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Issues Involved:
1. Entitlement to Refund of Paid Tax 2. Consequence of Non-completion of Assessment within the Statutory Period under Section 153 of the Income-tax Act, 1961 Detailed Analysis: 1. Entitlement to Refund of Paid Tax: The petitioner sought a writ of mandamus for the refund of Rs. 58,326.01, along with interest, arguing that no assessment order was passed within the statutory period of two years as mandated by Section 153(1)(a)(iii) of the Income-tax Act, 1961. The petitioner claimed that, in the absence of an assessment order, the tax paid should be refunded. The petitioner relied on Section 240 of the Act, which mandates the refund of any amount due as a result of any order passed in appeal or other proceeding under the Act. However, the court clarified that Section 240 was not applicable, as the petitioner's claim for refund was not a result of any order passed in appeal or other proceeding. The court examined precedents cited by the petitioner but found them inapplicable. In R. Gopal Ramnarayan v. Third ITO [1980] 126 ITR 369 (Kar), the refund was granted due to the annulment of assessment orders by the Tribunal, which was not the case here. Similarly, in Deep Chand Jain v. ITO [1984] 145 ITR 676 (P & H), the refund was based on a revised return showing non-taxable income, which was not the situation in the present case. The court found the Full Bench decision of the Gujarat High Court in Saurashtra Cement and Chemical Industries Ltd. v. ITO [1992] 194 ITR 659 applicable, where it was held that the tax properly collected under the Act should not be refunded merely due to the failure of regular assessment. The court also referred to Saraya Sugar Mills Ltd. v. ITO [1997] 226 ITR 475 (All), where the tax paid under Section 140A was not considered an ad hoc payment but a binding liability unless a revised return was filed. The court concluded that the petitioner was not entitled to a refund since the return filed was an admission of liability, and no excess tax was claimed to have been paid. 2. Consequence of Non-completion of Assessment within the Statutory Period under Section 153 of the Income-tax Act, 1961: The petitioner argued that the failure to complete the assessment within the stipulated period rendered the tax paid refundable. However, the court noted that Section 153(1)(a)(iii) does not specify any consequences for the authorities' failure to complete the assessment within the time frame. The court acknowledged the practical difficulties and hardships that taxpayers might face due to the absence of an assessment order and suggested that this issue might warrant the attention of the Government of India and legislative bodies. However, the court held that it was beyond its domain to address this legislative gap. Conclusion: The court rejected the writ petition, holding that the petitioner was not entitled to a refund of the tax paid based on the non-completion of the assessment within the statutory period. The court emphasized that the return filed by the petitioner was an admission of liability, and no excess tax was claimed to have been paid. The court made no order as to costs and directed that any security amount deposited be refunded.
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