The Delhi High Court has delivered an important ruling on double taxation of the same income, holding that an assessee cannot be compelled to bear tax twice on identical income merely because of an inadvertent reporting error. The Court observed that tax is required to be paid only once on one income and that retaining tax collected twice could result in “unjust enrichment” on the part of the Union of India.
The judgment was delivered by a Division Bench comprising Justice Dinesh Mehta and Justice Rajneesh Kumar Gupta in Sojitz Asia Pte. Ltd. v. The Commissioner of Income Tax (International Tax), New Delhi & Ors.
Background of the Case
The dispute concerned interest income amounting to approximately ₹7.58 crore, which was inadvertently offered to tax by the assessee in two different assessment years.
Initially, the deductor reported interest income of ₹7,58,90,455 in Form 26AS for Assessment Year (AY) 2016-17. Relying on the information available in Form 26AS, the assessee included the income in its return and paid the applicable tax.
Subsequently, the deductor revised its Form 26AS and reflected the same interest income in AY 2018-19. Since the assessee was unaware that the amount had already been offered to tax in AY 2016-17, it again included the same income in its return for AY 2018-19.
The result was that the same income was effectively subjected to tax twice.
Attempts to Correct the Double Taxation
After discovering the error, the assessee took steps to rectify its tax position. It filed multiple applications under Section 154 of the Income Tax Act, 1961, in March, June and July 2019.
However, the applications remained pending for a considerable period. Ultimately, the Assessing Officer rejected the final rectification application in December 2022, taking the view that he did not possess the power to reduce the returned gross total income in the manner sought by the assessee.
The assessee thereafter pursued remedies under Section 264 of the Income Tax Act. Those revision applications were also rejected, including on the ground of limitation.
Having exhausted these remedies, the assessee approached the tax authorities under Section 119(2)(b) of the Income Tax Act, seeking permission to file a revised return for AY 2016-17 so that the income which had already been taxed in AY 2018-19 could be excluded.
The application was rejected in December 2025. The authorities took the view that the assessee had not established sufficient “special circumstances” to justify the exercise of discretionary powers under Section 119(2)(b). The authorities also relied upon the delay of approximately six years.
Delhi High Court Rejects Technical Approach
The Delhi High Court disagreed with the approach adopted by the tax authorities.
The Court emphasised that the expression “special circumstances” cannot be confined to a predefined formula or limited expression. Each case must be examined on its particular facts and circumstances.
The Bench particularly noted the fundamental principle that tax is payable only once in respect of a particular income. According to the Court, even the Government cannot legitimately charge tax twice on the same income merely because the assessee made an inadvertent mistake.
The Court observed that refusing to correct such an error would effectively result in unjust enrichment by the Union of India.
Assessee Had Acted Promptly
An important factor considered by the Court was the conduct of the assessee after discovering the mistake.
The Court found that the assessee had acted with “utmost promptitude” once it became aware of the double taxation. It had approached the tax authorities through different statutory remedies instead of deliberately allowing the matter to remain unresolved.
The Bench also noted that the assessee had been compelled to “roam from pillar to post” for nearly six years due to delays and what it described as the respondents’ “delay dallying tactics or non-cooperative attitude.”
Thus, the Court did not consider the passage of time, by itself, sufficient reason to deny relief where the underlying grievance was genuine and the assessee had already suffered taxation on the same income.
Relief Granted by the High Court
The Delhi High Court accordingly quashed the order dated December 9, 2025, by which the Section 119(2)(b) application had been rejected.
The Court permitted the petitioner to file an online or offline revised return for AY 2016-17 on or before October 31, 2026.
The Assessing Officer was directed to consider the revised return in accordance with law and pass an appropriate order within three months from the date of filing.
Key Takeaway for Taxpayers
The ruling reinforces an important principle in income-tax administration: an assessee should not be made to pay tax twice on the same income because of an inadvertent reporting or Form 26AS mismatch.
The judgment also demonstrates that procedural provisions such as Section 119(2)(b) should not be applied mechanically where genuine hardship and an obvious case of double taxation are established.
For taxpayers facing similar situations, the decision highlights the importance of maintaining documentary evidence showing the original reporting of income, subsequent changes in Form 26AS, tax payments and all applications made before the tax authorities.
Case Details
Case Title: Sojitz Asia Pte. Ltd. v. The Commissioner of Income Tax (International Tax), New Delhi & Ors.
Case No.: W.P.(C) 7495/2026
Court: Delhi High Court
Key Provisions: Sections 119(2)(b), 154 and 264 of the Income Tax Act, 1961
Core Issue: Double taxation of the same income and the availability of relief through a revised return.