The court held that genuine hardship must be considered when evaluating applications for delay condonation under Section 119(2)(b) of the Income Tax Act.

JUDGMENT :

PRANAV TRIVEDI, J.

1. Heard learned Senior Counsel Mr. Tushar Hemani for learned advocate Mr. Naitik Shah for the petitioner, learned advocate Ms. Vyoma Jhaveri for the respondent No.1 and learned Senior Standing Counsel Mr.Karan Sanghani for the respondent No.2.

2. Rule, returnable forthwith. Learned advocate Ms. Vyoma Jhaveri waives service of notice of rule for and on behalf of respondent No.1 and learned Senior Standing Counsel Mr.Karan Sanghani waives service of notice of rule for and on behalf of the respondent No.2.

3. Considering the controversy involved which is in narrow compass, the matters are heard finally with the consent of the learned advocates of the respective parties. As all the matters have common issue, SCA No. 10486 of 2025 is being considered as lead matter for recording the facts.

4. By way of this petition, the petitioner has challenged the order dated 30.7.2024 passed by the Principal Commissioner of Income Tax, Surat-1 (hereinafter referred to as ‘the respondent’) while exercising jurisdiction under Section 119(2)(b) of the Income Tax Act, 1961 (for short ‘the Act’) rejecting the application dated 29.2.2024 filed by the petitioner to condone the delay and for permitting to file the return of income for the Assessment Year 2022-23.

5. The brief facts of the case are that the petitioner is an individual and had no taxable business income till the year 2022-23. Therefore, he was not required to file Income Tax Return till A.Y. 2022-23, as per the provision of Section 139(2) of the Act.

5.1 It is the case of the petitioner that his land bearing Survey No. 20/1 situated at Hazira Village, Surat was acquired under the provision of Land Acquisition Act, 1894. The Land Acquisition Officer had issued a regular award on 21.1.2009. The petitioner had not accepted the said award and initiated legal proceedings before this Court seeking additional compensation. Consequently, a settlement agreement was executed between the petitioner and acquiring bodies on 16.2.2022 resulting the petitioner receiving a compensation to the tune of Rs.62,66,967/-. On account of the compensation amount, the acquiring company Ancelor Mittal Nippon Steel India Limited also deducted tax at source to the tune of Rs.6,66,667/- under the provisions of Section 194 LA of the Act. This was duly reflected in Form 26AS on 5.6.2022. The acquiring company, however, failed to give Tax Deduction at Source (TDS) Certificate in Form 16A to the petitioner and never informed the petitioner about the deduction of tax at source.

5.2 It is the case of the petitioner that the petitioner started working at AMNS SHARED SERVICES LIMITED in the Financial Year 2023-24 and because of his new job, he required service of Chartered Accountant to file return of income. On 26.2.2024, the Chartered Accountant of the petitioner registered the petitioner’s Permanent Account Number (PAN) for the first time on Income Tax Website. It was at this stage the petitioner found out that Tax Deduction at Source was showing up in their tax statement (Form 26AS). In view of this juxtaposition, the petitioner requested the relevant tax authority seeking permission to file his Income Tax return with delay condonation application invoking Section 119(2)(b) of the Act.

5.3 Consequent to the application preferred by the petitioner, the respondent issued a letter to the petitioner on 14.6.2024 requesting documentation and clarification concerning the filing of the Income Tax Return under Section 119(2)(b) of the Act for the A.Y 2022-23. Pursuant to the intimation by the respondent, the petitioner requested for adjournment on 14.6.2024. It is the case of the petit