Condonation of Delay for Filing Return of Income u/s 119(2)(b)

Delhi High Court | Judgment dated 23 December 2025
W.P.(C) 19589/2025 & CM Appl. 81894/2025
Manjit Singh Dhaliwal versus Commissioner of Income Tax (International Taxation)-01, New Delhi

The Delhi High Court examined the scope and limits of the power of condonation of delay under section 119(2)(b) of the Income-tax Act, 1961, in the context of a non-resident assessee seeking permission to file a belated return of income for Assessment Year 2020–21. The petitioner, a Canadian citizen residing abroad, sought judicial intervention against the rejection of his condonation application by the Commissioner of Income Tax (International Taxation), contending that the delay in filing the return arose due to genuine hardship.

The Court reiterated that section 119(2)(b) is an exceptional provision meant to alleviate genuine hardship and cannot be invoked as a matter of routine or as a substitute for statutory compliance. The discretion vested in the tax authorities must be exercised judiciously, but equally, the assessee bears the burden of demonstrating compelling and reasonable cause for the delay.

Core Issue: Whether the rejection of the petitioner’s application for condonation of delay in filing the return of income for AY 2020–21 under section 119(2)(b) of the Income-tax Act, 1961 was legally sustainable, having regard to the requirement of establishing “genuine hardship” and “reasonable cause”.

Facts: The petitioner is a Canadian citizen and non-resident Indian for AY 2020-21. Prior to the relevant assessment year, he did not have taxable income in India exceeding the basic exemption limit. During FY 2019-20 relevant to AY 2020-21, he sold an immovable property in India for a consideration of approximately Rs. 2 crore, on which tax was deducted at source by the purchasers. He also earned nominal interest income from a bank account in India.

The petitioner did not file his return of income within the prescribed time and subsequently, in June 2025, filed an application under section 119(2)(b) seeking condonation of delay and permission to file the return. The reasons cited included lack of awareness of Indian tax laws, health issues, COVID-related travel restrictions, and ignorance of TDS deductions having been made. The Commissioner of Income Tax rejected the application, holding that no genuine hardship or reasonable cause was established.

Statutory Provision: Section 119(2)(b)

Section 119(2)(b) empowers the Central Board of Direct Taxes to authorise income-tax authorities to admit belated applications or claims for exemption, deduction, refund or other relief after expiry of the statutory time limit, if such admission is considered desirable or expedient to avoid “genuine hardship”.

The provision does not create a vested right in favour of the assessee. It confers a discretionary and equitable power, to be exercised only in cases where strict adherence to limitation would result in real and substantive hardship, and not where delay is attributable to negligence, inaction or ignorance of law.

Meaning of “Reasonable Cause” and “Genuine Hardship”

The High Court reiterated settled jurisprudence that “genuine hardship” must be construed liberally but not mechanically. Hardship contemplated under section 119(2)(b) is not every inconvenience or financial burden arising from non-compliance with statutory timelines. It must be a hardship that is genuine, bona fide and unavoidable despite due diligence.

“Reasonable cause” implies a cause which would prevent a person of ordinary prudence, acting reasonably and in good faith, from performing the statutory obligation within time. Ignorance of law, general unawareness, or mere inadvertence does not constitute reasonable cause. The assessee must explain the delay with cogent material and demonstrate that the failure was not deliberate or due to negligence.

Brief Arguments: The petitioner argued that being a senior citizen and non-resident, he lacked familiarity with Indian tax laws and was unaware of the obligation to file a return despite TDS having been deducted. It was contended that health issues, overseas residence and COVID-related restrictions constituted genuine hardship. Reliance was placed on the principle that condonation provisions should be interpreted liberally to advance substantial justice.

The Revenue contended that ignorance of law is no excuse, particularly when the petitioner had successfully executed a property sale through a Power of Attorney and could have similarly ensured tax compliance. It was argued that the return could have been filed electronically from abroad, and that the reasons cited were vague, unsupported by evidence, and insufficient to constitute genuine hardship.

Findings of the High Court

The High Court upheld the rejection of the condonation application. It held that ignorance of tax law or unawareness of TDS deduction cannot be accepted as a valid ground, applying the settled maxim ignorantia juris non excusat. The Court noted that the petitioner had failed to demonstrate any extraordinary or compelling circumstance which prevented him from filing the return within time.

The Court relied upon and reaffirmed earlier precedents, including Puneet Rastogi v. Principal Chief Commissioner of Income-tax, where it was held that ignorance of law does not constitute genuine hardship. Reference was also made to B.U. Bhandari Nandgude Patil Associates v. CBDT, emphasising that statutory time limits are integral to fiscal discipline and cannot be relaxed on mere asking. The Court further relied on Lava International Ltd. v. CBDT and Sanjay Khurana v. Income Tax Department, reiterating that condonation under section 119(2)(b) is reserved for extraordinary cases and not routine defaults.

The High Court found that the impugned order was reasoned, based on relevant material, and free from arbitrariness or violation of principles of natural justice. The authority had correctly applied the legal standard of genuine hardship and reasonable cause.

Decision: The Delhi High Court dismissed the writ petition and upheld the order rejecting the application for condonation of delay under section 119(2)(b) of the Income-tax Act, 1961. It was held that the petitioner had failed to establish genuine hardship or reasonable cause for the belated filing of the return of income for AY 2020–21, and therefore, no interference was warranted in exercise of writ jurisdiction.

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