Gujarat High Court

Navinbhai Bhagubhai Patel vs Union Of India on 7 October, 2025

Author: Bhargav D. Karia

Bench: Bhargav D. Karia

                                                                                                                NEUTRAL CITATION




                           C/SCA/10486/2025                                    JUDGMENT DATED: 07/10/2025

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                                    IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

                                     R/SPECIAL CIVIL APPLICATION NO. 10486 of 2025
                                                         With
                                     R/SPECIAL CIVIL APPLICATION NO. 10495 of 2025
                                                         With
                                     R/SPECIAL CIVIL APPLICATION NO. 10532 of 2025
                                                         With
                                     R/SPECIAL CIVIL APPLICATION NO. 10796 of 2025
                                                         With
                                     R/SPECIAL CIVIL APPLICATION NO. 10910 of 2025

                      FOR APPROVAL AND SIGNATURE:


                      HONOURABLE MR. JUSTICE BHARGAV D. KARIA

                      and
                      HONOURABLE MR. JUSTICE PRANAV TRIVEDI
                      ==========================================================

                                   Approved for Reporting                     Yes            No
                                                                                         ✔
                      ==========================================================
                                                     NAVINBHAI BHAGUBHAI PATEL
                                                                Versus
                                                        UNION OF INDIA & ANR.
                      ==========================================================
                      Appearance:
                      MR. TUSHAR HEMANI, SR. ADVOCATE FOR MR NAITIK N SHAH(11495)
                      for the Petitioner(s) No. 1
                      KARAN G SANGHANI(7945) for the Respondent(s) No. 2
                      MS VYOMA K JHAVERI(6386) for the Respondent(s) No. 1
                      NOTICE SERVED BY DS for the Respondent(s) No. 1
                      ==========================================================

                         CORAM:HONOURABLE MR. JUSTICE BHARGAV D. KARIA
                               and
                               HONOURABLE MR. JUSTICE PRANAV TRIVEDI

                                                          Date : 07/10/2025

                                            ORAL JUDGMENT

(PER : HONOURABLE MR. JUSTICE PRANAV TRIVEDI)

1. Heard learned Senior Counsel Mr. Tushar

Hemani for learned advocate Mr. Naitik Shah

for the petitioner, learned advocate Ms. Vyoma

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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

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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

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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 194LA 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

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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.

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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 petitioner

that he duly submitted a reply along with

requisite documents on 8.7.2024. However,

without providing any opportunity of being

heard, the respondent passed impugned order

under Section 119(2)(b) of the Act on

30.7.2024 rejecting the request of the

petitioner to condone the delay in filing the

Income Tax Return for A.Y. 2022-23.

5.4 It was the case of the petitioner that the

respondent has examined the matter on merits

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and ignored the fact that the petitioner was

prevented by genuine hardship. It was duly

explained in the application for condonation

of delay. Despite such fact, the respondent

authorities asked for further facts with

regard to genuineness of the transaction of

the receipt of the compensation by the

petitioner. On such facts, the order passed by

the respondent under Section 119(2)(b) of the

Act is impugned in the present petition.

6. Learned Senior Counsel Mr. Tushar Hemani

submitted that the the Respondent No.2 failed

to consider the facts of the case that the

petitioner filed his return of income for the

first time for the Assessment year 2022-23

claiming that the compensation received

against the land acquisition is in capital

receipt in nature and claiming of refund for

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TDS deducted by the Arcelor Mittal Nippon

Steel India Limited U/s 194LA of the Act for

Rs. 6,67,667/- and prior to filing this return

the Petitioner did not file any return for any

assessment year.

6.1 Mr. Hemani further submitted that the

rejection Order issued by Respondent No.2

contravenes the principles of natural justice,

as it was passed without affording the

petitioner an opportunity to be heard prior to

the issuance of said adverse order. The

Provisions of the section 119(2)(b) states

that,

"The board may, if it consider 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 income tax authority, not being a commissioner of (appeals) to admit an application or claim for any exemption, deduction, refund or any other

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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."

