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2021 (3) TMI 1207 - HC - Income TaxWithholding of refund u/s 241A - Non-finalization of tax demand - Period of limitation for sending intimation of withholding of refund - ITR being processed under Section 141(1) - notice under Section 143(2) of scrutiny assessment - HELD THAT:- Section 241A however does not prescribe the time limit within which order thereunder is to be made. The question which thus arises is, whether the order under Section 241A of the Act issued on 15th July, 2020, was within time, inasmuch as if it is beyond time, direction for refund will have to be issued and need to go into challenge to validity thereof will not arise. - In the facts of the present case, the order under Section 241A thus had to be before 31st March, 2020 and the order dated 15th July, 2020 is beyond that date. For the writ Court to quash the order under Section 241A of the Act on the ground that no tax is due and thus question of refund likely to adversely affect the revenue does not arise, this Court has to conclusively hold that the petitioner has no tax liability in India. Once it is so held, there will be nothing left to be determined in the assessment underway pursuant to notice under Section 143(2) of the Act. A determination of tax liability in a challenge to an order under Section 241A would set at naught the entire statutory scheme of assessment and appeals, ultimately to this Court, opening the doors to every assessee to whom a notice under Section 143(2) of the Act is issued, to approach this Court contending that the ITR filed and being processed under Section 143(1) of the Act admits / permits of no scrutiny and should be accepted. This Court would then be appropriating to itself the entire statutory mechanism of assessment, First Appeals and Appeals to Income Tax Appellate Tribunal and thereafter to this Court. Rather, the AO and Principal Commissioner also, in exercise of powers under Section 241A, are concerned largely with the question of grant of refund likely to adversely affect revenue i.e that the tax, if ultimately found due, being not recoverable; though the AO and Principal Commissioner have in the impugned order given detailed reasons, but in our view were not required to, as the same is likely to prejudice the assessment underway. We thus clarify that the same will have no bearing in the final assessment. Petition dismissed.
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