Double taxation of the same income constitutes genuine hardship warranting relief under Section 119(2)(b).

The petitioner earned interest income of ₹7,58,90,455, which was initially reflected in Form 26AS for AY 2016–17 and was duly offered to tax in that year.

The deductor subsequently revised Form 26AS and reflected the same income in AY 2018–19. Relying on the revised Form 26AS, the petitioner again offered the identical amount to tax for AY 2018–19, resulting in taxation of the same income twice.

Upon discovering the error, the petitioner filed rectification applications under Section 154 of the Income-tax Act, 1961, on 4 March, 7 June and 31 July 2019. The applications remained pending for approximately three years, and the application dated 31 July 2019 was rejected on 26 December 2022 on the ground that the Assessing Officer lacked power to reduce the returned gross total income.

The petitioner’s revision applications under Section 264 were also rejected, including on limitation-related grounds, after which it invoked Section 119(2)(b) and sought permission to file a revised return for AY 2016–17 excluding the amount already taxed in AY 2018–19.

The Commissioner of Income Tax (International Taxation) rejected the Section 119(2)(b) application on 9 December 2025, holding that the delay was unexplained, that no extraordinary or special circumstances had been shown, and that the case was not covered by CBDT Circular No. 9/2015 dated 9 June 2015.

Whether the Commissioner erred in refusing to exercise the discretionary power under Section 119(2)(b) of the Income-tax Act, 1961, on the ground that the petitioner had not demonstrated special circumstances or genuine hardship

Whether the petitioner should be permitted to file a revised return for AY 2016–17 to avoid taxation of the same income in both AY 2016–17 and AY 2018–19

Whether the petitioner’s delay in seeking relief disentitled it from invoking Section 119(2)(b), notwithstanding its prior pursuit of rectification and revision remedies

The Court applied Section 119(2)(b) of the Income-tax Act, 1961, which empowers the competent income-tax authority to admit an application or claim for exemption, deduction, refund or other relief after expiry of the prescribed period where genuine hardship would otherwise be caused; the existence of “special circumstances” must be assessed contextually and cannot be confined to a rigid or predefined formula.

The Court also considered the petitioner’s earlier remedies under Sections 154 and 264, as well as CBDT Circular No. 9/2015 dated 9 June 2015, governing condonation of delay in specified income-tax claims.

The Court further applied the principle that the same income cannot ordinarily be subjected to tax twice and that retention of tax paid twice on the same income may result in unjust enrichment by the State.

The Court found that the duplicate taxation arose from the deductor’s revision of Form 26AS, which caused the petitioner, acting bona fide, to offer the same interest income once in AY 2016–17 and again in AY 2018–19.

The petitioner had not remained inactive: it filed three rectification applications within approximately a year and thereafter pursued revision proceedings, demonstrating prompt and continuous efforts to correct the mistake.

Against this factual background, the Commissioner’s insistence on a narrowly defined “special circumstance” and unexplained delay was held to be erroneous.

The Court treated payment of tax twice on the same income as itself constituting genuine hardship and held that the circumstances presented a strong case for exercise of discretion under Section 119(2)(b).

The administrative delay and the petitioner’s pursuit of remedies could not fairly be used to deny relief.

The application dated 31 July 2024 was allowed, and the petitioner was permitted to file an online or offline revised return for AY 2016–17 on or before 31 October 2026.

Upon filing the revised return, the Assessing Officer was directed to verify the facts, consider the return in accordance with law, and pass an appropriate order within three months of its filing.