2012 (11) TMI 515 - HC - Income Tax

Refund of TDS - denial of claim on no TDS certificates were enclosed - Held that - The return of income was filed beyond the time limit prescribed by Section 139(1) and even Section 139(4). Moreover, the petitioner has not enclosed the original TDS certificates along with the return of income and this is evident from the fact that in the column showing the enclosures to the return of income, the petitioner has not mentioned that any original TDS certificates were enclosed. Therefore, there is no acceptable evidence for the tax deducted at source. It would be contrary to law to grant refunds on the basis of the photocopies of the certificates without the originals being produced for verification or filed. The reason advanced by the petitioner for the delay in filing the return of income that one Bhai Mohan Singh, the treasurer of the petitioner, who signed the belated return of income was out of the country is not found correct as the Form No.10, which was annexed to the return of income was dated 30.10.1998 and was signed by the treasurer himself. He had also signed the audited accounts attached to the return and these accounts were signed on 21.05.1999; therefore the reasons for the delay in filing the return of income were found to be factually incorrect. As regards the reasons given by the petitioner in its application dated 21.12.2006 ere was no supporting evidence to show that because of the differences in the family the concerned files and records could not be traced - against assessee.

Issues:
1. Refusal to refund tax deducted at source to a charitable organization.
2. Delay in filing the return of income and claiming the refund.
3. Non-enclosure of original TDS certificates with the return of income.
4. Legal provisions governing the refund of taxes and assessment procedures.

Analysis:

Issue 1: Refusal to refund tax deducted at source to a charitable organization
The petitioner, a charitable organization, sought a refund of tax deducted at source (TDS) for the assessment year 1998-99. Despite multiple representations and explanations of genuine financial hardship, the Director of Income Tax refused to refund the amount. The petitioner contended that the refusal impeded its charitable activities, emphasizing its philanthropic nature. The revenue department argued that the return was filed beyond the prescribed time limits, rendering it non est, and no processing or assessment under the Income Tax Act could be conducted. The court noted the absence of provisions for granting refunds without due processing or assessment, ultimately upholding the respondent's decision to deny the refund.

Issue 2: Delay in filing the return of income and claiming the refund
The petitioner filed the return of income for the relevant year on 10.10.2000, beyond the deadlines set by Section 139(1) and Section 139(4) of the Act. The court highlighted that refunds are typically granted post-processing under Section 143(1) or assessment under Section 143(3), neither of which occurred due to the delayed filing. The petitioner's explanations for the delay, including issues within the family and the treasurer's absence, were deemed insufficient and inconsistent by the respondent, justifying the denial of condonation for the delay.

Issue 3: Non-enclosure of original TDS certificates with the return of income
Critical to the case was the non-enclosure of original TDS certificates with the return of income. The petitioner failed to provide concrete evidence of tax deducted at source, submitting only photocopies of Form No.16A. The respondent rightly emphasized the necessity of original certificates for verification, highlighting the insufficiency of photocopies. Bank certificates provided by the petitioner lacked crucial details to establish the deposit's credit, further weakening the petitioner's case for a refund.

Issue 4: Legal provisions governing the refund of taxes and assessment procedures
The court underscored the legal framework governing tax refunds, emphasizing the necessity of due processing or assessment for refunds to be granted. The absence of original TDS certificates and insufficient evidence of tax deposits hindered the petitioner's claim. Despite the petitioner's arguments of financial hardship and charitable activities, the court upheld the respondent's decision, citing procedural non-compliance and lack of concrete evidence as justifications for denying the refund.

In conclusion, the court dismissed the writ petition, ruling in favor of the respondent and emphasizing the importance of adhering to legal procedures and evidentiary requirements in tax-related matters.

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