2011 (1) TMI 1170 - HC - Income Tax

TDS - refund of taxes deposited at source and to further direct the respondents to pay the interest thereon in terms of s. 244A of the Act on the refund amount - petitioner filed a revision before the 1st respondent during November 2003 seeking revision of the assessment order and the said revision petition came to be rejected, which the petitioner is challenging stating that the said order is nan est and refund lies and the effect of the amendment to s. 143(1) of the Act comes into effect only from the subsequent year and not for the assessment year Held that - as per s. 143 of the Act, for the refund, petitioner has to approach the assessing authority by filing revised returns though it is belated, as the time is lost by initiating proceedings in revision under the confusion that a revision lies against the said order. The petitioner himself is at fault in seeking revision and there is no fault of the Department in accepting such returns filed and the intimation sent, prayer of the petitioner to direct the 1st respondent to reconsider the returns filed by him or for refund of the amount cannot be granted, since there is no wrong assessing and the revision filed by the petitioner before the CIT itself is not maintainable, AO of the respondent authority directed to consider the application of the petitioner for refund of the amount which was deducted at source by the employer and remitted to be Revenue in accordance with law, writ petition is disposed of

Summary

Issues:
1. Entitlement to refund of taxes deposited at source based on TDS certificate.
2. Validity of revision petition filed under section 264 of the Income Tax Act.
3. Interpretation of the amendment to section 143(5) of the Act.
4. Jurisdiction to seek revision of self-assessment for refund.

Entitlement to Refund of Taxes Deposited at Source:
The petitioner sought a writ to quash an order by the CIT and to direct refund of taxes deposited at source, claiming that the TDS deducted by the employer on shares allotted should be refunded as they were not perks. The petitioner argued that as per court judgments, the TDS deducted on shares was refundable, and the revision by the CIT should have been entertained. However, the respondent contended that the self-assessment had been accepted, and any revision for refund should be sought before the assessing authority. The court considered the deletion of Explanation to section 143 and whether it applies to the assessment or financial year.

Validity of Revision Petition under Section 264:
The petitioner challenged the rejection of the revision petition seeking refund, arguing that the revision should have been entertained based on court decisions stating that the TDS deducted on shares was not perks. The respondent argued that directly approaching the CIT for revision was not maintainable, and any refund application should be filed before the assessing authority. The court analyzed the implications of the deletion of Explanation to section 143 and its effect on revision petitions.

Interpretation of Amendment to Section 143(5) of the Act:
The court considered whether the omission of the Explanation to section 143(5) should be applied based on the assessment year or financial year. Referring to previous judgments, the court discussed the relevance of the amendment to the assessment year and the implications of the deletion of the Explanation. The court emphasized the need for the petitioner to approach the assessing authority for refund based on the Tribunal's findings.

Jurisdiction to Seek Revision of Self-Assessment for Refund:
The court clarified that the petitioner should pursue the assessing authority for refund based on the Tribunal's decision that no tax should be deducted on shares until the lock-in period expires. Emphasizing that the revision filed by the petitioner was not maintainable, the court directed the petitioner to file revised returns with the assessing authority for refund, with the possibility of condoning any delays. The court disposed of the writ petition, granting liberty to the petitioner to approach the assessing authority for refund based on revised returns.