The Delhi High Court has held that where the same income was inadvertently offered to tax in two different assessment years due to revision of Form 26AS by the deductor, payment of tax twice on the same income itself constitutes genuine hardship warranting condonation u/s 119(2)(b). The Court observed that even the Government can tax a particular income only once in the appropriate assessment year. Retention of tax collected twice on the same income would amount to unjust enrichment by the Union of India.
Facts of the Case
The assessee, Sojitz Asia Pte. Ltd., earned interest income of ₹7,58,90,455. The amount was initially reflected by the deductor in Form 26AS pertaining to AY 2016-17. Acting upon the information appearing in Form 26AS, the assessee filed its return for AY 2016-17 & offered the interest income to tax.
Subsequently, the deductor revised the TDS particulars. The same interest income was removed from Form 26AS for AY 2016-17 & reflected in Form 26AS for AY 2018-19.
The assessee, while filing its return for AY 2018-19, once again offered the entire amount of ₹7.58 crore to tax. At that time, it failed to notice that the same income had already been offered & subjected to tax in AY 2016-17.
Thus, due to the deductor’s revision of Form 26AS & the assessee’s inadvertence, the same interest income suffered tax in two assessment years.
Assessee Knocked at Every Door
Upon discovering the mistake, the assessee filed three rectification applications u/s 154 on 04.03.2019, 07.06.2019 & 31.07.2019. However, these applications remained pending with the AO for nearly three years.
Ultimately, on 26.12.2022, the AO rejected the rectification application on the ground that he lacked the power to reduce the gross total income returned by the assessee.
Meanwhile, the assessee had also filed a revision application u/s 264. The CIT rejected it on 30.03.2021 as premature because the rectification application was then pending before the AO.
After rejection of the rectification application, the assessee once again approached the CIT u/s 264. This application was rejected on 28.03.2024 on the ground of limitation, with an observation that the assessee should seek condonation of delay for filing a revised return u/s 119(2)(b).
Following this direction, the assessee filed an application u/s 119(2)(b), seeking permission to file a revised return for AY 2016-17 by excluding the interest income already offered to tax in AY 2018-19.
CIT Refuses Condonation
The CIT rejected the application on 09.12.2025. According to him, the power to permit filing of a revised return beyond six years could be exercised only in extraordinary circumstances.
The CIT held that the assessee had failed to establish any special circumstances or genuine hardship. He also treated the delay of six years as unexplained & held that the claim was not covered by CBDT Circular No. 9/2015 dated 09.06.2015.
The assessee challenged this order before the Delhi High Court.
Revenue Blames the Assessee
The Revenue argued that though the assessee had filed one application after another, it had repeatedly invoked the wrong remedies. Therefore, if six years had elapsed, the assessee itself was responsible.
It was further contended that the assessee had not furnished adequate evidence to establish that the interest income did not pertain to AY 2016-17 or that any genuine hardship had been caused.
Special Circumstances Cannot Be Put in a Straitjacket
The High Court rejected the CIT’s narrow approach.
It held that special circumstances cannot be confined to a predefined formula or restricted expression. Their existence must be gathered from the contextual facts & surrounding circumstances of each case.
According to the Court, this was “perhaps one of the better cases” for exercising the discretionary power u/s 119(2)(b). The admitted position was that the very same interest income had been offered to tax in AYs 2016-17 & 2018-19 because of the deductor’s revision of Form 26AS.
The Government was entitled to collect tax on the income only once. Refusal to permit correction of an evident duplication would result in the Union of India retaining tax twice on the same income, thereby causing unjust enrichment.
Wrong Remedy Did Not Mean Abandonment of Rights
The Court also rejected the allegation that the assessee had slept over its rights.
The three rectification applications were filed in 2019, soon after the duplication came to light. This demonstrated that the assessee had acted with utmost promptitude.
The assessee had continuously pursued the available remedies. The prolonged delay occurred because its rectification applications remained unattended for three years & it was thereafter required to move between proceedings u/s 154, revision u/s 264 & condonation u/s 119(2)(b).
The Court strongly observed that it was due to the Department’s delay-dallying tactics or non-cooperative attitude that the assessee had been made to roam from pillar to post for approximately six years.
Delhi HC’s Decision
The High Court quashed the CIT’s order & allowed the assessee’s application u/s 119(2)(b).
The assessee was permitted to file an online or offline revised return for AY 2016-17 on or before 31.10.2026. Upon filing of the return, the AO was directed to verify the facts, consider the revised return in accordance with law & pass an appropriate order within three months.
Author’s Comments
This judgment gives practical meaning to the expression “genuine hardship”. Hardship does not require a dramatic or extraordinary event. Compelling an assessee to bear tax twice on the same income is by itself a manifest hardship.
Equally important is the Court’s recognition that continuous pursuit of an incorrect procedural remedy does not necessarily amount to negligence. Where the substantive claim is genuine, the tax has admittedly been paid twice & the assessee has acted promptly, procedural technicalities cannot become an excuse for the Revenue to retain money that is not lawfully due.
The principle is simple: the Revenue may collect every rupee legitimately payable—but the same income cannot be made to buy two tickets to the tax counter merely because Form 26AS changed platforms.
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 2016-17 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 2018-19.
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.
