2024 (9) TMI 651 - HC - Income Tax

Rejection of application for revised tax return - credit of TDS against the total enhanced compensation which had been received by the petitioner under the Land Acquisition Act, 1894, although the Land Acquisition Collector LAC - application has come to be negated by the respondents firstly taking into consideration Circular No. 09/2015 dated 09 June 2015 as not liable to be entertained beyond 6 years from the end of the AY for which such an application or a claim may be made - respondents also take the position that even the writ petition had come to be preferred before this Court after an expiry of 6 years from the end of the relevant AY and consequently the petitioner was not entitled to be accorded permission to file an amended tax return. HELD THAT - A revised return along with the tax certificate need not be furnished provided such a certificate is produced before the AO within two years from the end of the AY. The AO as per the terms of Section 155 (14) was instead required to amend the order of assessment or any intimation or deemed intimation issued under Section 143 (1) of the Act. The fact that the amount which had been deducted was liable to be accorded due credit, also stands fortified from a reading of Section 237 of the Act. In our considered opinion, the aforesaid position clearly envisages and caters to contingencies and situations like the present where amount of tax paid or treated as paid for and on behalf of the assessee if found to be in excess of that which is chargeable, the assessee would become entitled to claim a refund. It is in the aforesaid context that the provision enables the assessee to place its case before the AO and to provide all material particulars for its consideration so that a prayer for refund may be processed. The provision for refund and review as conferred and mandated would also be in line with the constitutional imperatives of Article 265 of the Constitution. Form of claim for refund and limitation - Undisputedly and as things stands today that prescription would have no application bearing in mind the prerogative writ that we propose to issue. In any case, the respondents have clearly lost sight of the undisputed fact that it was only after the direction of this Court that the authority had issued a fresh certificate favouring the writ petitioner. The respondents have also failed in their duty to bear in mind the mandate of Sections 204 and 205 of the Act. While Section 204 identifies the person responsible for deduction of tax, and which in this case was the LAC (South), Section 205 in unambiguous holds that the assessee on whose account tax may have been deducted, cannot be held liable. Thus, unable to sustain the impugned order and the stand taken by the respondents. We consequently allow the instant writ petition and quash the impugned order dated 23 October 2018. We direct the respondents to take on board the revised return which the petitioner may submit within a period of four weeks from today. The return may be duly placed before the concerned AO for processing the prayer for refund bearing in mind the provisions contained in Section 227. Respondents while framing the order for refund shall also bear in mind the statutory regime which applies with respect to interest in case of delayed disbursal and credit.

Summary

Issues:
Challenge to rejection of application for revised tax return and delay condonation.

Analysis:
The petitioner filed a writ petition seeking relief after the rejection of the application to submit a revised return for AY 2010-11 and condone the delay under Section 119(2)(b) of the Income Tax Act, 1961. The principal challenge was against the order dated 23 October 2018, which denied the petitioner's request (Para. 2).

The petitioner had filed the original return for AY 2010-11 on 24 June 2010, but the TDS credit was not reflected in Form 26AS due to compensation received under the Land Acquisition Act, leading to discrepancies (Para. 3-4). The petitioner approached the court seeking direction for TDS credit, which was granted, and a revised Form 16A was issued by the Land Acquisition Collector (South) (Para. 5-6).

The respondents rejected the application based on Circular No. 09/2015, citing a limitation of 6 years for such claims, which the court found untenable as it imposed a restriction on the court's jurisdiction under Article 226 of the Constitution (Para. 7-9). The court also criticized the reliance on the circular, emphasizing that no limitation applies to the court's extraordinary jurisdiction (Para. 10-11).

The court highlighted the statutory provisions under Section 199 and Section 155(14), stating that a revised return need not be filed if the tax certificate is produced within two years from the end of the AY, and the AO must amend the assessment accordingly (Para. 13-15). Additionally, Section 237 allows for refunds if the tax paid exceeds the proper chargeable amount, emphasizing the right of the assessee to claim a refund (Para. 16-17).

The respondents' reliance on Section 239 was countered by the court, noting the amendments and the respondents' oversight of the fresh certificate issued post-court direction (Para. 18-20). The court also pointed out the responsibilities of the person deducting tax under Sections 204 and 205, holding that the assessee cannot be directly demanded to pay the tax (Para. 21-22).

Consequently, the court allowed the writ petition, quashed the impugned order, directed the acceptance of the revised return, and instructed the respondents to process the refund request within four weeks, considering the relevant provisions of the Act (Para. 23-25).