9911796707
TMI Blog1997 (4) TMI 60X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act"). The petitioner is a company incorporated under the Companies Act, 1956, with its head office at Jalandhar and is assessed to income-tax under the jurisdiction of the Assistant Commissioner of Income-tax, Circle 1(2), Jalandhar, respondent No. 2. It is engaged in the business of manufacture and sale of sports goods. The assessment of the petitioner for the assessment year 1981-82 was annulled by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, on October 28, 1994. Respondent No. 2 gave effect to the order of the Tribunal and determined a sum of Rs. 10,30,171 as the refundable amount. After adjusting an outstanding amount of Rs. 35,370 against the petitioner, a sum of Rs. 9,94,801 was refunded, vide refund voucher dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o issue the refund. Respondent No. 2 did not respond to the letter, annexure P-1. The petitioner sent a reminder on November 27, 1996, annexure P-2. Respondent No. 2, vide order, annexure P-3, dated December 4, 1996, informed the petitioner that the refund of interest on the principal amount which had already been refunded has been withheld by him with the approval of respondent No. 1 as the Department had filed a reference application in the High Court against the order of the Income-tax Appellate Tribunal. Refund of the amount of interest was ordered to be withheld till the decision of the High Court in the reference application. The present petition has been filed challenging the impugned order, annexure P-3, on the ground that the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner was not doing well in business and had filed a loss return of Rs. 1,55,273 for the assessment year 1994-95 and a nil return of income for the assessment year 1995-96. The Additional Commissioner, vide letter dated September 16, 1996, addressed to the Commissioner of Income-tax, endorsed the opinion expressed by respondent No. 2 for withholding of the refund of interest. Thereafter, the Commissioner of Income-tax, after applying his mind to the opinion expressed by respondent No. 2 and the Additional Commissioner, approved the proposal for withholding of the refund of interest under section 241 of the Act. The petitioner has not been refunded the interest because of the following reasons : (i) Income-tax reference of the Depart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment year 1995-96 has been attached as annexure PR-1. It has further been submitted that the reference made to a larger Bench in C.W.P. No. 5809 of 1986, vide order dated March 13, 1997, is of no consequence as the issue involved in the aforesaid writ petition was different from the point of law canvassed in this petition. Counsel for the parties have been heard. After annulment of the assessment of the petitioner by the Tribunal, respondent No. 2 gave effect to the order of the Tribunal and refunded the principal amount of tax which had been deposited by the petitioner. Interest payable on that amount was withheld. Under sections 214(2) and 244(1A) of the Act, respondent No. 2 was bound to refund the amount along with interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer may, with the previous approval of the Chief Commissioner or Commissioner, withhold the refund till such time as the Chief Commissioner or Commissioner may determine. " Section 241 of the Act authorises the Assessing Officer to withhold the refund with the approval of the Commissioner for such time as may be determined by the Commissioner during the pendency of the proceedings under the Act where the grant of refund is likely to adversely affect the Revenue. Pendency of proceedings by way of reference application in the High Court against the order of the Tribunal and the pendency of appeal before the Tribunal against the order of the Commissioner of Income-tax (Appeals) ordering refund, stand established on the record. Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ufficient ground for withholding the interest on the refund. After wiping out the loss for the previous year and deductions made in computing the total income as provided under Chapter VI-A of the Act, a nil return was filed for the assessment year 1995-96. The petitioner had a reasonably good turnover for the assessment year 1995-96 on which profits had been earned. The facts on the basis of which the Commissioner of Income-tax had formed the opinion that it would adversely affect the interests of the Revenue if the refund of interest is made do not stand scrutiny, judged from reasonableness or fairness. The Department charges interest on late deposit of tax and has a right to levy penalty as well. In fairness to the assessee, the Legi ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
