HAQ STEELS PVT LTD — R/Special Civil Application No. 7869 of 2025

NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 7869 of 2025 With CIVIL APPLICATION (FOR AMENDMENT) NO. 1 of 2026 In R/SPECIAL CIVIL APPLICATION NO. 7869 of 2025 FOR APPROVAL AND SIGNATURE: HONOURABLE MR. JUSTICE A.S. SUPEHIA and HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI ============================================= Approved for Reporting Yes No ✔ ============================================= HAQ STEELS PVT LTD Versus PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) AHMEDABAD ============================================= Appearance: JAIMIN A GANDHI(8065) for the Petitioner(s) No. 1 MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1 ============================================= CORAM:HONOURABLE MR. JUSTICE A.S. SUPEHIA and HONOURABLE MS. JUSTICE VAIBHAVI D. NANAVATI Date : 30/06/2026 ORAL JUDGMENT (PER : HONOURABLE MR. JUSTICE A.S. SUPEHIA) 1. Learned advocates appearing for the respective parties are extensively heard by us and the matter is taken up for final hearing and final disposal. 2. In the present writ petition, the petitioner herein has prayed for quashing and setting aside the order dated Page 1 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined 23.01.2025 passed by the respondent- Principal Commissioner of Income Tax (Central), Ahmedabad, rejecting the application filed by the petitioner seeking condonation of delay in filing Form 10DA under of the Income Tax Act, 1961 (for short 'the Act'). 3. The petitioner filed return of income for the Assessment Year (for short 'A.Y.') 2019-20 on 02.10.2019, for A.Y. 2020-21 on 02.12.2020 and for A.Y.2021-22 on 22.12.2021. It is the case of the petitioner that the petitioner is entitled to claim deduction under of the Act of Rs.22,93,740/- for A.Y.2019-20, Rs.41,13,560/- for A.Y.2020-21 and Rs.23,51,080/- for A.Y.2021-22. 3.1 The petitioner realized the mistake in not claiming the deduction as it was not advised by the Chartered Accountant M/s. KPSJ & Associates LLP under of the Act. The petitioner came to know about the fault when he approached the Chartered Accountant, Nimish Vayawala, in October, 2022 for power plant related taxation issues and on his examination of the return of incomes, he drew attention of the petitioner that the petitioner-Company is entitled to claim deduction under of the Act, and hence he advised the petitioner to file an application under of the Act seeking condonation of delay in making the claim and filing the report in Form No.10DA by filing a revised return. 3.2 Accordingly, the petitioner filed an application on 21.11.2022 under of the Act seeking Page 2 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined condonation of delay of 721 days, 600 days and 279 days in claiming deductions for respective years as mentioned herein above. The said application has been rejected by the respondent by order dated 23.01.2025, which is challenged in this writ petition. 4. Learned advocate, Mr. Jaimin A. Gandhi appearing for the petitioner while pointing out to the contents of the impugned order, has submitted that the respondent while passing the impugned order has not appreciated the reasons assigned by the petitioner in the application seeking condonation of delay, and more particularly, the respondent has very vaguely and cursorily rejected the application without examining the aspect of genuine hardship, which would be caused to the petitioner in case the deduction under of the Act is not allowed. In support of his submission, he has placed reliance on the judgment of this Court in the case of , [2019] 108 taxmann.com 608(Guj.). In this regard, further reliance is also placed on the judgment of the Bombay High Court in the case of , [2023] 147 taxmann.com 297 (Bombay). While placing reliance on the judgment of the Supreme Court in the case of .) Ltd., [1992] 64 Taxman 442 (SC), it is contended that the petitioner has no other remedy but, to file an application under of the Act seeking permission to file a revised return for claiming deduction under of the Act. Page 3 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined 4.1 He has also pointed out the certificate dated 13.06.2023 issued by the Chartered Accountant clarifying that inadvertently, the claim under of the Act has not been filed/claimed in the return of income for the assessment years as mentioned herein above. It is submitted that after the filing of the present writ petition for the A.Y. 2019-20 and A.Y.2021-22, the assessment order under of the Act is passed, which is further subject matter of challenge before the Commissioner of Income Tax (Appeals) (for short 'the CIT'). It is submitted that in light of the judgment of the Supreme Court in case of Sun Engineering Works (P.) (Supra), the petitioner has not challenged the decision of the Assessing Officer in disallowing the deduction under of the Act since it is not permissible for the petitioner to claim the deduction in the reassessment proceedings under , of the Act. It is thus, urged that the impugned order may be quashed and set aside and the respondent may be directed to decide the application afresh. 