2015 (7) TMI 1306 - HC - Income Tax

Refund of TDS - reopening of assessment - process of issue of refund has been initiated on receipt of TDS verification from the Land Acquisition Officer - rectification order under Section 154 - Held that - The right to refund, therefore, in each of the matters is established. The respondents, however, have initiated proceedings for reassessment under Sections 147 and 148 of the Act in respect of the same assessment year. The respondents are entitled to set off the refund against any amounts that may be payable pursuant to these proceedings. It will, however, be unfair to withhold the refund indefinitely. The ends of justice would be served by directing the respondents to complete reassessment proceedings by 31.08.2015. In the event of there remaining any refund payable to the petitioners, the same be shall be paid within four weeks of the conclusion of the reassessment proceedings. It is clarified that all other issues including regarding the quantum of interest are kept open.

Summary

Issues:
Refund sought for assessment year 2011-2012; Initiation of refund process; Reassessment proceedings under Sections 147 and 148 of the Income Tax Act; Set off of refund against payable amounts; Timely completion of reassessment proceedings.

Analysis:

The petitioners in the case sought refunds totaling &8377; 32 lacs, &8377; 4 lacs, and &8377; 5 lacs for the assessment year 2011-2012. The written statement confirmed the initiation of the refund process upon receiving TDS verification from the Land Acquisition Officer. It was assured that the refund would be issued after the necessary approvals, including a rectification order under Section 154 of the Income Tax Act, 1961. The right to refund was established, but the respondents had initiated reassessment proceedings under Sections 147 and 148 of the Act for the same assessment year.

The court acknowledged the respondents' entitlement to set off the refund against any amounts payable due to the reassessment proceedings. However, it was deemed unfair to withhold the refund indefinitely. To serve the ends of justice, the court directed the respondents to complete the reassessment proceedings by a specified date, 31.08.2015. If any refund remained payable to the petitioners after the conclusion of reassessment, it was ordered to be paid within four weeks. Importantly, the judgment clarified that other issues, including the quantum of interest, were left open for further consideration.

In conclusion, the writ petitions were disposed of based on the court's directions for the timely completion of reassessment proceedings and the payment of any remaining refunds to the petitioners within a specified timeframe.