2018 (1) TMI 399 - HC - Income Tax

Refund of excess income tax paid by the petitioner - Held that - The notice dated 12.01.2017, is premature, since there is nothing on record to state that the refund claim made by the petitioner has crystallized into an order of refund. Thus, the impugned notice has virtually prejudged the matter and could not have been issued before a decision has been taken by the first respondent on the petitioner s request for refund. Thus the notice dated 12.01.2017, issued by the second respondent is held to be unenforceable as it is premature, giving liberty to the second respondent to initiate fresh proceedings after an order is passed by the first respondent on the petitioner s representation for refund dated 20.01.2017. The first respondent is directed to consider the representation of the petitioner dated 20.01.2017, within a period of six weeks from the date of receipt of a copy of this order, after affording an opportunity of personal hearing to the petitioner s authorized representative.

Summary

Issues:
1. Premature notice issued under Section 226(3) of the Income Tax Act, 1961.
2. Claim for refund of excise income tax for assessment years 2012-13, 2013-14, and 2014-15.
3. Justification of the claim for refund.
4. Consideration of petitioner's representation by the first respondent.
5. Enforceability of the notice issued by the second respondent.
6. Direction for the first respondent to consider the petitioner's representation.

Analysis:
The petitioner filed two writ petitions seeking relief against the first respondent's actions. In the first petition, the petitioner sought to restrain the first respondent from further proceedings based on a notice issued under Section 226(3) of the Income Tax Act, 1961. The second petition requested a direction for the first respondent to review the petitioner's representation dated 20.01.2017, regarding a refund of excise income tax paid for specific assessment years. The representation highlighted the justification for the refund claim, emphasizing its validity. The first respondent had not yet decided on the refund request, which was still pending at the time of the petitions.

The second respondent, the assessing officer of a company, issued a notice claiming a substantial amount as income tax due for certain assessment years and demanded payment from the petitioner. The counter affidavit did not contest the pending refund consideration but justified the notice as necessary for national interest in recovering statutory dues. However, the court found the notice premature as it pre-judged the matter before a decision on the refund claim was made by the first respondent.

Consequently, the court deemed the notice unenforceable due to its premature nature. It granted the second respondent the liberty to initiate fresh proceedings after the first respondent's decision on the refund representation. The court directed the first respondent to review the petitioner's representation within six weeks from the date of the order, providing an opportunity for a personal hearing to the petitioner's authorized representative. The writ petitions were disposed of with no costs, and the connected miscellaneous petition was closed as well.