5. Per contra, learned Senior Standing Counsel, Mr.Varun K. Patel for the respondent while placing reliance on the judgment of this Court in the case of , [2024] 161 taxmann.com 304 (Guj.), has urged that looking to the huge delay and unsatisfactory reasons assigned by the petitioner in his application, the respondent has precisely rejected the same. It is also submitted that the reasons assigned by the respondent in the impugned order are legal and valid and hence, it is Page 4 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined urged that the same may not be quashed and set aside. It is further contended that since for the A.Y.2019-20 and 2020-21, the assessment orders are already passed and the appeals filed by the petitioner are already pending, there would be conflict of opinion on the same issue and hence, as per the decision of this Court, the order passed by the respondent rejecting the application seeking condonation of delay in filing Form 10DA under of the Act, may not be disturbed. 6. We have heard the learned advocates appearing for the respective parties at length. The established facts are as under: > (a) The petitioner filed return of income for the A.Y.2019-20 on 02.10.2019, for A.Y. 2020-21 on 02.12.2020 and for A.Y.2021-22 on 22.12.2021. > (b) It is the case of the petitioner that he is entitled to claim deduction under of the Act of Rs.22,93,740/- for A.Y.2019-20, Rs.41,13,560/- for A.Y.2020-21 and Rs.23,51,080/- for A.Y.2021-22. > (c) The petitioner filed an application under L114: > (b) of the Act for the three assessment years on 21.11.2022 pointing out that the petitioner would be faced with the genuine hardship if he is required to pay more taxes than what he is not required to pay due to want of claim of deduction under of the Act. > (d) The petitioner along with the application also produced Page 5 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined the certificate issued by the Chartered Accountant dated 13.06.2023 certifying that due to inadvertence, the claim under of the Act was not brought to the attention of the company and hence, the deduction was not claimed into the Income Tax Return (ITR) and hence, the certificate in Form 10DA was not filed. (e) The petitioner in the writ petition as well as in his application has categorically stated that when he approached another Chartered Accountant, and after reviewing the work of the income tax of all the group of companies, he invited the attention of the petitioner to the availability of the deduction under of the Act, who advised the petitioner to file an application under of the Act seeking condonation of delay in making claim and filing the report by allowing filing of revised return. The said application has been rejected by the impugned order dated 23.01.2025. (f) The respondent has assigned three reasons in rejecting the application. First reason assigned in brief is that, the deduction under of the Act is allowed on the basis of the audit report in specialized Form 10DA, which is to be filed before due date of filing the return and hence, the delay cannot be condoned. Second reason assigned is that, the petitioner did not provide any evidence of initiating any legal action of filing complaint against the Auditor - M/s. KPSJ & Associates LLP , who did not provide proper advice. The final reason which has been assigned is relating to the aspect of genuine hardship, which finds place in the provision of of the Act. It is stated by the respondent that the Page 6 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined hardship cannot be considered in light of financial capacity and liability of the assessee since the assessee is not an individual but, is a body corporate having no financial hardship. 7. At this stage, we may incorporate the provision of of the Act, which reads as under: > "119(2)(b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise [any incometax authority, not being a [a Joint Commissioner (Appeals)] to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law;" 7.1 The expression 'genuine hardship' in the provision of of the Act is the soul of the provision. The Central Board of Direct Taxes (for short 'the Board') is assigned with ample powers, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or classes of cases as mentioned therein, to admit an application after the expiry of period specified under the Act for making such application or claim and deal with the same on merits in accordance with law. The respondent while dealing the expression 'genuine hardship', has assigned a very novel reason that the assessee since is a body corporate and is financial capable, will not face any genuine hardship, if condonation is not allowed. 7.2 We do not subscribe to the reasons assigned by the respondent. Merely, because the petitioner - assessee is a body corporate, the application cannot be rejected by Page 7 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined assigning such ground that it does not face any genuine hardship due to its financial capacity. As mentioned herein above, the claim of the petitioner seeking deduction under of the Act, is substantial in nature. The respondent has ventured into an area which is prohibited as while examining the application under of the Act, the respondent cannot examine the financial capacity of the assessee and conclude that it will not face genuine hardship in case its claim is disallowed. 