HAQ STEELS PVT LTD vs PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) AHMEDABAD

C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 7869 of 2025
With
CIVIL APPLICATION (FOR AMENDMENT) NO. 1 of 2026
In R/SPECIAL CIVIL APPLICATION NO. 7869 of 2025

FOR APPROVAL AND SIGNATURE:


HONOURABLE MR. JUSTICE A.S. SUPEHIA

and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI
=============================================
Approved for Reporting Yes No
✔
=============================================
HAQ STEELS PVT LTD
Versus
PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) AHMEDABAD
=============================================
Appearance:
JAIMIN A GANDHI(8065) for the Petitioner(s) No. 1
MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1
=============================================
CORAM: HONOURABLE MR. JUSTICE A.S. SUPEHIA
and
HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI

Date : 30/06/2026

ORAL JUDGMENT
(PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA)
1. Learned advocates appearing for the respective parties
are extensively heard by us and the matter is taken up for final
hearing and final disposal.
2. In the present writ petition, the petitioner herein has
prayed for quashing and setting aside the order dated
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23.01.2025 passed by the respondent– Principal Commissioner
of Income Tax (Central), Ahmedabad, rejecting the application
filed by the petitioner seeking condonation of delay in filing
Form 10DA under Section 119(2)(b) of the Income Tax Act,
1961 (for short ‘the Act’).
3. The petitioner filed return of income for the Assessment
Year (for short ‘A.Y.’) 2019-20 on 02.10.2019, for A.Y. 2020-21
on 02.12.2020 and for A.Y.2021-22 on 22.12.2021. It is the
case of the petitioner that the petitioner is entitled to claim
deduction under Section 80JJAA of the Act of Rs.22,93,740/- for
A.Y.2019-20, Rs.41,13,560/- for A.Y.2020-21 and
Rs.23,51,080/- for A.Y.2021-22.
3.1 The petitioner realized the mistake in not claiming the
deduction as it was not advised by the Chartered Accountant
M/s. KPSJ & Associates LLP under Section 80JJAA of the Act. The
petitioner came to know about the fault when he
approached the Chartered Accountant, Nimish Vayawala, in
October, 2022 for power plant related taxation issues and on
his examination of the return of incomes, he drew attention of
the petitioner that the petitioner-Company is entitled to claim
deduction under Section 80JJAA of the Act, and hence he
advised the petitioner to file an application under Section
119(2)(b) of the Act seeking condonation of delay in making
the claim and filing the report in Form No.10DA by filing a
revised return.
3.2 Accordingly, the petitioner filed an application on
21.11.2022 under Section 119(2)(b) of the Act seeking
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condonation of delay of 721 days, 600 days and 279 days in
claiming deductions for respective years as mentioned herein
above. The said application has been rejected by the
respondent by order dated 23.01.2025, which is challenged in
this writ petition.
4. Learned advocate, Mr. Jaimin A. Gandhi appearing for the
petitioner while pointing out to the contents of the impugned
order, has submitted that the respondent while passing the
impugned order has not appreciated the reasons assigned by
the petitioner in the application seeking condonation of delay,
and more particularly, the respondent has very vaguely and
cursorily rejected the application without examining the aspect
of genuine hardship, which would be caused to the petitioner
in case the deduction under Section 80JJAA of the Act is not
allowed. In support of his submission, he has placed reliance
on the judgment of this Court in the case of Surendranagar
District Co-operative Bank Ltd. v. Deputy Commissioner of
Income Tax , [2019] 108 taxmann.com 608(Guj.) . In this regard,
further reliance is also placed on the judgment of the Bombay
High Court in the case of Bhatewara Associates Manik v. Union
of India , [2023] 147 taxmann.com 297 (Bombay) . While
placing reliance on the judgment of the Supreme Court in the
case of Commissioner of Income Tax v. Sun Engineering
Works(P.) Ltd. , [1992] 64 Taxman 442 (SC) , it is contended
that the petitioner has no other remedy but, to file an
application under Section 119(2)(b) of the Act seeking
permission to file a revised return for claiming deduction under
Section 80JJAA of the Act.
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4.1 He has also pointed out the certificate dated 13.06.2023
issued by the Chartered Accountant clarifying that
inadvertently, the claim under Section 80JJAA of the Act has
not been filed/claimed in the return of income for the
assessment years as mentioned herein above. It is submitted
that after the filing of the present writ petition for the A.Y.
2019-20 and A.Y.2021-22, the assessment order under Section
147 of the Act is passed, which is further subject matter of
challenge before the Commissioner of Income Tax (Appeals)
(for short ‘the CIT’). It is submitted that in light of the judgment
of the Supreme Court in case of Sun Engineering Works (P.)
Ltd. (Supra), the petitioner has not challenged the decision of
the Assessing Officer in disallowing the deduction under
Section 80JJAA of the Act since it is not permissible for the
petitioner to claim the deduction in the reassessment
proceedings under Sections 147, 148 of the Act. It is thus,
urged that the impugned order may be quashed and set aside
and the respondent may be directed to decide the application
afresh.
5. Per contra, learned Senior Standing Counsel, Mr.Varun K.