Hence, the section gives the power to

income tax authority to admit any application

or claim for any exemption, deduction, refund,

or any other relief under the Act after expiry

of period specified and deal with the same on

merits. However, the petitioner has not been

provided any opportunity of being heard to

substantiate its reason for delay and justify

his genuine hardship, hence, the order passed

U/s 119(2)(b) of the Act is liable to be

quashed.

6.2 Learned Senior Counsel further submitted

that the respondent No.2 failed to consider

the facts and genuine hardship of petitioner

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that the petitioner was not assessed to tax

upto Assessment Year 2022-23 and for the

relevant year after deduction of TDS, he was

under bona fide belief that the return of

income was not required to be filed, as the

entire income which has been received is

considered to be capital receipt and no income

tax was chargeable. After realizing mistake,

the Petitioner filed his return voluntarily

claiming refund of TDS on 29/02/2024, prior to

the issuance of any notices under section

142/148 of the Act. Therefore, the order

passed by the Respondent No. 2 deserves to be

quashed and set aside.

7. Per contra, learned Senior Standing

Counsel Mr. Karan Sanghani relying on the

affidavit-in-reply filed by the respondent

submitted that the powers under Section 119(2)

(b) of the Act has been exercised diligently

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and judiciously after considering the material

available on record. There is no flaw in the

decision making process as well as no

violation of the principles of natural justice

and, therefore, the petition is misconceived

and is required to be dismissed. It was

further submitted that provisions of Section

119(2)(b) of the Act clearly mandates that

grounds for condonation of delay demonstrate

genuine hardship. The petitioner's claim of

not filing a return due to perceived non-

taxable income does not align with the

established criteria for "genuine hardship" as

envisioned by the legislative intent. The

petitioner was afforded ample opportunity to

present his case through communication dated

18.6.2024. The communication explicitly

requested the submission of necessary details,

documents and supporting evidence in support

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of his claim of genuine hardship and rationale

for not filing the return, computation of

total income and relevant documents justifying

his eligibility . As the petitioner during the

Section 119(2)(b) proceedings, failed to

furnish any cogent reason establishing genuine

hardship, the authority correctly rejected the

application. On the basis of such submissions,

Mr. Sanghani has requested to dismiss the

present writ petition.

8. Having heard learned advocates for the

respective parties and having perused the

material on record, it is not in dispute that

the petitioner was not having any taxable

income till A.Y. 2022-23. Subsequent to the

land acquisition award, the petitioner was not

aware about the Tax Deduction at Source, only

being employed in the very same year and on

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acquiring Permanent Account Number, the

petitioner came to be aware about tax deducted

at source. It is also not in dispute that the

petitioner was not heard and the respondent

had gone into merits of the genuineness of the

transaction and the quantum of award. The

issue of genuine hardship has come up for

consideration in numerous judgments before the

Hon'ble Apex Court and before this Court. The

term 'genuine' means not fake or counterfeit,

real, not pretending (not bogus or merely a

ruse).However, 'genuine hardship' means

genuine difficulty. In the instant case, the

respondent was required to consider the facts

of the case by condoning the delay and

allowing the petitioner to file Income-tax

return for the A.Y 2022-23. The provisions of

Section 119(2)(b) of the Act are meant for

redressal of the grievance and hardships

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caused to the petitioner as held by the

Hon'ble Madras High Court in case of R.

Seshammal (Supra) as under:

"This is hardly the manner in which the State

is expected to deal with the citizens, who

under anxiety to comply with all the

requirements of the Act pay monies as advance

tax to the State, even though the monies were

not actually required to be paid by them and

thereafter seek refund of the monies so paid

by mistake after the proceedings under the

Act are dropped by the authorities concerned.

The State is not entitled to plead the

hypertechnical plea of limitation in such a

situation to avoid return of the amounts.

Section 119 of the Act vests ample power in

the Board to render justice in such a

situation. The Board has acted arbitrarily in

rejecting the petitioner's request for

refund."