2026 (2) TMI 572 - HC - Income Tax

Revised return condonation for income tax assessment refiled; authority directed to reconsider revised return under applicable law.

Petitioner sought to file a revised income tax return for assessment year 2018-19 to correct an apparent mis declaration of exempt dividend income; the ... Rejecting the application filed u/s 119(2)(b) - seeking condonation of delay for filing revised returns - provision to entertain an application beyond 5 years from the end of the relevant assessment year - whether petitioner is to be permitted to file a revised return? - HELD THAT:- The narration of facts would indicate that the petitioner has taken appropriate steps to have the mistake rectified. Though the petitioner was under a wrong impression that a rectification would suffice, however eventually authority has conveyed to the petitioner that rectification may not have been an appropriate remedy. The fact that the application for rectification and the grievance raised by the petitioner were within the time limit of 5 years, even as per the circular under Section 119(2)(b) would by itself be sufficient to intervene in this matter. Rightfully so, the authority concerned could not have gone beyond the condition laid down in the circular. However, noticing the mis-declaration which appears to be a bonafide error, without entering into the merits of the contents of the revised return, suffice it to say that the order at Annexure-P could be set aside and the matter be remitted for consideration of revised return of the petitioner at Annexure-D by the authority for the assessment year 2018-19 in accordance with law. Issues: Whether the order rejecting the application for condonation of delay for filing a revised return (under Section 119(2)(b) of the Income-tax Act, 1961 and in light of CBDT Circular No. 11/2024 dated 01.10.2024) should be set aside and the matter remitted for consideration of the revised return for the assessment year 2018-19.Analysis: The petitioner filed the original return for assessment year 2018-19 and later sought rectification and/or to file a revised return to correct an apparent mis-declaration in Schedule-EI concerning exempt/dividend income. The authority rejected the condonation application relying on CBDT Circular No. 11/2024 which prescribes a five-year limitation from the end of the relevant assessment year for entertaining revised returns under Section 119(2)(b). The Court examined the factual record showing a bona fide, apparent mistake in the exempt income declaration and noted that rectification efforts and grievance communications were made within the five-year period indicated by the circular. The Court did not decide the merits of the revised return content but focused on whether the petitioner should be permitted to have the revised return considered in accordance with law.Conclusion: The order dated 22.12.2025 rejecting the condonation application is set aside and the matter is remitted to the authority to consider the petitioner's revised return for assessment year 2018-19 in accordance with law. The petition is disposed of and all contentions are kept open.