GANESH BABU vs. THE CENTRAL BOARD OF DIRECT TAXES

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WP/16689/2023HC KarnatakaKAHC01038948202312 November 2025Bench: S.R.KRISHNA KUMAR5 pages
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What did the High Court hold?

The High Court of Karnataka allowed the petition. The Court noted that the issue in controversy was directly covered by its previous judgment in C.M. Uma Vs. The Chief Commissioner of Income Tax. In that case, the Court had held that Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013, was applicable to compensation for land acquired under the National Highways Act, 1956, making such compensation exempt from TDS/income tax. Consequently, the respondent's refusal to condone the delay in filing returns and the application under Section 119(2)(b) were held to be erroneous and deserved to be allowed. Applying this precedent, the High Court quashed the impugned order dated 12.05.2023 passed by the CBDT. The respondents were directed to permit the petitioner to file revised returns for assessment years 2016-17 and 2017-18 and to take necessary steps to open the e-portal for the petitioner to facilitate the filing of these revised returns. The principle established is that compensation for land acquired under the National Highways Act, 1956, is exempt from income tax, and delays in filing returns in such cases should be condoned under Section 119(2)(b) if the application is otherwise in order.

What were the facts?

The petitioner, Ganesh Babu, filed a writ petition challenging an order dated 12.05.2023 passed by the Central Board of Direct Taxes (CBDT) under Section 119(2)(b) of the Income Tax Act, 1961. This order pertained to assessment years 2016-17 and 2017-18. The petitioner sought to quash this order and sought directions to permit filing revised returns of income and condone the delay. The respondents included the CBDT, the Assistant Commissioner of Income Tax, and the Principal Chief Commissioner of Income Tax, Karnataka and Goa. The High Court of Karnataka heard arguments from both sides and perused the record.

What were the issues?

1. Whether the impugned order dated 12.05.2023 passed by the respondent No.1 under Section 119(2)(b) of the Income Tax Act, 1961, for assessment years 2016-17 and 2017-18, is liable to be quashed? (Question of law/mixed law and fact, turning on Section 119(2)(b) of the Income Tax Act, 1961). 2. Whether the respondents should be directed to permit the petitioner to file a revised return of income and condone the delay for assessment years 2016-17 and 2017-18? (Question of law/mixed law and fact, turning on Section 119(2)(b) of the Income Tax Act, 1961). Assessee's Contentions: The petitioner sought to quash the impugned order and sought directions to file revised returns, condoning the delay. The petitioner relied on the judgment of this Court in C.M. Uma Vs. The Chief Commissioner of Income Tax – W.P.No.19197/2024 dated 08.08.2024. Revenue's Contentions: The judgment records that learned counsel for the respondents also urged contentions, but their specific arguments are not detailed.

Which sections of the Income-tax Act were involved?

Section 119(2)(b),Section 96

AI-generated summary — verify with the full judgment below

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HC-KAR NC: 2025:KHC:47140 WP No. 16689 of 2023

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF NOVEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 16689 OF 2023 (T-IT) BETWEEN:

GANESH BABU, SON OF LATE Y. L. RAMAREDDY, AGED ABOUT 58 YEARS 100 FT ROAD, KATTRIGUPPE BSK 3RD STAGE, BENGALURU – 560 085 PAN AAUPB9368A …PETITIONER (BY SRI. ANNAMALAI S., ADVOCATE)

AND:

1.

THE CENTRAL BOARD OF DIRECT TAXES REP. BY ITS CHAIRPERSON GOVERNMENT OF INDIA, MINISTRY OF FINANCE, DEPARTMENT OF REVENUE, NORTH BLOCK, NEW DELHI – 110 001

2.

THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE (1)(1), BMTC BUILDING 80 FEET ROAD, 6TH BLOCK, NEAR KHB GAMES VILLAGE, KORAMANGALA, BANGALORE – 560 095

3.

