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TMI Blog2010 (2) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... aw as it then existed. - 13797 of 2009 (T. IT). - - - Dated:- 24-2-2010 - RAM MOHAN REDDY J. A. Shankar and M. Lava for the petitioner. M. V. Seshachala for the respondent. JUDGMENT 1. RAM MOHAN REDDY J. - The petitioner, a civil contractor assessed to income-tax, filed a belated return of income on September 8, 1997, for the assessment year 1995-96 declaring income of Rs. 50,240 and claiming refund of Rs. 2,41,505 being tax deducted at source, though March 31, 1997, was the last date for filing the belated return under section 139(4) of the Income- tax Act, 1961 (for short "the Act"). The delay of five months and seven days in filing the belated return was sought to be condoned by an application filed on September 21, 1998, invoking section 119(2)(b) of the Act. In the first instance, the rejection of the petitioner's application to condone the delay, by order dated January 8, 2007, of the Central Board of Direct Taxes for short the "Board", when called in question in W. P. No. 15441 of 2007, a learned single judge by order dated January 28, 2008 annexure D, quashed the order and remitted the proceeding for consideration afresh. 2. On remand, the responden ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n refund since the proceedings relating to refund were delayed for reasons attributable to the petitioner. 6. Having heard the learned counsel for the parties, perused the pleading and examined the order impugned, the following two questions arise for decision making: (i) Whether the condition to deny interest on refund amount due to an assessee under the Act, while admitting an application to condone the delay in making a claim for belated refund under section 237 of the Act, as contained in Instruction No. 12 of 2003 dated October 30, 2003 and 13 of 2006 dated January 22, 2006, of the Board, is inconsistent with sub-section (2) of section 244A of the Act? (ii) Whether in the facts and circumstances, the respondent was justified in denying interest on belated refund claimed for the assessment year 1995-96, by the order impugned? 7. Section 237 of the Act provides for claim of refund of excess amount of tax paid by the assessee or on his behalf for any assessment year. The form of claim for refund and limitation are prescribed by section 239 of the Act while delay in filing a belated return for refund claim in cases of genuine hardship could be condoned by the Board u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d or any other relief under the Act after the expiry of the period specified by or under the Act for making such application or claim and deal with the same on the merits, in accordance with law. The statute does not indicate vesting a jurisdiction in the Board to issue instructions in excess of what is stated in section 119(2)(b). It is well- settled that instructions/circulars/ are binding to the extent they are not inconsistent with the provisions of the Act. 11. It is elsewhere said that the power of the Board is enlarged where the provisions of the Act bar the income-tax authorities from entertaining any application for claim of any exemption, deduction, refund or any other reliefs due under the Act for the reason that the time limit specified for the making of such application or claim has expired. Thus, the Board is empowered to authorise the Commissioner of Income-tax Officer to admit such application or claim even after the time limit and to deal with it, in accordance with law. 12. In State of M. P. v. G. S. Dali and Flour Mills, AIR 1991 SC 772; 187 ITR 478, the apex court held that executive instructions can supplement a statute or cover areas to whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, whether wholly or in part, the period of delay so attributable to him shall be excluded from the period for which interest is payable, and where any question arises as to the period to be excluded, it shall be decided by the Chief Com missioner or Commissioner whose decision thereon shall be final…. (4) The provisions of this section shall apply in respect of assess ments for the assessment year commencing on the 1st day of April, 1989, and subsequent assessment years." 15. It is thus clear that interest on refunds payable when an amount is due to the assessee under the Act is subject to exclusion of the period of delay occasioned and attributable to the assessee as may be decided by the Chief Commissioner or Commissioner of Income-tax whose decision is final. The statute compels the denial of interest on refund if the proceedings resulting in the refund are delayed for reasons attributable to the assessee. The pro vision is made applicable to assessments for the year commencing from April 1, 1989. 16. Having noticed the statutory provisions, indisputedly the Board in exercise of its jurisdiction under section 119 of the Act. issued Circular No. 670 dated October 26, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which interest is payable under sub-section (2) of section 244A of the Act. 22. Sub-section (4) of section 244A makes the section applicable to assessments for the assessment year commencing from April 1, 1989. The substantive law relating to denial of interest on refunds in respect of belated claim, being fully covered by sub-section (2) of section 244A of the Act, it cannot but be concluded that, the Board, exercising a jurisdiction under section 119 of the Act could not have issued instructions/orders/directions/circulars, imposing a condition denying interest on refund, so as to supplement the law. Such a condition in derogation of the statute, is not "for the proper administration of the Act". That, condition by way of instruction contained in No. 12 of 2003 and 13 of 2006 overrides sub-section (2) of section 244A of the Act. and is in exercise of a power not vested in the Board, and hence inconsistent. The first question is answered in the affirmative. 23. There is no dispute over the fact that the petitioner's belated claim for refund made on September 8, 1997, along with an application to condone the delay filed on September 21, 1998, was required to be considered b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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