SRI SUMANTH SURENDRA vs. THE COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION)

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WP/14806/2025HC KarnatakaKAHC01030007202509 July 2025Bench: SURAJ GOVINDARAJ7 pages
AI SummaryRemanded

What did the High Court hold?

The High Court allowed the writ petition and quashed the order dated 04.02.2025 passed by the Commissioner of Income Tax (International Taxation). The Court reasoned that the Commissioner ought to have considered that the petitioner, a software professional, filed the returns himself without expert advice and subsequently realized his mistake. The very fact of a tax demand being made on income not legitimately taxable in India, or for which foreign tax credit was available, constituted hardship. The Court found the Commissioner's rejection of the request without considering these aspects, and potentially based on an incomplete assessment of hardship, to be unreasonable. The matter was remitted to the Commissioner for fresh consideration, taking into account the taxes paid in Australia and calculating the income taxable in India. The petitioner was directed to appear before the Commissioner on 28.07.2025 for a personal hearing, with the Commissioner to pass necessary orders within eight weeks thereafter.

What were the facts?

The petitioner, Sri Sumanth Surendra, a non-resident Indian employed by Infosys Limited and posted in Australia, paid taxes in Australia on his salary earned there. While filing his Indian income tax return for Assessment Year 2019-20, he inadvertently included this Australian salary and offered it for taxation in India without claiming non-resident status. Upon realizing his mistake and the entitlement to foreign tax credit (or that the income was not taxable in India), he made an application. The Commissioner of Income Tax (International Taxation), the first respondent, rejected his request for condonation of delay in filing a revised return under Section 119(2)(b), citing no genuine hardship. The petitioner challenged this order before the High Court of Karnataka.

What were the issues?

1. Whether the order dated 04.02.2025 passed by the Commissioner of Income Tax (International Taxation) under Section 119(2)(b) of the Income Tax Act, 1961, rejecting the petitioner's request to condone the delay in filing a revised return for AY 2019-20, is sustainable in law? Assessee's Contention: The petitioner argued that the Commissioner failed to consider that the returns were filed by the petitioner himself without expert advice, and the subsequent realization of the mistake and the imposition of tax demand constituted genuine hardship. The petitioner sought to quash the impugned order and direct the condonation of delay. Revenue's Contention: The judgment does not record specific arguments made by the revenue. However, the Commissioner's order, as described by the petitioner, rejected the request due to a finding of no genuine hardship.

Which sections of the Income-tax Act were involved?

Section 119(2)(b)

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:25096 WP No. 14806 of 2025

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF JULY, 2025 BEFORE THE HON'BLE MR. JUSTICE SURAJ GOVINDARAJ WRIT PETITION NO. 14806 OF 2025 (T-IT) BETWEEN:

SRI SUMANTH SURENDRA S/O MR. UPENDRA SURENDRA AGED ABOUT 42 YEARS C/O NO 479,19TH MAIN, 4TH T BLOCK, JAYANAGAR, BANGALORE-560041 MOBILE9448629663 EMAIL ID NARENDRA@NNMS.IN

…PETITIONER (BY SRI. NARENDRA KUMAR J. JAIN., & SMT. GEETHA RANI K.,ADVOCATE)

AND:

1.

THE COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION) BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA BENGALURU -560095

2.

THE ASSISTANT DIRECTOR OF INCOME TAX CENTRAL PROCESSING UNIT (CPC) INCOME TAX DEPARTMENT BENGALURU-560500

3.

THE DEPUTY COMMISSIONER OF INCOME TAX (INTERNATIONAL TAXATION), CIRCLE -2(1) BMTC BUILDING, 80 FEET ROAD, 6TH BLOCK, KORAMANGALA BENGALURU -560095

Digitally signed by SHWETHA RAGHAVENDRA Location: HIGH COURT OF KARNATAKA

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HC-KAR NC: 2025:KHC:25096 WP No. 14806 of 2025

…RESPONDENTS (BY SRI. E.I. SANMATHI ACCEPTS NOTICE FOR R1 & R3; SRI. ARAVIND V. CHAVAN., ACCEPTS NOTICE FOR R2)

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH AS FAR AS THE PETITIONER IS CONCERNED BY AN APPROPRIATE WRIT OR ORDER IN THE NATURE OF CERTIORARI OR OTHERWISE THE IMPUGNED ORDER VIDE ITBA/COM/F/17/2024-25/1072881672(1) DTD. 04.02.2025 ISSUED BY THE LEARNED R-1 UNDER SECTION 119(2) (b) FOR AY 2019-20 ENCLOSED IN ANNX-A AND ETC.