8. The other reason assigned by the respondent is regarding non-filing any complaint against the Auditor, who did not filling the Form 10DA and the audit reports, is also not palatable. The respondent has not doubted the certificate dated 13.06.2023 issued by the Auditor. Merely, because the petitioner has chosen not to file any complaint against the Auditor, the same will not dilute the contents of the certificate dated 13.06.2023 wherein, the Auditor has admitted that inadvertently, the claim under of the Act for additional cost incurred was not brought to the attention of the petitioner company and hence, the deduction was not claimed in the Income Tax Return (ITR) by filing Form 10DA. On this count also, the impugned order become vulnerable. Thus, the reason assigned of non-filing of the complaint against the auditor/C.A also goes beyond the scope of of the Act. 9. It is not in dispute that the petitioner would get the tax advantage/benefit by way of deduction under of the Act. It is trite that there cannot be a straight jacket formula to determine the genuine hardship of an assessee and it would Page 8 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined depend upon the facts and circumstances of each case. However, the same cannot absolve the respondent from applying the mind by appreciating the claim of the petitioner and the explanation tendered for delay while examining the application filed under the provision of of the Act. 10. The legislature has conferred the power on the Board to condone the delay to enable the authorities to do substantial justice to the parties by considering the reasons assigned in the application on merits. The expression 'genuine hardship' has to be given considered meaning to help the assessee. There may be some cases where the delay is required to be condoned even if, it is inordinate, however, there is a meritorious claim of an assessee which cannot be thrown out at the threshold causing genuine hardship and injustice to an assessee. Ultimately, the provision of of the Act is meant for doing a substantial justice and the same has to be kept in mind while dealing with the applications. At the same time, the authority has also to be alive of the unexplained and deliberate delay in filing claim/application along with the facet of genuine hardship. Overall, the approach of the authority should be justice oriented to do the substantial justice in case the authority finds that the claim made under the application under of the Act is rejected, it would cause the genuine hardship to the assessee. 10.1 In the present case, in fact, the reasons assigned are perfunctory and fall out of line of the settled legal precedent. Page 9 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined 11. Learned Senior Standing Counsel, Mr.Varun K. Patel has placed reliance on the judgment in the case of (Supra). A perusal of the decision of the Coordinate Bench will reveal that the same will not apply to the facts of the present case. On the contrary, in paragraph 8 after examining the provision of of the Act, it is held that the provision makes it clear that if the assessee had made a claim belatedly then delay in making such claim can be condoned by the respondent No.1 for purpose of permitting the petitioner to claim loss, so as to carry forward in the next year for set off. The Coordinate Bench has ultimately rejected the writ petition by observing that the petitioner was habitual in nature in filing belatedly returns. Thus, the decision will not come to the rescue of the respondent in the present case. 12. It is also noted by us that subsequently during the pendency of the petition, the respondent has passed the reassessment orders under the provision of of the Act for A.Y.2019-20 and 2021-22. In the reassessment orders, it is true that the petitioner has claimed the deductions under of the Act, which has been disallowed in the reassessment proceedings against which, the petitioner has filed an appeal before the Commissioner of Income Tax (Appeals). However, the petitioner has not challenged the denial of the deduction and precisely so, since the petitioner in the reassessment proceedings cannot claim deduction under the provision of of the Act, as he failed to do so in filing the original returns. The law in this regard is well settled Page 10 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026 NEUTRAL CITATION C/SCA/7869/2025 JUDGMENT DATED: 30/06/2026 undefined by the judgment of the Supreme Court in the case of Sun Engineering Works (P.) (Supra). 13. Hence, on an overall appreciation of the contents of the impugned order dated 23.01.2025, we are inclined to set aside the same. Hence, the same is quashed. The matter is remanded back to the respondent authority to decide the application filed by the petitioner under of the Act, on merits. The same shall be done within a period of twelve (12) weeks from the date of receipt of writ of this order. We clarify that we have not expressed any opinion on the entitlement of the claim of deduction under of the Act. 14. The writ petition is allowed, accordingly. As a sequel, the connected Civil Application No.1 of 2026 producing assessment order would stands disposed of. (A. S. SUPEHIA, J) (VAIBHAVI D. NANAVATI,J) NEHA/17 Page 11 of 11 Uploaded by NEHA PRAJAPATI(HC01404) on Fri Jul 03 2026 Downloaded on : Sat Jul 04 03:19:56 IST 2026