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TMI Blog1974 (12) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... r the provisions of the old Act and the new Act and the Appellate Assistant Commissioner allowed the appeals. Against his orders, the Commissioner of Income-tax preferred appeals before the Income-tax Appellate Tribunal and the appeals were allowed by the Tribunal. Then, at the instance of the petitioner, the question of its liability to pay income-tax under the provisions of both the Acts was referred to this court. This court, by its judgment dated December 3, 1971, in R.C. No. 14 of 1970,* allowed the reference on the ground that the Corporation is an institution meant for the advancement of the object of general public utility not involving the carrying on of any activity for profit and, therefore, its income is exempt from assessment to tax under section 4(3)(i) of the old Act and section 11 of the new Act. In compliance with the opinion expressed by this court, the Tribunal cancelled the assessments in question by its order dated August 28, 1972. The petitioner, therefore, asked for refund of the amount paid by way of income-tax. Without refunding the amount, the respondents issued an order dated December 18, 1972, under section 241 of the Act withholding the amount refundabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ken under section 241 by him is subject to the approval of the Commissioner. Section 240, which provides for refund of amounts to an assessee under the orders of the appellate authority, is controlled by section 241. What the learned Advocate-General contends is that when once this court gives an opinion in favour of the assessee and against the revenue and consequently orders are passed by the Tribunal in conformity with the opinion of this court, it is not open to the Income-tax Officer, purporting to act under section 241, to nullify the effect of the judgment of this court. According to him, the legislature cannot set at naught the decision of this court so as to empower the revenue to retain the amounts illegally collected as tax. In support of his contention, the learned Advocate-General invited our attention to the decision in Municipal Corporation of the City of Ahmedabad v. New Shorrock Spinning and Weaving Co. That, was a case where the collection of property tax by the Municipal Corporation of Ahmedabad under the provisions of an amending Act was challenged. Prior to the amendment, under the provisions of the Bombay Provincial Municipal Corporation Act, buildings were as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... removed by the legislature, the Income-tax Officer gets no jurisdiction to render the decision of this court ineffective. It should be remembered in the first place, that the judgment of the High Court has not become final. Admittedly, an appeal against the judgment has been filed by the revenue under section 261 of the Act. When an appeal is pending, it cannot be said that the Income-tax Officer, by his order dated December 18, 1972, has rendered the judgment of this court ineffective. Until the Supreme Court pronounces its judgment, there is no finality of the question as to the exemption claimed by the petitioner for payment of income-tax. The High Court, in the reference, had not struck down any provision of the statute on the basis of which the assessments were set aside. The question was only as regards the claim put forth by the petitioner for exemption from payment of income-tax. Therefore, the case on hand cannot be likened to the cases of the Supreme Court. The Supreme Court in Orient Paper Mills v. State of Orissa considered the validity of a sales tax legislation depriving assessees of right to obtain refund of tax paid under error of law. Upholding the validity of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat it was lawfully circumscribed in the interests of the general public. It is relevant to bear in mind that the right to ultimately get the refund of the tax paid by the petitioner is not denied by the revenue. The legislature has only imposed restriction on that right pending decision in an appeal or further proceeding. The right to the refund is only in the nature of an interim measure to safeguard the interests of the revenue and thus promote social justice. The power conferred on the Income-tax Officer is not absolute. In the first instance, he must be satisfied that the interests of the revenue will suffer by granting refund of the amount and also it should not, in the event of the revenue succeeding in appeal, result in protracted proceedings to recover the amount refunded to an assessee. The Income-tax Officer is not the final authority to withhold the payment of the refund. He could do so only if the Commissioner of Income-tax gives his prior approval. That check is put in order to obviate any possible arbitrary action on the part of the Income-tax Officer. Section 241 is not designed to encroach upon the judicial power of the court. That section is subject to the final d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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