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TMI Blog1973 (5) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... nd taken by the department, an assessee can be deprived of the refund for an indefinite period at the will of the Income-tax Officer, because there is no period or limitation prescribed for passing a fresh assessment order on remand. We find no reason in law or in equity to accept such a preposterous proposition - We, accordingly, allow this petition - - - - - Dated:- 16-5-1973 - Judge(s) : C. S. P. SINGH., R. L. GULATI. JUDGMENT The judgment of the court was delivered by GULATI J.-The petitioner No. 1, Sri Purshottam Dayal Varshney, was at the material time the karta of a Hindu undivided family known as "P. D. Varshney Brothers" which is the petitioner No. 2. On December 29, 1956, a sum of Rs. 30,000 was gifted to Smt. Ganga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ndivided family with regard to the shares held by her. The Tribunal, therefore, remanded the case to the Income-tax Officer in the following words: "We, therefore, set aside the order passed by the Income-tax Officer and restore the case to his file with the direction to make a fresh assessment from the return stage." The Income-tax Officer passed a fresh assessment order after about six years on April 27, 1968. This time the dividend income was excluded from the assessment of the Hindu undivided family. After the completion of the assessment order a sum of Rs. 14,556 was refunded to the Hindu undivided family on July 9, 1968. Thereupon, the petitioner by an application,dated January 30, 1970, requested the Income-tax Officer to pay int ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 963, and the cases were remanded to the Income-tax Officer for a fresh assessment. The Income-tax Officer completed the fresh assessment against the Hindu undivided family for the assessment years 1960-61 and 1961-62 by his order dated 27th April, 1968, and 14th November, 1968, respectively, and allowed refund of Rs. 25,456 and Rs. 26,260, respectively. The petitioner applied for payment of interest on the ground that the refund had been delayed. The Income-tax Officer rejected this application by his order, dated April 17, 1971. Thereafter, the petitioners applied to the Commissioner of Income-tax, Lucknow. The Commissioner by his order dated 15th September, 1972, disposed of the petitioners' claim for interest for the assessment years 195 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... with which we ate concerned as it stood at the material time read: "(1) Where a refund is due to the assessee in pursuance of an order referred to in section 240 and the Income-tax Officer does not grant the refund within a period of six months from the date of such order, the Central Government shall pay to the assessee simple interest at four per cent. per annum on the amount of refund due from the date immediately following the expiry of the period of six months aforesaid to the date on which the refund is granted. " Under the Income-tax Act, although the liability to pay tax is cast upon an assessee each year in accordance with the Finance Act of that year, yet the tax becomes due and payable only when an assessment order is passed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a refund is the subject-matter of an appeal or further proceeding or where any other proceeding under this Act is pending, and the Income-tax Officer is of the opinion that the grant of the refund is likely to adversely affect the revenue, the Income-tax Officer may, with the previous approval of the Commissioner, withhold the refund till such time as the Commissioner may determine." This provision fully covers the cases where remand proceedings are pending after the assessment order is set aside. In such cases the Income-tax Officer can, with the approval of the Commissioner of Income-tax, withhold the refund till the remand proceedings are over. The legislature has taken care that if the refund is withheld the assessee is not deprived ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rtment, an assessee can be deprived of the refund for an indefinite period at the will of the Income-tax Officer, because there is no period or limitation prescribed for passing a fresh assessment order on remand. We find no reason in law or in equity to accept such a preposterous proposition. We, accordingly, allow this petition. The order of the Commissioner dated September 15, 1972 (annexure " 4 ") as also the order of the Income-tax Officer, dated April 17, 1971 (annexure "10")are quashed. The Income-tax Officer is directed to work out the proper amount of interest in accordance with the law as clarified by us and to grant the necessary refund to the petitioner. The petitioner is entitled to the costs. Petition allowed. - - TaxTM ..... X X X X Extracts X X X X X X X X Extracts X X X X
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