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2023 (2) TMI 224 - HC - Income TaxRefund of TDS - applications for condonation of delay in filing returns claiming refund - ACIT (TDS) Jurisdiction to pass the order - Deduction of TDS in the name of their contractors/sub-contractors - Whether the contractors/ sub-contractors have availed of its credit in their tax returns? - HELD THAT - Circular No.9/2015 dated 9.6.2015 issued by the Income Tax Department itself, it clearly transpires that it was in supersession of all earlier Instructions /Circulars/Guidelines issued by the Central Board of Direct Taxes (the Board) from time to time dealing with the applications for condonation of delay in filing returns claiming refund. Thus, the reliance of Circular No. 2 of 2011 dated 27.04.2011 by the counsel for the revenue had lost its force on issuance of the Circular No. 9/2015 on the subject. Further, in the Circular No.9/2015, pecuniary limit is specifically indicated in clause No.2 wherein it is specifically stated that the application/claims for amount exceeding Rs.50 lakhs shall be considered by the Board. Principal Commissioners of Income Tax/Commissioners of Income-tax shall be vested with the powers of acceptance/rejection of such applications/claims if the amount of such claims is not more than Rs.10 lakhs for any one assessment year and the Principal Chief Commissioners of Income- tax/Chief Commissioners of Income-tax shall be vested with the powers of acceptance/rejection of such application/claims if the amount of such claims exceeds of Rs.10 lakhs but is not more than Rs.50 lakhs for any one assessment year. Looking to the pecuniary jurisdiction, it clearly transpires that the Assessing Officer who was ACIT (TDS); who passed the impugned order of rejection was not having any pecuniary jurisdiction. Further, the letter dated 10.12.2020 by which the Principal Chief Commissioner of Income Tax, New Delhi has referred the matter to the Principal Chief Commissioner of Income Tax, Bihar Jharkhand, Patna cannot be ignored, inasmuch as, the competent authority to pass the refund order was CBDT and it is only due to this reason the Principal Chief Commissioner of Income Tax, New Delhi has referred the matter to the Principal Chief Commissioner of Income Tax, Bihar Jharkhand, Patna; as it fell within territorial jurisdiction to process the application. It is but obvious that to pass any order by the Board, they will require the documents. Thereafter, this Court is of the firm opinion that in order to pass a final order as per Circular No.9/2015, the Board was the Competent Authority. In any view of the matter, the ACIT (TDS) who passed the impugned order was having no jurisdiction in view of the pecuniary limit fixed vide Circular No.9/2015. At the cost of repetition, it is stated that the Circular No.9/2015 was in supersession of all earlier Instructions/Circulars/Guidelines issued by the Central Board of Direct Taxes from time-to-time to deal with the applications for condonation of delay in filing returns claiming refund. The reasons recorded the impugned order is quashed on the point of lack of jurisdiction and the case of the petitioner is remitted to the Board to pass a fresh order of refund in accordance with law. Consequently, the order / communication dated 09.12.2020, passed by Respondent No.2, is hereby, quashed and set aside. The matter is remitted to Central Board of Direct Taxes (CBDT), to pass an order on the claim of Refund after going through the relevant documents of the Case also taking in consideration the show-cause Notice dated 15.04.2009 issued by the Revenue which according to the petitioner remained unadjudicated.
Issues Involved:
1. Jurisdiction of Respondent No. 2 to decide the refund application. 2. Consistency of the rejection of the refund application with the notice dated 10.12.2020. 3. Limitation period for claiming the refund. 4. Compliance with Article 265 of the Constitution of India. 5. Applicability of Circular No. 9/2015 and Circular No. 2/2011. Issue-wise Detailed Analysis: 1. Jurisdiction of Respondent No. 2 to Decide the Refund Application: The petitioner argued that Respondent No. 2 lacked jurisdiction to decide the refund application, as per the Income Tax Act and relevant circulars. The court examined Circular No. 9/2015, which superseded earlier instructions and guidelines, including Circular No. 2/2011. It was noted that Circular No. 9/2015 vested the power to accept or reject refund applications exceeding Rs. 50 lakhs with the Central Board of Direct Taxes (CBDT). Since the refund amount in question was Rs. 14.95 crores, the ACIT (TDS), who passed the impugned order, did not have the pecuniary jurisdiction to decide the matter. 2. Consistency of the Rejection of the Refund Application with the Notice Dated 10.12.2020: The petitioner contended that the rejection of the refund application was inconsistent with the notice dated 10.12.2020 from the Principal Chief Commissioner of Income Tax, New Delhi. The court clarified that the notice dated 10.12.2020 merely forwarded the refund application to the Principal Chief Commissioner of Income Tax, Bihar & Jharkhand, for territorial jurisdiction. It did not imply that Respondent No. 2 lacked jurisdiction to decide the refund application. However, the ultimate authority to pass the refund order lay with the CBDT due to the pecuniary limits specified in Circular No. 9/2015. 3. Limitation Period for Claiming the Refund: Respondent No. 2 rejected the refund application on the grounds of being time-barred under Circular No. 2/2011, which stipulated a two-year limitation period from the end of the financial year in which tax was deductible. The court observed that Circular No. 9/2015, which superseded Circular No. 2/2011, allowed for condonation of delay in filing returns claiming refunds up to six years from the end of the assessment year. Therefore, the rejection based on the limitation period under Circular No. 2/2011 was not applicable. 4. Compliance with Article 265 of the Constitution of India: The petitioner argued that the tax collected without authority of law, as per Article 265 of the Constitution, must be refunded. The court concurred, emphasizing that any tax collected without legal basis should be returned to the taxpayer. The petitioner had deposited the TDS amount under coercion without any actual liability, and thus, the refund claim was valid under Article 265. 5. Applicability of Circular No. 9/2015 and Circular No. 2/2011: The court noted that Circular No. 9/2015, which provided comprehensive guidelines for condonation of delay in filing returns claiming refunds, superseded Circular No. 2/2011. The pecuniary limits and the authority to decide refund applications were clearly outlined in Circular No. 9/2015. Therefore, the reliance on Circular No. 2/2011 by the respondents was misplaced, and the refund application should be considered under the provisions of Circular No. 9/2015. Conclusion: The court quashed the impugned order dated 09.12.2020 passed by Respondent No. 2 due to lack of jurisdiction and remitted the case to the CBDT to pass a fresh order on the refund application in accordance with law. The court directed Respondent No. 1 to forward all relevant documents to the competent authority of the Board, which should complete the exercise within twelve weeks. If the refund claim is allowed, the admissible amount should be refunded with statutory interest within four weeks thereafter. The writ application was allowed with these directions.
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