2019 (9) TMI 316 - HC - Income Tax

Condonation application for claim of refund / loss - Claim for refund of TDS on exempted disability pension along with interest - petitioner's contention is that he suffered a war disability, and finally, an order was passed by the Armed Forces Tribunal, Principal Bench, New Delh holding that the petitioner is entitled for disability pension - HELD THAT - There is a power with the Central Board of Direct Taxes to condone the delay. There appears to be no justification in forcing the petitioner to file an application before Central Board of Direct Taxes. Once the power is there and it was not the petitioner, who was at fault in the matter, this Court, in the peculiar facts and circumstances of the case, is of the considered opinion that the delay can be condoned by this Court also, and therefore, the delay in filing the application for refund of tax is hereby condoned. It is not a case where the assessee was sleeping over his right, it is a case where the assessee was fighting with the department for his legitimate right of grant of disability pension, as he was disabled officer and his original application was allowed only on 03.08.2017 and the order was passed by the Ministry of Defence on 17.11.2017 granting him disability pension w.e.f. 01.01.2006 and with quite promptitude he has submitted an application for refund of tax. As this Court has already condoned the delay, the respondent is directed to process the claim of the petitioner and to grant a refund for which he is lawfully entitled within a period of sixty days from the date of receipt of certified copy of this order. In the matter of grant of interest, the CBDT circular will not come in way of the petitioner, as the petitioner is not at fault in the matter. The respondent shall also pay the interest in respect of the entire amount right from 2007 08 to 2015 16, as the statute i.e. Income Tax Act, 1961 does not debar an assessee, keeping in view the peculiar facts and circumstances of the case, for grant of interest.

Summary

Issues:
1. Refund of TDS on exempted disability pension along with interest.

Analysis:
The petitioner, a retired Colonel of the Indian Army, filed a petition against the Income Tax Department's order rejecting his claim for a refund of TDS on exempted disability pension along with interest. The petitioner claimed he suffered a war disability, and the Armed Forces Tribunal and Ministry of Defence confirmed his entitlement to disability pension. The Income Tax Department partially allowed the refund for certain years but rejected it for others beyond a six-year delay limit. The petitioner filed another application requesting the delay be condoned and interest be granted on the refund for all relevant years. The Income Tax Department cited statutory provisions under Section 119(2)(b) of the Income Tax Act, 1961, stating that the delay could only be condoned by the Central Board of Direct Taxes.

The High Court noted the petitioner's decorated service and his struggle to obtain disability pension, first against the Ministry of Defence and now against the Income Tax Department. It acknowledged the undisputed entitlement of the petitioner to disability pension and the technicalities hindering the refund process. The Court examined Section 119 of the Income Tax Act, emphasizing the power of the Central Board of Direct Taxes to condone delays beyond six years. The Court opined that it could also condone the delay in this case, given the circumstances where the petitioner promptly applied for the refund after the disability pension was confirmed.

The Court referenced a previous judgment involving a disabled Army Officer, highlighting the need to prioritize justice over administrative technicalities for armed forces personnel. It expressed concerns about unnecessary hurdles faced by war heroes in obtaining legitimate relief due to administrative procedures. The Court, while upholding the rule of law, emphasized the welfare of armed forces personnel and directed the Income Tax Department to process the petitioner's claim and grant the refund within sixty days. Additionally, the Court ordered the payment of interest on the entire refund amount from 2007-08 to 2015-16, considering the peculiar facts of the case and the petitioner's lack of fault.

In conclusion, the High Court allowed the writ petition, directing the Income Tax Department to process the refund claim and grant the petitioner the entitled refund within sixty days. The Court also mandated the payment of interest on the refund amount for the relevant years, emphasizing the petitioner's rightful entitlement and the need to prioritize justice for armed forces personnel.