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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 ..... dated January 28, 2008 annexure D, quashed the order and remitted the proceeding for consideration afresh. 2. On remand, the respondent, exercising jurisdiction invested in him under Instruction No. 13 of 2006 dated December 22, 2006, in respect of claims up to Rs. 10,00,000, coupled with the direction contained in the let ter dated March 28, 2008 of the Board, accepted the cause shown for the delay in filing the belated return, but denied interest on the refund amount, in view of the condition set out in Circular No. 670 dated October 26, 1993[See [1993] 204 ITR (St.) 154.]], read with Instruction No. 13 of 2006 dated December 22, 2006, by order dated May 15, 2008 annexure A. Hence, this writ petition. 3. The petition is not opposed by filing statement of objections. 4. Learned counsel for the petitioner submits that the Board exercising jurisdiction under section 119(2)(b) of the Act issued Circular No. 670 dated October 26, 1993, authorising the Assessing Officer to consider application to condone the delay in filing a belated return subject to limitation on the amount of refund, while Instruction No. 13 of 2006, dated December 22, 2006, authorised the Chief Commissioner of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while delay in filing a belated return for refund claim in cases of genuine hardship could be condoned by the Board under section 119 of the Act Interest on refund is admissible under sub-section (1) of section 244A of the Act, while sub-section (2) invests in the Chief Commissioner or Commissioner, a jurisdiction to deny interest for the period of delay in refund, for reasons attributable to the assessee. 8. The limitation to file a claim for refund in respect of the assessment year 1995-96, as in the case of the petitioner, was March 31, 1997, in accordance with section 239 as existing in the statute book, prior to the amendment by Act No. 18 of 2005. The petitioner's claim when filed on September 8, 1997, was delayed by five months and seven days which was sought to be condoned by filing the application on September 21, 1998, invoking section 119(2)(b) of the Act, showing sufficient cause. 9. Section 119, as existing prior to the amendment by Act 23 of 2004, reads thus: "119. Instructions to subordinate authorities.- (1) The Board may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit for the proper administr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x court held that executive instructions can supplement a statute or cover areas to which the statute does not extend but they cannot run contrary to the statutory provisions or whittle down their effect. In Kerala Financial Corporation v. CIT [1994] 210 ITR 129 (SC); AIR 1994 SC 2416, following the opinion of Mukharji J. at paragraph 42 in State Bank of Travancore v. CIT [1986] 158 ITR 102 (SC) ; AIR 1986 SC 757, that circulars "cannot detract from the Act", the apex court held that a circular of the Board under section 119 cannot override or detract from the Act inasmuch as, what section 119 has empowered is to issue orders, instructions or directions for the proper administration of the Act or for such other purpose specified in sub-section (2) of that section and that such an order, instruction or direction cannot override the provisions of the Act which would be destructive of all the known principles of law as the same would really amount to giving powers to a delegated authority to even amend the provisions of the law enacted by Parliament. 13. Thus viewed, section 119 authorises the Board to issue orders, instructions and directions to the income-tax authorities "for prope ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 119 of the Act. issued Circular No. 670 dated October 26, 1993 [See [1993] 204 ITR (St.) 154], authorising the Assessing Officer to admit application to condone the delay in making a belated refund claim, arising as a result of tax deducted/collected at source and advance tax where such refund does not exceed Rs. 10 thousand up to Rs. 1 lakh with prior approval of the Chief Commissioner of Income-tax, for any assessment, year. Admittedly, there was no condition to deny interest on refund arising out of a belated claim. 17. The belated refund claim of the petitioner being Rs. 2,41,505 made on September 8, 1997, and an application September 21, 1998 to condone the delay of five months and seven days, was required to be considered and orders passed thereon by the Board within a reasonable time. However, the Board passed an order dated January 8, 2007, rejecting the application, which was rightly set aside in W. P. No. 15441 of 2007, and remitted for fresh consideration by order dated January 28, 2008. 18. Undoubtedly, the Board issued Instruction No. 12 of 2003, dated October 30, 2003, relating to procedure for dealing with application to condone delay in claiming refund, authorisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21, 1998, was required to be considered by the Board under section 119(2)(b) of the Act. In fact Instruction 12 of 2003, dated October 30, 2003 makes the instruction inapplicable to the belated claim for refund prior to the assessment year 1996-97. In other words, the condition denying interest on the claim for refund made belatedly, was not applicable to the petitioner's application to condone the delay. The petitioner's claim for refund of Rs. 2,41,505 was required to be considered by the Board on the basis of the law as it then existed and not on instructions subsequently issued authorizing the Chief Commissioner of Income-tax, the respondent, based on enhanced limits of refund claim. 24. There is no material forthcoming from the order impugned that the proceedings resulting in refund were delayed for reasons attributable to the assessee so as to exclude the period from September 21, 1998, the date of filing the application to condone the delay in filing the belated return, up to July 1, 2008, whence the refund was adjusted against the petitioner's income-tax dues for the assessment year 1994-95. 25. Reliance placed upon the decision in Gujarat Electric Co. Ltd. v. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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