2024 (7) TMI 403 - AT - Income Tax

Denial of refund claim u/s 239(2)(c) - assessee filed its return of income in response to the notice u/s 148 after one year from the last date of the relevant assessment year, thus refund claim denied - only contention of assessee is that his case is covered u/s 240 of the Act as refund is made consequent to the order passed in appeal - HELD THAT - Provisions of Section 239 of the Act are applicable to an assessee claiming the refund by self-assessment whereas the cases where the refund is computed in pursuance of an order in appeal for other proceedings under the Act are covered by the provisions of Section 240 of the Act. No denying to this fact as an order u/s 251/154/147/143(3) of the Act has been passed by ACIT, Circle-8(2), Kolkata determining the refund of the assessee As we have already discussed in the preceding paragraphs that ACIT, Circle-8(2), Kolkata 31.01.2018 determines the refund of the assessee at the rate of Rs. 27,04,767/- hence, in our view the claim of the point of the assessee is covered u/s 240 of the Act and not u/s 239 of the Act as held by the AO and confirmed by the CIT(A). Accordingly, the case of the assessee is hereby allowed by setting aside the orders of ld. AO and ld. CIT(A) and the assessee is entitled to get the refund amount of Rs. 27,04,767/-. Appeal filed by the assessee is allowed.

Summary

Issues:
Appeal against order u/s 250 of the Income Tax Act, 1961 for AY 2013-14 denying refund claim under Section 239(2)(c) and invoking Section 240 for refund consequent to appeal order.

Analysis:
The appeal pertains to the Assessment Year 2013-14 challenging the order passed under Section 250 of the Income Tax Act, 1961 by the Commissioner of Income-tax (Appeals)-NFAC, Delhi. The appellant filed the return declaring taxable income, which was later revised resulting in a refund claim. The Assessing Officer (AO) denied the refund claim under Section 239(2)(c) due to late filing of the return, which was upheld by the CIT(A). The appellant contended that Section 240 applies as the refund is consequent to the appeal order, citing the case law CIT vs. Royal Rags Pvt. Ltd. The Department supported the CIT(A)'s decision.

Upon review, it was noted that the AO denied the refund claim based on Section 239(2)(c) for late filing, while the appellant argued for Section 240 application due to the refund being a result of the appeal order. Referring to the Madras High Court judgment, it was clarified that Section 239 applies to self-assessment refund claims, whereas Section 240 covers refunds from appeal orders. Since the refund was determined post-appeal order, it was concluded that Section 240 is applicable, overturning the decisions of the AO and CIT(A). Consequently, the appellant's appeal was allowed, entitling them to the refund amount.

In conclusion, the Tribunal allowed the appellant's appeal, setting aside the orders of the AO and CIT(A) and granting the appellant the refund amount. The decision was based on the application of Section 240 for refunds resulting from appeal orders, as clarified by the Madras High Court judgment. The judgment was pronounced on 5th July 2024.