MR BALAJI K vs. CHIEF COMMISSIONER OF INCOME TAX

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WP/24090/2026HC KarnatakaKAHC01053119202619 August 2026Author: B M SHYAM PRASAD11 pages
AI SummaryRemanded

What did the High Court hold?

The High Court observed that a separate application for condonation of delay had not been filed with the second respondent (Principal Commissioner of Income Tax). Therefore, the Court decided to interfere with the matter by disposing of the petition with liberty to the petitioners to file a certified copy of the order with the second respondent. The second respondent was directed to call for a report from the Jurisdictional Assessing Officer regarding the petitioners' application for condonation of delay under Section 119(2)(b) of the IT Act for the assessment year 2019-20. The Court also provided liberty to the petitioners to file another application under Section 119(2)(b) if necessary. The second respondent is to consider the application(s) in light of the petitioners' assertion of ownership based on a decree and the fact that compensation, exempt under Section 96 of the Act of 2013, was received only in 2024 after the civil dispute resolution. The decision is to be communicated within three months of receiving the certified copy of the order. The Court also made a provision for the contingency where the Jurisdictional Assessing Officer might not have forwarded the application.

What were the facts?

The petitioners, legal heirs of deceased landowners, asserted title over certain lands acquired by KIADB. Compensation for this acquisition was delayed due to a dispute over ownership, which was eventually resolved in the petitioners' favour by a decree. KIADB subsequently deposited the compensation. The petitioners, who had filed returns for assessment year 2019-20, filed revised returns in 2025 after receiving the compensation. They sought condonation of delay in filing these revised returns and a refund of Tax Deducted at Source (TDS) deposited by KIADB, citing Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, which exempts such compensation from tax. The Assessing Officer had issued a notice seeking reasons for non-filing of returns, to which the petitioners responded, but no action was taken.

What were the issues?

1. Whether the High Court should direct the respondents to condone the delay in filing the revised returns of income by the petitioners for assessment year 2019-20, and consequently, refund the TDS collected, in light of Section 96 of the Act of 2013? Assessee's Arguments: The petitioners argued that the compensation received for land acquisition is exempt from tax under Section 96 of the Act of 2013. They contended that the delay in filing revised returns was due to the resolution of a civil dispute over land ownership and the subsequent receipt of compensation. They relied on a previous High Court order in W.P.No.26990/2025, which directed condonation of delay and refund of tax in similar circumstances. Revenue's Arguments: The revenue, represented by the learned Senior Standing Counsel, submitted that any application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961, must be considered by the Principal Commissioner of Income Tax (the second respondent) and not the Jurisdictional Assessing Officer. They suggested that the petition could be disposed of with liberty to the petitioners to file a certified copy of the order with the second respondent for consideration, noting that the Assessing Officer would likely have forwarded the application to the second respondent.

Which sections of the Income-tax Act were involved?

Section 119(2)(b),Section 96

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 19TH DAY OF AUGUST, 2026 BEFORE THE HON'BLE MR. JUSTICE B M SHYAM PRASAD WRIT PETITION NO. 24090 OF 2026 (T-IT)

BETWEEN:

1.

MR BALAJI K S/O LATE K KRISHNAM RAJU AND MRS. LAKSHMAMMA AGED ABOUT 50 YEARS NO.41, 5TH TEMPLE ROAD, 13TH CROSS, MALLESHWARAM, BANGALORE-560003

MRS. RASHMI. R.S, W/O LATE K. SRINIVASAMURTHY AGED ABOUT 44 YEARS NO.41, 5TH TEMPLE ROAD, 13TH CROSS, MALLESHWARAM, BANGALORE-560003 …PETITIONERS (BY SRI. AJAY J NANDALIKE, ADVOCATE A/W SRI. PURUSHOTHAM R., ADVOCATE)

AND:

1.

CHIEF COMMISSIONER OF INCOME TAX [CCIT], BENGALURU-1, AN AUTHORITY UNDER SECTION 116 OF

Digitally signed by VANAMALA N Location: HIGH COURT OF KARNATAKA

CENTRAL REVENUE BUILDING, QUEENS ROAD, BENGALURU-560001

PRINCIPAL COMMISSIONER OF INCOME TAX, BENGALURU-3, AN AUTHORITY U/S 116 OF BMTC BUILDING, KORAMANGALA, BANGALORE-560095

3.

THE INCOME TAX OFFICER, WARD 5(3)(2) BENGALURU, THE ASSESSING OFFICER UNDER INCOME TAX, ACT, 1961 BMTC BUILDING, 80 FEET ROAD KORAMANGALA, BENGALURU-560034

4.

THE INCOME TAX OFFICER, WARD 3(2)(1) BENGALURU, THE ASSESSING OFFICER UNDER INCOME TAX, ACT, 1961 BMTC BUILDING, 80 FEET ROAD KORAMANGALA, BENGALURU-560034

5.

CENTRAL BOARD OF DIRECT TAXES, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, AN AUTHORITY UNDER NORTH BLOCK,

NEW DELHI - 110 011 REPTD. BY ITS CHAIRMAN, CBDT …RESPONDENTS (BY SRI. THIRUMALESH, ADVOCATE A/W SRI. NIRMAL MATHEW)

THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE A WRIT OF MANDAMUS OR DIRECTION IN THE NATURE OF WRIT OF MANDAMUS DIRECTING THE RESPONDENTS TO CONDONE THE DELAY CAUSED IN FILING THE REVISED RETURNS OF INCOME BY THE PETITIONERS VIDE ANNEXURE-H AND H1; ISSUE A WRIT OF MANDAMUS OR DIRECTION IN THE NATURE OF WRIT OF MANDAMUS DIRECTING THE RESPONDENTS TO REFUND THE ENTIRE TAX COLLECTED BY THE RESPONDENTS BACK TO THE PETITIONERS VIDE ANNEXURE-G AND G1, RESPECTIVELY ALONG WITH APPLICABLE INTEREST FROM THE DATE OF DEPOSIT TILL ACTUAL PAYMENT TO THE PETITIONERS, IN TERMS OF THE ORDER PASSED BY THIS HON'BLE COURT.

THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER:

CORAM: HON'BLE MR. JUSTICE B M SHYAM PRASAD ORAL ORDER

petitioners, as legal heirs Mr. K. Krishnam Raju and Mrs. Lakshmamma, assert title over an extent of 3 acres 20 guntas in Sy.No.87/3 and Sy.No.87/4 of Kothanur Village, Uttarahalli Hobli, Bengaluru South Taluk [the subject lands]. M/s. Karnataka Industrial Areas Development Board [KIADB] has acquired the subject lands, and surrounding lands under Karnataka Industrial Areas Development Act, 1966. payment of compensation for acquisition is delayed with dispute over the petitioners' claim to the subject lands, but this dispute is ultimately resolved [as asserted by the petitioners] with a decree in their favour. petitioners are categorical that M/s. KIADB has deposited the compensation payable after this decree.

The petitioners, who had filed returns for the assessment year 2019-20, have filed their revised returns in the year 2025 [after the compensation is credited to their account]. The petitioners seek directions to the respondents [including the Principal Commissioner of Income Tax - the second respondent] to condone the delay in filing the revised returns and refund the TDS affected by M/s. KIADB asserting that in view of Section 96 of the Right to Fair Compensation and Transparency Land Acquisition, Rehabilitation and Resettlement Act, 2013 [for short, ‘the Act of 2013’], the compensation paid towards acquisition of land would be exempt from tax.

3.

Mr. Ajay J Nandalike, the learned counsel for petitioners, submits that when petitioners have filed their revised returns, the Jurisdictional Assessing Officer has caused the

Communication dated 06.02.2026 [Annexure - J] calling upon the petitioners to file draft return of income furnishing proof of reasons for non-filing of return of income and that the petitioners have responded to such notice but no action has been taken so far. The learned counsel submits that in similar circumstances, this Court W.P.No.26990/2025, which is decided on 31.10.2025, has interfered with the refusal to condone delay directing the Authorities to refund the entire tax collected and that the petitioners would be entitled for similar relief in the present circumstances as well.

4.

Mr. M. Thirumalesh, the learned Senior Standing counsel who is assisted by Mr. Nirmal Mathew, the learned Standing counsel for the respondents, is heard on the terms for disposal of the petition. Mr. M. Thirumalesh submits that the petitioners may rely upon Annexure - J [a

Communication dated 06.02.2026 addressed by the Jurisdictional Assessing Officer], but this Court must consider that any application for condonation of delay under Section 119(2)(b) of the Income Tax Act, 1961 [for short, 'the IT Act'] must be considered by the second respondent and that the application could not have been submitted to the Jurisdictional Assessing Officer.

5.

Mr. M. Thirumalesh and Mr. Nirmal Mathew, while inviting this Court’s attention to the pleadings and the annexures in another writ petition in W.P.No.24169/20261, submit that this Court could examine disposing of the petition with liberty to the petitioners to file a certified copy of this Order with the second respondent for consideration of their application which is filed with Jurisdictional Assessing Officer emphasizing that in

1 This writ petition is also disposed of by this Court by a separate Order.

all probability, the Jurisdictional Assessing Officer, as done case petitioners W.P.No.24169/2026, would have referred application to the second respondent.

6.

This Court, on a careful consideration of the circumstances and the submissions, and because it is brought out to this Court's satisfaction that a separate application for condonation of delay is not filed with the second respondent, must opine that there must be interference with liberty to the petitioners to file a certified copy of this order with the second respondent. Further, this Court is of the opinion that the second respondent, upon receipt of certified copy, must verify whether Jurisdictional Assessing Officer has forwarded the petitioner’s application for condonation of delay and decide on the petitioners’ request for condonation in the light of factors such as that:

 they assert ownership to the subject land based on a decree, and  they have been admitted to compensation which is exempt under Section 96 of the Act of 2013 only in the year 2024 after the resolution of the civil dispute.

This Court must also provide for a contingency of the Jurisdictional Assessing Officer having not forwarded the petitioners’ application for condonation of delay. In the light of the afore, the following. ORDER [A] petition stands disposed reserving liberty to the petitioners to file a certified copy of this Order with the Principal Commissioner of Income Tax, Bengaluru -3 [the second respondent], who shall call for a Report from the Jurisdictional Assessing Officer on the petitioners’ application under Section

119(2)(b) of the IT Act for condonation of delay in filing the revised returns dated 13.02.2026 for the assessment year 2019-2020. [B] The petitioners, along with a certified copy of this order, is reserved with liberty to file another application under Section 119(2)(b) of the IT Act, and the second respondent is called upon to consider the application/s so filed and examine whether there must be condonation of delay in the light of this Court’s observations. [C] The second respondent shall call for a Report from the Jurisdictional Assessing Officer and decide on the application/s and communicate the decision to the petitioners within three [3] months from

the date of receipt of a certified copy of this order.

Sd/- (B M SHYAM PRASAD) JUDGE

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