2004 (8) TMI 36 - HC - Income Tax

Refund - Petitioner has filed this petition seeking a direction to the respondents to refund an amount along with interest due thereon on account of excess payment recovered from him under the Kar Vivad Samadhan Scheme, 1998, enacted under Chapter IV of the Finance (No. 2) Act, - In the present case, the excess amount had not even been paid under a mistake. It had been paid under protest. - In view of the above, we are satisfied that the petitioner is entitled to the refund of the amount of Rs. 89,228 recovered from it in excess of the amount due under the Scheme which had been paid under protest - Writ petition is, accordingly, allowed. The respondents are directed to refund the amount of Rs. 89,228 along with interest due thereon, if any, in accordance with law

Summary

Issues:
Petition seeking refund under Kar Vivad Samadhan Scheme, 1998 due to excess payment recovered. Interpretation of Section 93 of the Act regarding refundability of excess amount paid. Application of legal principles from previous judgments on refund of excess tax paid under protest.

Analysis:
The petitioner filed a petition seeking a refund of Rs. 89,228 along with interest due, which was an excess payment recovered under the Kar Vivad Samadhan Scheme, 1998. The Commissioner of Income-tax had erroneously included this amount in the total demand, but upon the petitioner's objection, a revised intimation was issued reducing the payable amount to Rs. 6,13,864. The petitioner had paid the entire amount under protest within the stipulated time frame to avail the Scheme's benefits. The court noted that Section 93 of the Act states that any amount paid under a declaration made under Section 88 shall not be refundable. However, it was observed that the excess amount was not due under the Scheme as per the revised intimation. Refundability of excess tax paid under protest was supported by legal precedents like Biru Mai Gauri Shankar Jain and Co. v. CIT and Vasantlal Tulsidas Agrawal v. CIT, emphasizing that if a declaration does not fall within the Scheme's purview, the tax paid in pursuance thereof is refundable. The court held that the petitioner was entitled to the refund of the excess amount paid under protest.

The court distinguished the case from Union of India v. Onkar S. Kanwar, where the refund was sought for tax paid under valid declarations. In the present case, the excess amount was not charged under any declaration made by the petitioner. Therefore, the court allowed the writ petition, directing the respondents to refund the amount of Rs. 89,228 along with any interest due within two months from the date of the order, without imposing any costs.