2015 (4) TMI 868 - HC - Income Tax

Applications for refund - period of limitation - Held that - On consideration of Section 119(2)(b) of the said Act it is of the opinion that directions of the Board may be given in case of delayed application for refund. On the submission of Mr. Poddar, learned senior advocate for the petitioner, it does not appear that applications for refund are time barred. The original application for refund is dated 31st August 2007 followed by reminders. The assessment year was 2006-2007. A claim for refund had to be made before 31st March 2008. The application for refund dated 31st August 2007, it seems to me, was well within time. One would get a situation when at the point of time fringe benefit tax was paid by the writ petitioner, they were not liable to pay such tax or to file such return. Therefore, this amount of ₹ 22 crores and odd can be said to be money paid under a mistake by the writ petitioner, not under any provision of the Act. If money has been received by the government on a mistake committed by the assessee it is liable to refund the sum. While making such refund it should not take recourse to unnecessary procedural formalities. Such seems to be also the view of the Supreme Court in Director of Income-tax (International Taxation) vs. Reliance Infocomm Ltd. reported in (2014 (3) TMI 610 - SUPREME COURT) and in Sandvik Asia Ltd. vs. Commissioner of Incometax reported in (2006 (1) TMI 55 - SUPREME Court . Thus direct the respondent authorities to treat the application as the application for refund and to process the same in accordance with law so that the refund amount along with accrued interest thereon is paid to the writ petitioner by 31st December 2014.

Summary

Issues Involved:
1. Fringe benefit tax refund under Section 115WJ of the Income Tax Act, 1961 for the assessment year 2006-2007.
2. Dispute regarding the procedure for refund.
3. Interpretation of Section 119(2)(b) of the Income Tax Act.
4. Consideration of refund application timelines.
5. Refund due to payment made under a mistake by the assessee.
6. Application of Supreme Court judgments in similar cases.

Analysis:

1. The case involved a petition for a refund of fringe benefit tax paid in advance by the petitioner under Section 115WJ of the Income Tax Act for the assessment year 2006-2007, amounting to Rs. 22,12,04,513.

2. The main dispute between the parties revolved around the procedure for granting the refund. The Revenue contended that the refund could only be made by the Central Board of Direct Taxes under Section 119(2)(b) of the Act, not through the existing application for refund based on a revised return of income.

3. Upon considering Section 119(2)(b) of the Act, the court opined that directions of the Board could be given in cases of delayed refund applications. It was noted that the original application for refund, dated 31st August 2007, was within the timeline for claiming a refund for the assessment year 2006-2007.

4. The court also addressed the retrospective registration of the petitioner under Section 12AA of the Income Tax Act. It highlighted that at the time the fringe benefit tax was paid, the petitioner was not liable to pay such tax, indicating that the amount paid was a mistake. In such cases, where the government receives money due to an assessee's mistake, it is obligated to refund the sum without unnecessary procedural formalities.

5. The court cited judgments from the Supreme Court, such as Director of Income-tax vs. Reliance Infocomm Ltd. and Sandvik Asia Ltd. vs. Commissioner of Incometax, to support its decision that refunds in cases of mistaken payments should be processed without undue delays or formalities.

6. Consequently, the court directed the respondent authorities to treat the specified application as the refund request and process it in compliance with the law. The court ordered the refund amount, along with accrued interest, to be paid to the petitioner by a specified deadline, emphasizing the need to adhere to the Supreme Court decisions and the observations made in the judgment. The writ application was disposed of accordingly, with the provision for supplying a certified copy of the order to the parties upon request and compliance with formalities.