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2019 (9) TMI 869 - HC - Income TaxWithhold the refund due to the Petitioner u/s 241A - neither the original or the revised return of income has been processed under Section 143(1) - HELD THAT - Section 241A of the Act empowers the Assessing Officer to withhold the refund which has become due for reasons stated therein, this only after determining the refund due under Section 143(1) of the Act. It is an undisputed position before us that neither the regular return of income dated 30 November 2017 nor the revised return of income dated 27 March 2019 for the subject Assessment Year has been processed under Section 143(1) of the Act till date. Consequently, the occasion to withhold any refund under Section 241A of the Act at this stage does not arise. Therefore, on the admitted facts the application/invocation of Section 241A of the Act is premature. In view of the admitted position that neither the original or the revised return of income for the Assessment Year 2017-18 has been processed under Section 143(1) of the Act, invoking of Section 241A of the Act would be without authority of law. Thus, the impugned show cause notice dated 14 November 2018 is quashed and set aside not only on the above ground but also as the affidavit in reply states that the original return of income stands abandoned, on filing of revised return of income. The impugned notice is in pursuance of the original return of income filed on 30 November 20917. Similarly, the communication dated 18 July 2019 addressed by the Office of Respondent No.3 Principal Commissioner of Income Tax to the Deputy Commissioner of Income Tax - Assessing Officer approving to the proposal to withhold the refund due for the Assessment Year 2017-18 under Section 143(1) of the Act is also without jurisdiction. This as the refund due has admittedly not been determined under Section 143(1) of the Act. Therefore, quashed and set aside.
Issues:
- Processing of revised return for Assessment Year 2017-18 - Withholding of refund under Section 241A of the Income Tax Act, 1961 - Validity of notices issued by the Principal Commissioner of Income Tax Analysis: Issue 1: Processing of revised return for Assessment Year 2017-18 The petitioner filed a revised return of income on 27 March 2019 for the Assessment Year 2017-18, seeking a refund of ?72.16 crores. Despite multiple representations, the revised return was not processed under Section 143(1) of the Income Tax Act. The respondent Assessing Officer argued that the original return filed in November 2017 was abandoned upon filing the revised return in March 2019. The High Court held that the revised return should be processed, and the respondent committed to doing so within eight weeks. Issue 2: Withholding of refund under Section 241A of the Income Tax Act, 1961 The Principal Commissioner of Income Tax issued a notice on 14 November 2018 to withhold the refund for the Assessment Year 2017-18 under Section 241A of the Act. However, Section 241A allows withholding of refund only after determining the refund due under Section 143(1) of the Act. Since neither the original nor the revised return had been processed under Section 143(1), the invocation of Section 241A was premature. The High Court quashed the notice and the subsequent communication approving the withholding of the refund. Issue 3: Validity of notices issued by the Principal Commissioner of Income Tax The High Court found that the notices issued by the Principal Commissioner of Income Tax were without jurisdiction as the refund due had not been determined under Section 143(1) of the Act. Therefore, the notices were quashed and set aside. The respondent committed to processing the revised return within a specified timeframe, leading to the disposal of the petition without any costs being awarded. In conclusion, the High Court directed the processing of the petitioner's revised return for the Assessment Year 2017-18 and invalidated the notices seeking to withhold the refund under Section 241A of the Income Tax Act, emphasizing the necessity of determining the refund due under Section 143(1) before invoking Section 241A.
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