2017 (12) TMI 1808 - HC - Income Tax

Refund of the TDS amount with admissible interest - HELD THAT - As relying on case of S. Thiagarajan's case 2009 (8) TMI 531 - KARNATAKA HIGH COURT Though the learned Standing Counsel for the Revenue contends that the said decision is not applicable to the facts of the present case, we are not able to take a contra view. In the said case, the Karnataka High Court has categorically held that it is an obligation cast on the Revenue to effect the refund, without calling upon the assessees to apply for refund the claim. The learned Standing Counsel is not in a position to state as to whether the order of the order of the Karnataka High Court has been reversed by the Division Bench or the Hon'ble Supreme Court and, moreover, he is not contra view. Moreover, the contention of the learned Standing Counsel that the Chief Commissioner has no power to condone the delay sustained in view of the decision of the Hon'ble Supreme Court in the earlier round of litigation. Thus, following the above decision, these writ petitions are allowed, the impugned orders are set aside and the respondents are directed to refund the amount to the petitioner/assessee with interest payable as per the provisions of the Income-tax Act within a period of eight weeks from the date of receipt of a copy of this order.

Summary

Issues:
Challenging order under Section 119(2)(b) of the Income-tax Act, 1961 for non-constituted revised return. Condonation of delay in filing revised return for assessment year 1998-99. Refund of TDS amount with interest. Applicability of Karnataka High Court decision in S. Thiagarajan's case.

Analysis:
The judgment dealt with multiple issues arising from challenges to orders under the Income-tax Act, 1961. The petitioner challenged an order dated 26.10.2009 under Section 119(2)(b) of the Act, where the return filed was deemed a non-constituted revised return under Section 139(5). The Commissioner upheld the view that it was an invalid return. Another challenge was against an order rejecting a petition for condonation of delay in filing the revised return for the assessment year 1998-99. These challenges were part of a batch of writ petitions involving employees of Infosys Technology Limited.

In a related case concerning an employee named Mr. S. Vasudevan, the Division Bench dismissed the appeal filed by the revenue, following a previous judgment related to employees covered under the Employees Stock Option Scheme. The issue revolved around the refund of TDS amount with interest, with the employees seeking relief based on the Karnataka High Court decision in S. Thiagarajan's case. The judgment highlighted the obligation of the Revenue to effect the refund without requiring the assessee to apply for it, as per the Karnataka High Court decision.

The learned single Judge allowed the writ petitions, citing the Karnataka High Court decision. The Revenue's contention that the decision was not applicable was not accepted, emphasizing the obligation on the Revenue to refund without the need for the assessee to apply. The judgment directed the respondents to refund the amount to the petitioner/assessee with interest as per the provisions of the Income-tax Act within eight weeks from the date of the order, with no costs imposed. The decision was based on the principles established in the Karnataka High Court case and upheld the right to refund the TDS amount with interest.