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TMI Blog2020 (7) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... services to the general public, filed its return of income for the Assessment Year ('AY') 2018-19 on 29th October, 2018 claiming refund of Rs. 1,43,48,810/- on account of excess deduction of tax at source. Revenue selected the case of the petitioner for limited scrutiny under Section 143(2) of the Act vide notice dated 22nd September, 2019. Subsequently, the 'Centralised Processing Centre' processed the return of income vide order dated 12th November, 2019 under Section 143(1) of the Act which resulted in refund of Rs. 1,57,83,688/-. However, since the said refund was not granted, petitioner submitted various representations dated 29.11.2019, 16.12.2019 and 17.12.2019 in this respect. Thereafter, in a personal hearing granted to the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hand sought to distinguish the cases relied upon by the petitioner on facts. She argued that in the instant case, there are in fact genuine reasons for withholding the refund and therefore, the Assessing Officer has rightly exercised the jurisdiction under Section 241A of the Act. She submitted that the case of the petitioner has been selected for limited scrutiny and therefore till the finalization of the assessment, the refund has been rightly withheld under Section 241A of the Act. 5. The reasons for withholding the Revenue as contained in the letter dated 10th January, 2020 read as under: "The assessee filed return of income for A.Y. 2018-19 vide ack. No. 3.54565941291018, dated 29.10.2018 declaring loss of Rs. 1,58,92,872/- and has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . In the present case, the AO has completely lost sight of the words in the provision to the effect that, "the grant of the refund is likely to adversely affect the revenue". The reasons that are relied upon by the Revenue to justify the withholding of the refund in the present case, are abysmally lacking in reasoning. Except for reproducing the wordings of Section 241A of the Act, they do not state anything more. The entire purpose of Section 241A would be negated, in case the AO was to construe the said provision in the manner he has sought to do. It would be wholly unjust and inequitable for the AO to withhold the refund, by citing the reason that the scrutiny notice has been issued. Such an interpretation of the provision would be compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also be approved by the Principal Commissioner, or Commissioner, as the case may be and this should be done objectively." (Emphasis supplied) 7. Further in the case of Ericsson (Supra), the views were reiterated in the following words: 18. The refund of amounts claimed - where they appear justified, by itself cannot be said to be adverse to the interest of the revenue. The interest of revenue lies in collecting revenue in a legal and justified manner. It does not lie in retaining the collected taxes in excess of what is justified, since the excess collection cannot even be properly termed as "revenue". The excess collection of tax is a liability of the State and it lies in the interest of the revenue of the State to discharge its inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 143 (1) of the Act alongwith interest to the petitioner. In the eventuality of the respondents recording any reasons for withholding a part thereof, or the entire amount due for refund to the petitioner under Section 143(1), the reasons thereof as approved by the Principal Commissioner of Income Tax shall be provided to the petitioner forthwith. It shall be open to the petitioner to take remedial steps in respect of any orders for withholding of refund that may be passed. Needless to state that the reasons recorded for withholding of refund under section 241A would only amount to a tentative view and would not come in the way of the Assessing Officer to frame the assessment under section 143(3) of the Act. 9. The writ pet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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