THE PRINCIPAL CHIEF COMMISSIONER OF INCOME TAX KARNATAKA AND GOA, CENTRAL REVENUE BUIDING, QUEEN’S ROAD, BANGALORE – 560 001 …RESPONDENTS (BY SRI. E.I. SANMATHI, ADVOCATE)

Digitally signed by CHANDANA B M Location: High Court of Karnataka

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HC-KAR NC: 2025:KHC:47140 WP No. 16689 of 2023

THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER U/S 119(2)(b) OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) DATED 12.05.2023 PASSED BY THE RESPONDENT NO.1 IN F.NO.225/96/2021-ITA-II FOR THE ASSESSMENT YEARS 2016-17 AND 2017-18 ANNEXURE-A AND ETC.,

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

CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR

ORAL ORDER

In this petition, petitioner seeks for the following reliefs:- “i) Issue a writ of certiorari or a direction in the nature of a writ of certiorari quashing the order under section 119(2)(b) of the Income Tax Act, 1961 (for short ‘the Act’) dated 12.05.2023 passed by the Respondent No.1 F.No.225/96/2021-ITA-II for the assessment years 2016-17 and 2017-18 (Annexure-A). ii) Issue a writ of mandamus or a direction in the nature of a writ of mandamus directing to the respondents to permit the petitioner to file a revised return of income in order to declare income in accordance with law and condone the delay in filing the revised return of income for the assessment years 2016-17 and 2017- 18. iii) And pass such other orders as this Hon’ble Court deems fit and proper in the interest of justice and equity.”

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HC-KAR NC: 2025:KHC:47140 WP No. 16689 of 2023

2.

Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. Though several contentions have been urged by both sides in support of their respective claims, the issue in controversy between the parties is directly and squarely covered by the judgment of this Court in the case of C.M. Uma Vs. The Chief Commissioner of Income Tax – W.P.No.19197/2024 dated 08.08.2024, wherein it is held as under: “9. In the result, the points formulated above are answered as hereunder:- (i) Section 96 of the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 is applicable to compensation for land acquired under the National Highways Act, 1956; (ii) The compensation for acquisition of land under the National Highways Act, 1956, is exempt from payment of TDS / income tax. (iii) The respondent erred in refusing to condone the delay in filing the Income Tax returns and consequently, the application filed by the petitioner under Section 119(2)(b) of the Income Tax Act, 1961, deserves to be allowed.

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HC-KAR NC: 2025:KHC:47140 WP No. 16689 of 2023

10.

In view of the aforesaid facts and circumstances, I am of the view that the impugned order at Annexure-C dated 28.06.2024 passed by the respondent deserves to be set aside and the application filed by the petitioner on 27.03.2023 under Section 119(2)(b) of the Income Tax Act, 1961, deserves to be allowed by condoning the delay in filing the income tax returns for assessment year 2022-23 and necessary directions are to be issued in this regard.

11.

In the result, I pass the following:- ORDER (i) Petition is hereby allowed. (ii) The impugned order at Annexure-C dated 28.06.2024 passed by the respondent is hereby quashed. (iii) The application filed by the petitioner on 27.03.2023 under Section 119(2)(b) of the I.T.Act 1961, is hereby allowed and delay stands condoned. (iv) The respondent is directed to receive the income tax returns submitted by the petitioner and proceed further in accordance with law.”

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HC-KAR NC: 2025:KHC:47140 WP No. 16689 of 2023

4.

Under these circumstances, in the instant case, the petitioner intends to file revised returns and in the light of the aforesaid judgment, the impugned order deserves to be quashed and the petition is disposed of by issuing certain directions. 5. In the result, I pass the following: ORDER

i) The petition is hereby allowed. ii) The impugned order dated 12.05.2023 passed by respondent No.1 at Annexure-A, is hereby quashed. iii) The respondents are directed to permit the petitioner to file revised return of income for assessment years 2016-17 and 2017-18 and proceed further in accordance with law. iv) To enable the petitioner to file revised returns as stated supra, the respondents are directed to take necessary steps to open the e-portal in favour of the petitioner. Sd/- (S.R.KRISHNA KUMAR) JUDGE MDS List No.: 2 Sl No.: 38

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