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TMI Blog1984 (9) TMI 31X X X X Extracts X X X X X X X X Extracts X X X X ..... 1972-73 amounting to Rs. 2,13,095. The company furnished on October 16, 1973, its return of income for the assessment year 1973-74. In the return of income, the company declared a loss of Rs. 1,65,200. The statement of pre-paid taxes was given in Part II of the return. In it was included a sum of Rs. 5,830.16 as tax deducted at source (dividends) and advance tax paid on various dates amounting to Rs. 2,13,095. The case of the company is that as no regular assessment was likely to be made or had been made within six months from the date of furnishing of return, the Income-tax Officer was duty bound under the proviso to section 141A of the Act to refund the amount of pre-paid taxes of Rs. 2,18,925 immediately after the expiry of the period of six months from the date of the filing of the return. This period ended on April 15, 1974. The Income-tax Officer, however, issued notices under sections 142(1) and 143(2) of the Act on April 26, 1975, and thus initiated action for making regular assessment for the first time on the said date. The company claims that it invited the attention of the Income-tax Officer towards the provisions of section 141A of the Act and requested him to allow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax Officer to make an assessment de novo in the light of the observations made therein. The company again invoked the provisions of section 141 A of the Act and requested the Income-tax Officer to make a provisional assessment and to allow the refund. The Income-tax Officer wrote back that at the time of original assessment, a refund of Rs. 69,602 was determined and was payable which was adjusted against the demand for the assessment year 1972-73 and, therefore, the question of determination of provisional assessment for refund does not arise. The company wrote several reminders thereafter and ultimately filed the present writ petition on December 16, 1982, claiming that the Income-tax Officer be directed to allow refund of Rs. 2,18,925 under section 141 A of the Act for the assessment year 1973-74 before finalising the fresh assessment. Section 141A(1) of the Act as it existed on April 1, 1973, relevant for the assessment year 1973-74 under consideration, reads as under: " Where a return has been furnished under section 139 and the assessee claims that the tax paid or deemed to have been paid under the provisions of Chapter XVII-B or Chapter XVII-C exceeds the tax payable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ular assessment as directed by the appellate officer. The counsel concludes that this court should grant a writ of mandamus as the Income-tax Officer is under a legal duty to proceed to make the provisional assessment under section 141A of the Act and he failed to discharge that duty. I may notice some other relevant statutory provisions. The Government has a definite desire to secure the tax at the earliest possible stage. This is reflected in the provisions contained in Chapter XVII in sections 192 to 195 which deal with deduction of tax at source and sections 207 to 212 which provide for advance payment of tax. Section 141 of the Act as also section 23B of the 1922 Act was inserted with a view to make provisional assessment in advance of regular assessment to determine the tax due from the taxpayer on the basis of the return of income made under section 139 and the accounts and documents, if any, accompanying it. The assessment so made is summary but is with the object of expediting collection of the tax on the basis of the return made by the assessee. Section 141 was deleted by the Taxation Laws (Amendment) Act, 1970, with effect from April 1, 1971, because it amended section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under section 141A. Under section 141A(1) as introduced by the Finance Act, 1968, the Income-tax Officer is authorised to make a provisional assessment of the sum refundable to the taxpayer on the basis of the return of income and the accounts and documents accompanying it, if he is of the opinion that the regular assessment is likely to be delayed. The word employed by the Legislature is " may ". It gives a discretionary power to the Income-tax Officer. The outer limit of the period of delay in making the regular assessment is not specified. The power could be construed as simply enabling and not mandatory. But any ambiguity has been removed by the Taxation Laws (Amendment) Act, 1970, with effect from April 1, 1971. The statute has been amended so as to incorporate therein the substance of the assurance given in the Lok Sabha that where the regular assessment has been delayed for a period of six months from the date of receipt of the return of income, the Income-tax Officer shall make a provisional assessment and grant refund to the taxpayer. The counsel is right in his submission that the section comprises of two parts ; one the main provision and the other a proviso. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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