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TMI Blog2011 (12) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... e received by it on behalf of a recognized provident fund is an income, which do not form a part of the total income and is, therefore, exempted from payment of Income-tax under section 10(25)(ii) of the Act. During the said assessment years of 1995-96 to 1998-99, the funds of the petitioner-trust were invested as per the instructions of the Government of India in various financial institutions by yielding an income for the trust fund : these financial institutions deducted the Income-tax at source from the incomes earned from such fixed deposits. In the assessment year 1995-96, the amount so deducted was Rs. 52,003, Rs. 3,22,141 for the assessment year 1996-97, Rs. 2,78,475 for the assessment year 1997-98 and Rs. 2,41,154 for the assessment year 1998-99. According to the petitioner-trust, as all the income generated by it is for and on behalf of a recognized provident fund, the total income, which becomes assessable under the Act during the relevant year but did not exceed the maximum amount, is not chargeable to Income-tax. Consequently, it was not required to submit or file any return of Income-tax as required under section 139 of the Act. However, in order to claim refund of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 119(2)(b) of the Act before the Chief Commissioner of Income-tax, Shillong, was, however, transferred to the Commissioner of Income-tax, Shillong. The Assistant Commissioner of Income-tax (Tech.) in the Office of the Chief Commissioner of Income-tax by his letter dated February 10, 2010, informed the petitioner-trust that the refund of less than Rs. 10 lakhs lies with the Commissioner of Income-tax. However, the Commissioner of Income-tax by his order dated June 9, 2010, refused to condone the delay in filing the returns for the aforesaid assessment years on the ground that it was not a case of genuine hardship as envisaged under section 119(2)(b) of the Act. Contending that the stance taken by the respondent authorities is contrary to law, the petitioner-trust is now filing this writ petition for appropriate relief. 4. The writ petition is opposed by the respondent authorities who have now filed their affidavit-in-opposition. The case of the respondent authorities as pleaded in their affidavit-in-opposition is that under section 239(2)(c) of the Act, the claim of refund can be allowed only if such claim is made within one year from the last date of the assessment year for whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordance with law ; 139. (1) Every person,- (a) being a company or a firm ; or (b) being a person other than a company or a firm, if his total income or the total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to Income-tax, shall, on or before the due date, furnish a return of his income or the income of such other person during the previous year, in the pres cribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed : . . . (4) Any person who has not furnished a return within the time allowed to him under sub-section (1), or within the time allowed under a notice issued under sub-section (1) of section 142, may furnish the return for any previous year at any time before the expiry of one year from the end of the relevant assessment year or before the completion of the assessment, whichever is earlier : . . . 239. (1) Every claim for refund under this Chapter shall be made in the prescribed form and verified in the prescribed manner. (2) No such claim shall be allowed, unless it is made withi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O and that extension of time for filing of returns of income were sought from the Assessing Officer on November 14, 1995, and on December 21, 1995, and that Income-tax exemption certificates were not issued by the Assessing Officer despite petitions, being made. The Revenue authorities were not impressed with the explanation of the petitioner for condoning the delay. Be that as it may, the fact remains that the Revenue authorities do not dispute the entitlement of the petitioner for refund of the deducted amount. The question to be decided then is, whether the Revenue authorities can take the shelter of technicalities to deny refund of the Income-tax deductions made at source, which do not legitimately belong to them ? 7. In this connection, the two cases cited by the senior counsel for the petitioner, namely, Pala Marketing Co-operative Society Ltd. v. Union of India [2008] (1) KLJ 561 ; [2009] 311 ITR 177 (Ker) and R. Seshammal v. ITO [1999] 237 ITR 185 (Mad), appear to have a direct bearing on the instant case. In Pala Marketing (supra), the facts of the case are that the petitioner was a co-operative society engaged in marketing agricultural produce of its members. Even though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Court in R.Seshammal v. ITO [1999] 237 ITR 185 (Mad). That was a case in which even though proceedings were initiated under section 148 of the Income- tax Act, those proceedings were dropped by the Income-tax Officer on the ground that there was no chargeable income, on which tax could be levied. When he passed that order, he had before him the return which had been filed by the petitioner, wherein the income for the relevant assessment year was shown as "nil" and the details of the amounts paid as advance tax were also set out. The petitioner had paid Rs. 3,324 on September 6, 1982, a similar sum of Rs. 3,324 on December 13, 1982, and yet another sum of Rs. 37,160 on March 2, 1983, in all totalling Rs. 43,808. The Income-tax Officer did not find any inaccuracy in the return submitted by the assessee. The petitioner received an intimation from the Income-tax Officer dated July 17, 1990, refusing to refund the amount to her on the ground that the return of Income-tax had not been filed voluntarily before the Income-tax Officer in time as per section 139(1) of the Act and that the refund had also not been applied for by the assessee in time under section 237 of the Act. The defenc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue. Yet, the Revenue has refused to refund the same by taking some hypertechnical view of the matter. If the petitioner-trust is being deprived of a sum of Rs. 8,93,773 which legitimately belongs to it due to perverse view taken by the Revenue, is it still rational to say that no genuine hardship is being caused to it ? I do not think so. In my opinion, the Revenue is acting like a small-time trader, and is in danger of being accused as interested in enriching itself unjustly at the expense of a citizen : this another form of State extortion from a helpless taxpayer. The Revenue also does not dispute that the petitioner trust has no liability whatsoever to it to pay the aforesaid amount. Therefore, I am constrained to observe that the Revenue has not properly applied its mind to the facts of the case and has in the process completely overlooked the provisions of section 119(1)(b) of the Act. The attitude of the Revenue, to say the least, is in defiance of logic or of accepted moral standards that no sensible person who had applied his mind to the question to be decided could have arrived at. True, no specific or express provision is engrafted in this section to deal with r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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