2023 (8) TMI 1083 - HC - Income Tax

Refund claim - Whether the amendments made to the Income Tax Act, 1961 and the circular issued regulating the period in which a Refund Application is to be filed would result in the frustration of the claim of refund made by the assessee? - HELD THAT - Section 200A speaks of processing of statements of tax deducted at source. If, as submitted by the Revenue, Section 200A is not applicable to the relevant year, there is nothing preventing the Assessing Officer from processing the statement filed under Section 200 and allowing the refund; on a request made by the assessee. The very procedure for processing of statement of tax deducted at source and an intimation along with a refund, without even a claim from the assessee is brought in under Section 200A. In that circumstance, the amounts capable of being refunded could also be adjusted as against the demand raised, which is far lesser. As sub-rule (3A) of Rule 31A - admittedly, the same was brought in only on 19.02.2013 along with Form 26B. The assessee even now is ready to file an application under Form 26B; however, the department asserts that such an application cannot be filed without first satisfying the demand made under Annexure-7 series. The assessee on the other hand submits that when far more amounts are due from the department to the assessee, the department could enable filing of Form 26B so that the refund can be processed and the demands set off along with any interest payable to the department from the refunded amounts. The only rider would be in so far as the department also being made liable to pay the interest due on the refund. Annexure-B is a circular issued by the Board which as has been declared in the cited decisions is not binding on this Court or even the assessee. There can be no prescription of a limitation period in the circular, which is not available in the statute or the rules framed thereunder. The entire problem could be resolved if the department avails of the provision under Section 245 of the Income Tax Act. Having found that there is no limitation for making a claim of refund; even now the assessee could make an application and when the refund is processed there can be a set off made of the amounts remaining due from the assessee for the various assessment years, from the amounts directed to be refunded. On the above reasoning, we direct the department to either enable filing of Form 26B or in the alternative permit the assessee to make a claim for refund in the physical mode which shall be considered on the basis of the statement made under Section 200 regarding the tax deducted at source. The refund being processed and permitted, the department should set off the amounts due as evident from the demand raised for the various assessment years from 2007-08 to 2021-22 as per Annexure-7 series.

Summary

Issues involved:
The judgment deals with the applicability of amendments to the Income Tax Act and circulars issued regarding the filing of refund applications, specifically in relation to a demand made for various years and a refund for a specific Assessment Year.

Details of the Judgment:

Issue 1: Applicability of Amendments and Circulars
The primary question raised in the writ petition was whether the amendments to the Income Tax Act and the circular regulating the period for filing a Refund Application would frustrate the claim of refund made by the assessee. The petitioner argued that the circular prescribing a specific time to file a refund application was in contravention of the statutory provision. The court analyzed the provisions of Section 200A of the Income Tax Act, which outlines the processing of statements of tax deducted at source and the time limit for sending intimation. The court held that if Section 200A is not applicable, the Assessing Officer can process the statement filed under Section 200 and allow the refund upon request by the assessee, without being hindered by the limitation on sending intimation. The court emphasized that the circular issued by the Board is not binding and cannot prescribe a limitation period not found in the statute or rules.

Issue 2: Filing of Refund Application and Set-Off
The court directed the department to either enable the filing of Form 26B or allow the assessee to make a claim for refund in the physical mode. Upon processing the refund, the department should set off the amounts due from the assessee for various assessment years against the refunded amounts. The court highlighted that there is no limitation for making a claim of refund and emphasized the importance of utilizing the provision under Section 245 of the Income Tax Act to resolve the issue effectively.

Separate Judgment:
The judgment was delivered by Honourable the Chief Justice.