Patel for the respondent while placing reliance on the
judgment of this Court in the case of Gaurangbhai Chimanbhai
Kapadiya v. Union of India , [2024] 161 taxmann.com 304
(Guj.) , has urged that looking to the huge delay and
unsatisfactory reasons assigned by the petitioner in his
application, the respondent has precisely rejected the same. It
is also submitted that the reasons assigned by the respondent
in the impugned order are legal and valid and hence, it is
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urged that the same may not be quashed and set aside. It is
further contended that since for the A.Y.2019-20 and 2020-21,
the assessment orders are already passed and the appeals
filed by the petitioner are already pending, there would be
conflict of opinion on the same issue and hence, as per the
decision of this Court, the order passed by the respondent
rejecting the application seeking condonation of delay in filing
Form 10DA under Section 119(2)(b) of the Act, may not be
disturbed.
6. We have heard the learned advocates appearing for the
respective parties at length. The established facts are as
under:
(a) The petitioner filed return of income for the A.Y.2019-20
on 02.10.2019, for A.Y. 2020-21 on 02.12.2020 and for
A.Y.2021-22 on 22.12.2021.
(b) It is the case of the petitioner that he is entitled to claim
deduction under Section 80JJAA of the Act of Rs.22,93,740/- for
A.Y.2019-20, Rs.41,13,560/- for A.Y.2020-21 and
Rs.23,51,080/- for A.Y.2021-22.
(c) The petitioner filed an application under Section 119(2)
(b) of the Act for the three assessment years on 21.11.2022
pointing out that the petitioner would be faced with the
genuine hardship if he is required to pay more taxes than what
he is not required to pay due to want of claim of deduction
under Section 80JJAA of the Act.
(d) The petitioner along with the application also produced
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the certificate issued by the Chartered Accountant dated
13.06.2023 certifying that due to inadvertence, the claim
under Section 80JJAA of the Act was not brought to the
attention of the company and hence, the deduction was not
claimed into the Income Tax Return (ITR) and hence, the
certificate in Form 10DA was not filed.
(e) The petitioner in the writ petition as well as in his
application has categorically stated that when he approached
another Chartered Accountant, and after reviewing the work of
the income tax of all the group of companies, he invited the
attention of the petitioner to the availability of the deduction
under Section 80JJAA of the Act, who advised the petitioner to
file an application under Section 119(2)(b) of the Act seeking
condonation of delay in making claim and filing the report by
allowing filing of revised return. The said application has been
rejected by the impugned order dated 23.01.2025.
(f) The respondent has assigned three reasons in rejecting
the application. First reason assigned in brief is that, the
deduction under Section 80JJAA of the Act is allowed on the
basis of the audit report in specialized Form 10DA, which is to
be filed before due date of filing the return and hence, the
delay cannot be condoned. Second reason assigned is that, the
petitioner did not provide any evidence of initiating any legal
action of filing complaint against the Auditor – M/s. KPSJ &
Associates LLP , who did not provide proper advice. The final
reason which has been assigned is relating to the aspect of
genuine hardship, which finds place in the provision of Section
119(2)(b) of the Act. It is stated by the respondent that the
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hardship cannot be considered in light of financial capacity and
liability of the assessee since the assessee is not an individual
but, is a body corporate having no financial hardship.
7. At this stage, we may incorporate the provision of Section
119(2)(b) of the Act, which reads as under:
"119(2)(b) the Board may, if it considers it desirable or expedient
so to do for avoiding genuine hardship in any case or class of cases,
by general or special order, authorise [any incometax authority, not
being a [a Joint Commissioner (Appeals)] to admit an application or
claim for any exemption, deduction, refund or any other relief under
this Act after the expiry of the period specified by or under this Act
for making such application or claim and deal with the same on
merits in accordance with law;"
7.1 The expression ‘genuine hardship’ in the provision of
Section 119(2)(b) of the Act is the soul of the provision. The
Central Board of Direct Taxes (for short ‘the Board’) is assigned
with ample powers, if it considers it desirable or expedient so
to do for avoiding genuine hardship in any case or classes of
cases as mentioned therein, to admit an application after the
expiry of period specified under the Act for making such
application or claim and deal with the same on merits in
accordance with law. The respondent while dealing the
expression ‘genuine hardship’, has assigned a very novel
reason that the assessee since is a body corporate and is
financial capable, will not face any genuine hardship, if
condonation is not allowed.
7.2 We do not subscribe to the reasons assigned by the
respondent. Merely, because the petitioner – assessee is a
body corporate, the application cannot be rejected by
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assigning such ground that it does not face any genuine
hardship due to its financial capacity. As mentioned herein
above, the claim of the petitioner seeking deduction under
Section 80JJAA of the Act, is substantial in nature. The
respondent has ventured into an area which is prohibited as
