Case Law

Delhi HC: Same Income, Taxed Twice, Six Years Apart — the Court Fixed It

Published 15 Sept 2026· By Finoscape Editorial Team· 5 min read

Every practitioner tells clients to rely on Form 26AS. What happens when Form 26AS itself changes retroactively — and the taxpayer, trusting the earlier version, has already paid tax on that income once?

That is exactly what happened to Sojitz Asia Pte. Ltd. The company received interest income of ₹7,58,90,455, which first appeared in its Form 26AS for Assessment Year 2016-17 — so it paid tax on it that year, as the record then showed. Some time later, the deductor revised Form 26AS, shifting the same income into Assessment Year 2018-19. Unaware that the deductor had made this change, Sojitz Asia — going by what its own Form 26AS now showed — offered the identical income to tax again, this time for AY 2018-19. The result: the same ₹7.58 crore taxed twice, six assessment years apart in effect, through no error of the taxpayer’s own making.

Sidebar: the company didn’t stay quiet about it. Three separate rectification applications under Section 154 were filed back in 2019, once the double taxation came to light — years before this matter reached the High Court. The eventual Section 119(2)(b) application, seeking permission to file a revised return for AY 2016-17 excluding the already-taxed income, was really the fourth attempt to get this fixed.

The Income Tax Department’s rejection of that Section 119(2)(b) application is what brought the matter to the Delhi High Court, in Sojitz Asia Pte. Ltd. v. Commissioner of Income Tax (International Tax), New Delhi (W.P.(C) 7495/2026), decided by a Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta on or about 9–10 September 2026 — coincidentally, the same Bench that quashed a Section 148A(d) reassessment order in J J Foods days earlier.

The Court’s reasoning centred on two points. First, that “special circumstances” justifying condonation of delay under Section 119(2)(b) “cannot be confined in a predefined formula” — they have to be assessed against what actually happened on the facts, and a taxpayer discovering, years later, that it had unknowingly paid tax twice on the same income is squarely the kind of hardship the provision exists to address. Second, and more pointedly: “even the Government can charge tax only once in one assessment year.” Denying the taxpayer relief here, the Court held, would leave the State having collected tax on the same income twice — an outcome it characterised as unjust enrichment. Finding that the company had acted with “utmost promptitude” once it discovered the error, the Court quashed the rejection and directed that the revised return for AY 2016-17 be permitted, with the Assessing Officer to decide the matter within three months.

Why It Matters

Form 26AS (and now AIS) is the backbone of how most taxpayers and practitioners reconcile what’s been taxed. This ruling is a reminder that the backbone itself can move — a deductor revising a TDS return years after the fact can silently shift income between assessment years — and when it does, the taxpayer who relied on the record in good faith should not be the one left absorbing a double tax bill because a statutory limitation period has technically lapsed. The Court’s “government can charge tax only once” line is a clean, quotable statement of a principle practitioners can now cite directly.

Key Takeaways

Delhi HC allowed a belated revised return under Section 119(2)(b) after finding that a taxpayer had, through the deductor’s later revision of Form 26AS, ended up paying tax twice on the same ₹7.58 crore of interest income across two assessment years.
The Court held that “special circumstances” for condonation cannot be reduced to a fixed formula, and that denying relief here would amount to unjust enrichment of the State, since the government can only lawfully charge tax once on the same income.
The taxpayer’s diligence — three Section 154 rectification applications filed promptly on discovering the error, well before the eventual writ petition — was a material factor the Court credited.
The ruling is specific to a genuine, deductor-driven double-taxation fact pattern; it is not a general licence for belated revised returns on other grounds.

Practical Implications

Any client relying on Form 26AS/AIS to determine which assessment year income belongs in should keep dated snapshots of that data, particularly for income streams (interest, professional fees, contractual payments) where the deductor could plausibly revise a TDS return in a later year. Where a deductor’s later correction creates or risks creating double taxation, this ruling gives practitioners a clear, recent authority for a Section 119(2)(b) application — provided the taxpayer acts promptly once the discrepancy is discovered, since the Court’s finding of “utmost promptitude” was central to the outcome.

Action Checklist

For any client with income spread across multiple TDS deductors, periodically re-check current Form 26AS/AIS data against what was actually offered to tax in each assessment year, since a deductor’s belated correction will not automatically flag itself to the taxpayer.
Where a double-taxation discrepancy is found, file Section 154 rectification promptly and keep dated records of each attempt — this diligence record is what carried real weight in this ruling.
If rectification under Section 154 is refused or does not resolve the issue, consider a Section 119(2)(b) condonation application for a belated revised return, citing this ruling’s “government can charge tax only once” reasoning.
Note the compliance timeline in this specific case: the Court directed the revised return for AY 2016-17 to be filed by 31 October 2026, with the Assessing Officer to decide within three months — a useful template for how such matters are now being resolved.

Relevant Sections / Rules / Notifications

Section 119(2)(b) of the Income-tax Act, 1961 (Board’s power to condone delay in specific cases).
Section 154 of the Income-tax Act, 1961 (rectification of mistake apparent from the record).
Section 264 of the Income-tax Act, 1961 (revision by the Commissioner).

FAQs

Q: Does this ruling mean any belated revised return will now be allowed?
A: No — the Court’s reasoning turns specifically on genuine, deductor-driven double taxation of identical income, and on the taxpayer’s documented promptness in pursuing correction from 2019 onward. It is not authority for condoning delay on unrelated or less diligently pursued grounds.

Q: What happens next in this specific matter?
A: The Assessing Officer has been directed to consider the AY 2016-17 revised return, to be filed by 31 October 2026, and decide within three months.

Internal Links

Today’s Intelligence — 15 September 2026 · Income Tax hub

Finoscape’s 14 September 2026 coverage of J J Foods (the same Delhi HC Bench’s Section 148A(d) ruling the same week) will be cross-linked here.

Prepared by Finoscape Editorial Team — hello@finoscape.com. This article is for general informational purposes and is based on reporting from LiveLawBiz and Taxscan of the Delhi High Court’s order in W.P.(C) 7495/2026. Reporting on the exact order date differs marginally between sources (9 September per Taxscan, 10 September per LiveLawBiz); this is disclosed rather than resolved, since the full order text was not independently retrieved from the Delhi High Court’s own portal in this cycle. It does not constitute legal or tax advice. Readers relying on this development for a specific client matter should verify the complete order before acting. Professional advice should be sought for any specific situation.