2024 (3) TMI 150 - HC - Income Tax

Application filed by the petitioner u/s 119(2)(b) - condonation of delay in filing the return for claiming refund rejected - rejection of revised return and the rejection of the claim of the petitioner for refund of tax deducted at source - AO jurisdiction over a case to entertain a refund claim and dispose of the same - HELD THAT - A plain reading of the Circular dated 30.10.2003 would give a clear indication that the authorities concerned vide the said Circular had relaxed and modified the conditions stipulated in the previous Circular dated 12.10.1993 both in respect of the upper limit so far as claim of refund amount is concerned and also as regards the aspect whether it was in the form of a supplementary additional claim or not. In view of the fact that the Circular dated 30.10.2003 was already in force when the impugned order was passed, we find it difficult to accept the contention of respondent No.1. The claim of the petitioner for refund of TDS was for an amount of Rs. 1,89,283/- which is much less than Rs. 5,00,000/- upper limit that has been reflected in the Circular dated 30.10.2003. Therefore, we find no reason as to why the respondent authorities should not have considered the aforesaid Circular dated 30.10.2003 while deciding the claim of the petitioner, when his claim was for refund of tax deducted at source. As no dispute that the petitioner claims tax deduction at source from the income that has generated from the said assessment year only and the return which was submitted by him at the first instance was accepted and there is no additional income that he had made while submitting the revised return on the basis of the tax deducted at source is concerned. Impugned order passed by respondent No.1, is not sustainable and the same deserves to be and is accordingly held to be bad in law in view of the Instruction No.12 of 2003, dated 30.10.2003 is concerned.

Summary

Issues Involved:
1. Condonation of delay in filing income tax return for Assessment year 2001-02.
2. Rejection of claim for refund of tax deducted at source on rental income.

Summary:

Issue 1: The petitioner filed a writ petition challenging the rejection of the application seeking condonation of delay in filing the return for Assessment year 2001-02, claiming a refund of Rs. 1,89,283. The original return was filed on 31.07.2001, and a revised return was filed on 10.06.2003. The rejection was based on the claim being considered supplementary in nature, as the revised return was filed after the original assessment for the same year had been completed. The Circular dated 12.10.1993 set conditions for condoning delay, including that the refund claim should not be supplementary. However, a subsequent Circular dated 30.10.2003 relaxed these conditions, increasing the refund limit and modifying the supplementary claim criteria.

Issue 2: The rejection of the claim for refund of tax deducted at source on rental income was based on the Circular dated 12.10.1993, without considering the subsequent Circular dated 30.10.2003, which was already in force. The Court found that the petitioner's claim fell within the relaxed conditions of the later Circular, as the refund amount was below the increased limit of Rs. 5,00,000 and the claim was not supplementary in nature. The Court held that the rejection was unsustainable and allowed the writ petition, directing the refund of the tax deducted at source to the petitioner.

In conclusion, the Court held the rejection of the petitioner's claim for condonation of delay and refund of tax deducted at source to be invalid, based on the subsequent Circular dated 30.10.2003, and granted the petitioner the entitled refund amount.