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2023 (2) TMI 924 - HC - Income TaxRefund of pre-deposit - ITAT on 21.10.2014 passed remand order - the authorities were required to pass fresh assessment by 31.03.2017 - But, order was not passed by that time - writ petition claiming refund after deduction of tax liability on the admitted depreciation disallowance - HELD THAT - The issue is no more res integra. This Hon'ble Court in Deep Chand Jain 1983 (8) TMI 52 - PUNJAB AND HARYANA HIGH COURT wherein as entirely concur in the view taken by Chandrakantaraj Urs, J. in R. Gopal Ramnaryan's case 1980 (6) TMI 23 - KARNATAKA HIGH COURT to the effect that until and unless the quantum of tax is determined in accordance with the procedure laid down by law, the revenue has no right to collect the tax, and, if tax, by way of advance tax or on self-assessment or having been deducted at source, has been paid by the petitioner, the same cannot be retained contrary to the requirements of article of the Constitution. In the present case, admittedly, no assessment order has been passed nor any assessment order could be passed, the same having been barred by the provisions of Section 153(1)(a)(iii). Said view has further been followed by Division Bench of this Court in the case of Bharti Engineering Corporation vs. Union of India 2006 (5) TMI 52 - PUNJAB AND HARYANA HIGH COURT Resultantly in light of the consistent view of this Court, the present writ petition is allowed. Respondents are directed to refund the excess amount deposited by the petitioner after deducting tax liability qua depreciation disallowance which stands admitted by the petitioner before Tribunal within 30 days from the date of receipt of certified copy of this order. The petitioner will also be entitled to statutory interest on such amount to be calculated for period starting from 01.04.2017 till the date of actual payment.
Issues:
1. Refund of amount deposited by the petitioner in compliance with ITAT's condition. 2. Time limit for passing fresh assessment order and entitlement to retain the deposited amount. 3. Interpretation of Section 153(1)(a)(iii) of the Income Tax Act. 4. Applicability of legal precedents on tax refund and retention of deposited amount. Issue 1: Refund of amount deposited by the petitioner The petitioner filed a writ petition under Article 226 seeking directions for a refund of the amount deposited in compliance with the condition imposed by the Income Tax Appellate Tribunal (ITAT). The petitioner claimed a refund of Rs. 10 crore after conceding to a depreciation disallowance of Rs. 33,91,637. The ITAT remanded the matter back for fresh assessment, and the petitioner sought the refund as the assessment proceedings had become time-barred. Issue 2: Time limit for passing fresh assessment order The time limit for passing the assessment order expired on 31.03.2017. The respondent admitted in their reply that no order had been passed within the stipulated time frame. The question arose whether the authorities were entitled to retain the amount deposited by the petitioner after the expiry of the time limit for passing the fresh assessment order. Issue 3: Interpretation of Section 153(1)(a)(iii) The Court referred to Section 153(1)(a)(iii) of the Income Tax Act, which specifies the time limit for making an assessment order. The Court held that if no assessment order is passed within the prescribed time frame, the revenue has no right to collect tax, and any amount collected must be refunded to the assessee. The petitioner was found not liable to pay any tax due to the expiry of the assessment period. Issue 4: Applicability of legal precedents The Court cited the case of Deep Chand Jain vs. ITO and the Division Bench's decision in Bharti Engineering Corporation vs. Union of India to support the view that the revenue cannot retain tax amounts collected without a valid assessment order. Relying on these precedents, the Court allowed the writ petition, directing the respondents to refund the excess amount deposited by the petitioner within 30 days, along with statutory interest from 01.04.2017 until the date of payment. This comprehensive analysis of the judgment highlights the issues involved, the legal interpretations made by the Court, and the application of relevant legal precedents in deciding the case.
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