Supreme Court To Examine If Delay In Filing ITR Can Be Condoned Under Section 119(2)(b) Of Income Tax Act

The Supreme Court is to examine whether a delay in filing a return of income can be condoned under Section 119(2)(b) of the Income Tax Act, 1961.

A Bench of Justice J.B. Pardiwala and Justice K.V. Viswanathan issued notice in a Special Leave Petition filed by Sirez Limited challenging the judgment dated December 8, 2025, of the Delhi High Court.

“The short point that falls for our consideration is whether delay in filing the Return of income can be condoned under Section 119(2)(b) of the Act, 1961,” the Court observed.

The Court noted that there was a delay at the end of the petitioner in filing the Return of Income for Assessment Year 2018–2019. The Central Board of Direct Taxes (CBDT) had rejected the application filed under Section 119(2)(b) of the Act, thereby declining to condone the delay.

The refusal to condone the delay led to denial of carry forward of business loss of Rs.1,06,60,750 and denial of refund/credit of TDS of Rs. 19.73 lakhs.

Notice was issued, and the matter has been listed for further hearing on March 9. 

The Delhi High Court had dismissed the writ petition filed by the petitioner challenging the CBDT's order dated November 23, 2023 passed under Section 119(2)(b) of the Act.

Before the High Court, the petitioner stated that it did not file its Return of Income for Assessment Year 2018–19 within the extended period up to October 31, 2018, and that the return was filed on September 20, 2021, after a delay of 30 months.

The petitioner attributed the delay to an inter se dispute amongst the directors and a financial crunch.

Rejecting the contention, the High Court held that “the internal dispute among the Directors of the company is not a genuine hardship, which can be the ground on which the delay can be condoned.”

It further observed that “the dispute between the Directors, when the company is an ongoing concern, cannot be the reason to not to file the ITR, which is a statutory obligation on the part of the company.”

The High Court noted that “no document has been filed evidencing the same” and observed that allowing such condonation would lead to a “vast expansion of the term 'genuine hardship'” in the absence of extraordinary circumstances.

For Petitioner: Senior Advocate Santosh Kumar, Advocate Madhurendra Sharma, Advocate Rakesh Kumar Singh, Advocate Rajiv R. Mishra, Advocate Neeraj Dwivedi, Advocate-on-Record Ashutosh Yadav