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2007 (2) TMI 172 - KARNATAKA HIGH COURTSeeking for quashing of the endorsement and for issue of a consequential mandamus to direct respondent No.2 to refund the excess deduction of Sum deducted by his employer and remitted to the Income-tax Department - Claim for exemption u/s 10(10C) - Amount received under the voluntary retirement scheme - Application u/s 119(2)(b) for condonation of delay in filing the refund - non-filing of the return within the time stipulated u/s 139(1) or the extended time u/s 139(4) - HELD THAT:- In the present case, it is obvious that respondent No.2 is not inclined to process the return as the petitioner may become entitled for refund if the return is processed and orders passed thereon. If it were to be a case where the petitioner was to pay some tax which he had not paid earlier, perhaps the respondents would have been more than willing to even issue a notice u/s 147 of the Act and call upon the assessee to file a return or a revised return as the case may be and proceed to take further action under the Act. The test is if a return pursuant to the notice u/s 147 of the Act could be processed, there is no reason as to why return filed otherwise cannot be processed. The defence put up by the respondents for not processing the return filed by the assessee in Form No. 2D is not supported by any provision of the statute and can only amount to inaction on the part of the respondents. The time stipulation prescribed for filing a return of income in terms of section 139 of the Act is operative on a person who is compelled to file a return in terms of section 139(1) of the Act. It is a person who has income over and above the exempted limit and whose income is taxable under the Act, who is required to file the return and while so, is bound to follow the period. The extended periods in terms of several sub-sections are also applicable to such persons. Therefore, to say that the income-tax authorities are disabled from scrutinising the return filed by the petitioner, in view of the time stipulation in terms of section 153 for processing such return may not be correctly apply at all. On the other hand, the employer having deducted certain amount from the petitioner as deduction at source on the payment of salary/retiral benefits and having remitted it to the account of the Income-tax Department and this deduction being in terms of the provisions of the Act and if the assessee is not otherwise enabled to claim refund of this amount under any other statutory provisions and if he is not actually liable to pay the kind of income-tax deducted at source nor learned counsel for the respondent having pointed out to any enabling statutory provision, the only other way the petitioner can seek for refund of the amount is by filing a return of his income and as a result of the assessment if it is found the tax liability of the petitioner is nil, the Assessing Officer may take note of the amount already deducted from out of the amount paid to the petitioner by his employer and remitted to the Income tax Department and direct refund of that amount to the assessee as part of the assessment order. For not performing this exercise, the respondents cannot bind the time stipulation indicated in section 139 of the Act as a defence. For the very reason, reference to the provisions of section 192(1B) of the Act and on which reliance is placed by learned counsel for the respondents is also not tenable, as it is only such assessee who is seeking for an extension of the time stipulation or a condonation of delay in compliance, who may invoke the provisions section 119(2)(a) of the Act. If no time stipulation was in the first instance applicable to the return that is filed by the petitioner, the provisions of section 119(2)(b) are also not needed at all. Viewed from another angle also, the respondents cannot decline to process the return as the exemption of payment as terminal benefit and exceeding a sum in terms of section 10(10C) of the Act is also one on a claim by the assessee as an amount received which qualifies for this exemption. This again can be done only in a return filed by the assessee and not elsewhere. It may be noticed that if the assessee is not entitled for this benefit of section 10(10C) then the income becomes taxable and it can be brought to tax by the Assessing Officer by invoking the provisions of section 147 of the Act. At least for determination of this position, it will be necessary for the Assessing Officer to process the return and finalise the same and if need be by invoking the provisions of section 147 also. Even without looking into the return, it will not be possible for the Assessing Officer to conclude that as there is no taxable income, no need to process the return, etc. Therefore, in either view of the matter, it will be necessary for the Assessing Officer to process the return and to pass orders in accordance with the provisions of the Act and not to justify the inaction. The petitioner having been put to the ordeal of not processing his return, declining an amount which he would have earned by his toil, the respondents are bound to compensate and I am of the view it calls for commensurate cost to be paid to the petitioner. Cost is also increased to make the respondents realise the effect of it, as this court cannot appreciate an inaction on the part of a public authority being put forth as a defence for not performing the duty and that in turn resulting in harassment and hardship to a hapless citizen like the petitioner, who is compelled to approach this court for relief. The endorsement bearing passed by respondent No.2 is hereby quashed by issue of a writ of certiorari. Writ petition allowed.
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