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

CORAM: HON'BLE MR. JUSTICE SURAJ GOVINDARAJ

ORAL ORDER

1.

The petitioner is before this Court seeking for the following reliefs: a. Quash the far as the petitioner is concerned by an appropriate writ or order in the nature of certiorari or otherwise the impugned order vide ITBA/COM/F/17/2024-25-1072881672(1) dated 04.02.2025 issued by the Learned First Respondent under Section 119(2)(b) for AY 2019-20, enclosed in Annexure-A.

b. Issue as far as petitioner is concerned by an appropriate writ or order in the nature of mandamus or otherwise, directing the Learned First Respondents to condone the delay in filing revised return as per application filed by the petitioner under section 119(2)(b) enclosed in Annexure-F for AY 2019-20.

c. Issue as far as petitioner is concerned by an appropriate writ or order in the nature of

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HC-KAR NC: 2025:KHC:25096 WP No. 14806 of 2025

Mandamus or otherwise, directing the Learned Respondents to grant Foreign Tax credit for the taxes paid aboard as per Annexure-C in case the petitioner is treated as resident.

d. Grant such other relief as this Hon’ble High Court may think fit including the cost of this writ petition.

e. Issue such other order or direction as this Hon’ble Court deems fit under the circumstances of the case in the interest of justice and equity.

2.

The petitioner is a Non-resident of India, was employed by Infosys Limited and posted in Australia. The salary being received in Australia, the petitioner made payment of the due taxes on the said salary as per the law applicable in Australia. By inadvertence the petitioner while filing returns in India included the salary received by the petitioner in Australia and without claiming the benefit of a Non-resident Indian had made available his income for tax. Subsequently, realizing that the petitioner has already made payment of taxes on the salary received in Australia, for which the petitioner is not required to make payment of taxes in India and that he was entitled to

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HC-KAR NC: 2025:KHC:25096 WP No. 14806 of 2025

foreign tax credit had made an application. Subsequently realizing that since the petitioner is a Non-resident India and as such not entitled to foreign tax credit had again made another application. 3. The contention of learned counsel for the petitioner is that these aspects were not considered by respondent effectively and properly inasmuch as the respondent No.1 having come to a conclusion that there is no genuine hardship which had been placed by the petitioner, dismissed the request for the amendment which had been sought for. It is challenging the same the petitioner is before this court. 4. It is not in dispute that the petitioner continues to be a citizen of India and as such, had filed his returns in India, but, however had included the income received by him in Australia. This apparently has also occurred on account of the fact that the petitioner has had no expert advice but the returns were filed

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HC-KAR NC: 2025:KHC:25096 WP No. 14806 of 2025

by the petitioner by himself, the petitioner being a software professional. 5. It is only subsequently that the petitioner has received advice and has come to know of the applicable laws and as regards the taxes which are required to be paid by the petitioner. Respondent No.1 having rejected the contention of the petitioner that there is no genuine hardship which has been made out, what the respondent No. 1 ought to have also taken into consideration was that the returns having been filed by the petitioner by himself, the petitioner subsequently realizing his mistake, the very fact of imposition of tax and or the demand for payment of tax would by itself amount to a hardship since if the amounts are not required to be paid and a demand is made in regard thereto, it would affect hardship on the part of the petitioner. These aspects ought to have been taken into consideration by the respondent No.1 rather than rejecting the request of

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HC-KAR NC: 2025:KHC:25096 WP No. 14806 of 2025

the petitioner by an order which does not which does not consist of all reasons, unreasonable. 6. In that view of the matter, I pass the following: ORDER i. The Writ petition is allowed. A certiorari is issued. The order dated 4.02.2025 at Annexure-A is quashed. ii. The matter is remitted to the respondent No.1 for fresh consideration by considering all the documents which have been already furnished by the petitioner and any further documents that the petitioner wishes to submit in relation thereto and pass necessary orders after taking into account the taxes which have been paid by the petitioner on the income accrued in Australia and by calculating and tabulating the income arising and accruing in India for which the petitioner would be liable to make payment of income tax.

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HC-KAR NC: 2025:KHC:25096 WP No. 14806 of 2025

iii. Since the order is passed in the presence of counsel for the petitioner, the petitioner shall appear before the first respondent without requirement of any further notice on 28.07.2025 at 02.30 p.m. and submit all other further documents that the petitioner wishes to rely upon. iv. Respondent No. 1 is directed to afford personal hearing to the petitioner on the very same date 28.07.2025 and thereafter pass necessary orders within a period of eight weeks thereafter.

Sd/- (SURAJ GOVINDARAJ) JUDGE

LN List No.: 1 Sl No.: 55

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