Facts of the Case

The petitioner, Sanjay Khurana, filed a writ petition challenging an order dated 05.08.2025 passed by the Principal Commissioner of Income Tax rejecting his application under Section 119(2)(b) of the Income Tax Act, 1961. The application sought condonation of a delay of nine months in filing a revised return of income for Assessment Year 2021–22. The original return was filed on 10.02.2022 within time. The petitioner later sought to file a revised return on 22.12.2022 on the ground that business loss had been incorrectly shown as speculative loss in the original return, allegedly due to erroneous advice.

The Principal Commissioner rejected the application holding that neither sufficient cause nor genuine hardship was made out, and that the claim was an afterthought falling outside the scope of Section 119(2)(b) and CBDT Circular No. 11/2024 dated 01.10.2024.

Issues Involved

Whether a delay of nine months in filing a revised return can be condoned under Section 119(2)(b), whether incorrect classification of loss due to alleged wrong advice constitutes sufficient cause or genuine hardship, and whether rejection of condonation by the Principal Commissioner was legally sustainable.

Petitioner’s Arguments

The petitioner argued that the delay occurred due to errors in the original return and the need to seek fresh professional advice, compounded by the COVID-19 situation and the petitioner’s status as a non-resident Indian. It was contended that the revised return was filed to correctly reflect business loss instead of speculative loss and that rejection of condonation resulted in genuine hardship.

Respondent’s Arguments

The Revenue submitted that the petitioner had sufficient opportunity to file a revised return within the statutory time limit, as the original return itself was filed electronically. It was argued that ignorance of law or dependence on an advisor does not constitute sufficient cause or genuine hardship under Section 119(2)(b), particularly in light of CBDT Circular No. 11/2024.

Court Order / Findings

The Delhi High Court held that a delay of nine months in filing a revised return is substantial and cannot be condoned lightly. The Court observed that the petitioner had filed the original return in time using the e-filing portal, which was accessible globally, and therefore the plea of being a non-resident Indian was not convincing. The Court further noted that the petitioner was the President of a Trust running a hospital and could reasonably be expected to be aware of basic tax compliance requirements. The Court agreed with the findings of the Principal Commissioner that the claim did not disclose sufficient cause or genuine hardship and was an afterthought aimed at making a claim not otherwise available.

Important Clarification

The Court clarified that Section 119(2)(b) confers discretionary power to condone delay only in cases of genuine hardship caused by circumstances beyond the assessee’s control. Mere error in return filing, change of advice, or ignorance of law does not justify condonation, particularly when statutory timelines were available and not utilised.

Final Outcome

The writ petition was dismissed. The Delhi High Court upheld the order dated 05.08.2025 rejecting condonation of delay under Section 119(2)(b) for filing a revised return for Assessment Year 2021–22, holding that no sufficient cause or genuine hardship was made out.

 

Link to Download order- https://mytaxexpert.co.in/uploads/1769503084_SANJAYKHURANAVsINCOMETAXDEPARTMENTMINISTRYOFFINANCE.pdf

 

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