Delhi High Court Quashes Time-Barred Rejection Under Section 119(2)(b), Permits Belated Revised Return to Prevent Double Taxation
The fundamental principle of taxation jurisprudence dictates that the sovereign cannot tax the same income twice. When an assessee inadvertently subjects identical earnings to taxation in two distinct assessment years due to external anomalies, the revenue authorities are expected to adopt a justice-oriented approach rather than hiding behind procedural rigidities. This core philosophy was recently upheld by the Delhi High Court in the landmark ruling of Sojitz Asia Pte. Ltd Vs CIT.
In an order dated 07/09/2026, the Hon'ble High Court delivered a decisive verdict against the unjust enrichment of the state. The Court dismantled the revenue's technical objections regarding statutory limitations, ultimately permitting the assessee to file a belated revised return under Section 119(2)(b) of the Income Tax Act 1961 to rectify a six-year-old duplication error.
The Genesis of the Dispute: A Form 26AS Anomaly
The controversy originated from a discrepancy in the reporting of tax deducted at source by a third-party deductor. The assessee, Sojitz Asia Pte. Ltd., had earned an interest income amounting to exactly Rs. 7,58,90,455/-.
During the financial period corresponding to AY 2016-17, this specific interest income was actively reflected in the assessee's Form 26AS. Relying on this official statutory statement, the assessee dutifully incorporated the amount into its tax return for AY 2016-17 and discharged the associated tax liabilities.
However, a subsequent unilateral action by the deductor triggered a cascading compliance nightmare. The deductor revised the original withholding tax statement, effectively shifting the reporting of the Rs. 7,58,90,455/- interest income from AY 2016-17 to AY 2018-19. Crucially, this modification was executed without adequately alerting the assessee.
When the time arrived to file the return for AY 2018-19, the assessee observed the income newly appearing in the updated Form 26AS for that specific year. Operating under a bona fide, albeit mistaken, belief, the assessee offered the exact same amount of Rs. 7,58,90,455/- to tax once again. It was only later that the assessee recognized the severe financial blunder: it had paid taxes twice on a single stream of income.
The Procedural Labyrinth: A Six-Year Struggle for Redressal
Upon discovering the duplication, the assessee embarked on a prolonged legal and procedural battle to reclaim the excess taxes paid, utilizing multiple statutory avenues under the Income Tax Act 1961.
Initial Attempts via Section 154 Rectification
The assessee's first line of action was to seek a rectification of mistakes apparent from the record. To this end, the assessee submitted three separate applications under Section 154 on the following dates:
- 04.03.2019
- 07.06.2019
- 31.07.2019