while examining the application under Section 119(2)(b) of the
Act, the respondent cannot examine the financial capacity of
the assessee and conclude that it will not face genuine
hardship in case its claim is disallowed.
8. The other reason assigned by the respondent is regarding
non-filing any complaint against the Auditor, who did not filling
the Form 10DA and the audit reports, is also not palatable. The
respondent has not doubted the certificate dated 13.06.2023
issued by the Auditor. Merely, because the petitioner has
chosen not to file any complaint against the Auditor, the same
will not dilute the contents of the certificate dated 13.06.2023
wherein, the Auditor has admitted that inadvertently, the claim
under Section 80JJAA of the Act for additional cost incurred was
not brought to the attention of the petitioner company and
hence, the deduction was not claimed in the Income Tax
Return (ITR) by filing Form 10DA. On this count also, the
impugned order become vulnerable. Thus, the reason assigned
of non-filing of the complaint against the auditor/C.A also goes
beyond the scope of Section 119(2)(b) of the Act.
9. It is not in dispute that the petitioner would get the tax
advantage/benefit by way of deduction under Section 80JJAA of
the Act. It is trite that there cannot be a straight jacket formula
to determine the genuine hardship of an assessee and it would
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depend upon the facts and circumstances of each case.
However, the same cannot absolve the respondent from
applying the mind by appreciating the claim of the petitioner
and the explanation tendered for delay while examining the
application filed under the provision of Section 119(2)(b) of the
Act.
10. The legislature has conferred the power on the Board to
condone the delay to enable the authorities to do substantial
justice to the parties by considering the reasons assigned in
the application on merits. The expression ‘genuine hardship’
has to be given considered meaning to help the assessee.
There may be some cases where the delay is required to be
condoned even if, it is inordinate, however, there is a
meritorious claim of an assessee which cannot be thrown out
at the threshold causing genuine hardship and injustice to an
assessee. Ultimately, the provision of Section 119(2)(b) of the
Act is meant for doing a substantial justice and the same has
to be kept in mind while dealing with the applications. At the
same time, the authority has also to be alive of the
unexplained and deliberate delay in filing claim/application
along with the facet of genuine hardship. Overall, the approach
of the authority should be justice oriented to do the substantial
justice in case the authority finds that the claim made under
the application under Section 119(2)(b) of the Act is rejected, it
would cause the genuine hardship to the assessee.
10.1 In the present case, in fact, the reasons assigned are
perfunctory and fall out of line of the settled legal precedent.
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11. Learned Senior Standing Counsel, Mr.Varun K. Patel has
placed reliance on the judgment in the case of Gaurangbhai
Chimanbhai Kapadiya (Supra) . A perusal of the decision of
the Coordinate Bench will reveal that the same will not apply
to the facts of the present case. On the contrary, in paragraph
8 after examining the provision of Section 119(2)(b) of the Act,
it is held that the provision makes it clear that if the assessee
had made a claim belatedly then delay in making such claim
can be condoned by the respondent No.1 for purpose of
permitting the petitioner to claim loss, so as to carry forward in
the next year for set off. The Coordinate Bench has ultimately
rejected the writ petition by observing that the petitioner was
habitual in nature in filing belatedly returns. Thus, the decision
will not come to the rescue of the respondent in the present
case.
12. It is also noted by us that subsequently during the
pendency of the petition, the respondent has passed the
reassessment orders under the provision of Section 147 of the
Act for A.Y.2019-20 and 2021-22. In the reassessment orders,
it is true that the petitioner has claimed the deductions under
Section 80JJAA of the Act, which has been disallowed in the
reassessment proceedings against which, the petitioner has
filed an appeal before the Commissioner of Income Tax
(Appeals). However, the petitioner has not challenged the
denial of the deduction and precisely so, since the petitioner in
the reassessment proceedings cannot claim deduction under
the provision of Section 147 of the Act, as he failed to do so in
filing the original returns. The law in this regard is well settled
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by the judgment of the Supreme Court in the case of Sun
Engineering Works (P.) Ltd. (Supra) .
13. Hence, on an overall appreciation of the contents of the
impugned order dated 23.01.2025, we are inclined to set aside
the same. Hence, the same is quashed. The matter is
remanded back to the respondent authority to decide the
application filed by the petitioner under Section 119(2)(b) of
the Act, on merits. The same shall be done within a period of
twelve (12) weeks from the date of receipt of writ of this order.
We clarify that we have not expressed any opinion on the
entitlement of the claim of deduction under Section 80JJAA of
the Act.
14. The writ petition is allowed, accordingly. As a sequel,
the connected Civil Application No.1 of 2026 producing
assessment order would stands disposed of .
(A. S. SUPEHIA, J)
(VAIBHAVI D. NANAVATI,J)
NEHA/17
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