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2016 (11) TMI 333 - DELHI HIGH COURT

2016 (11) TMI 333 - DELHI HIGH COURT - TMI - Validity of notices issued under Section 143 (2) and 142 (1) - petitioners are aggrieved by the notices which according to them were issued with the sole purpose of preventing them from payment of refund claims pending before the concerned Assessing Officers for various assessment years on account of excess withholding of amounts paid towards estimated tax liability - Held that:- This Court is of the opinion that the submissions of the revenue vis-a-v .....

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fore, itself in the taxation universe, does not in any manner undermine the restitutionary principle and the reasonableness inherent in it. In other words, if such provision does not exist then the assessee would still have a right to claim excess amount in law unrestricted in any manner with respect to procedural formalities dictated by the Act. - As far as the submission with respect to the manner in which discretion is to be exercised is concerned, there is nothing in the judgment in Tata .....

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ere cannot be a blind or blatant mandate upon certain rights. - Thus we are of the opinion that there is no need to examine the challenge to the validity of Section 143 (1D). AO are directed to examine the refund claims and pass appropriate orders - W.P. (C) 3665/2015, W.P. (C) 3936/2015, W.P. (C) 6543/2015, W.P. (C) 2186/2016, W.P. (C) 12084/2015, CM APPL.37530 &37624/2016 - Dated:- 6-10-2016 - S. Ravindra Bhat And Deepa Sharma, JJ. Mr. N. Venkataraman, Sr. Advocate with Mr. Gajendra Mahesh .....

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submitted that the withholding on account of Section 143 (1D) which provision was introduced by the Finance Act, 2012, reads as follows: - "143(10) Notwithstanding anything contained in sub-section (1), the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2)" The petitioners urged that the provision was sought to be interpreted in the light of Instruction No.1 of the Circular of the CBDT dated 13.01.2015 which inter alia a .....

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note of various previous decisions, notably the one in Keshavji Ravji and Co. v. Commissioner of Income Tax (1990) 183 ITR 1 (SC) and held that the Circular could not mandate a particular kind of behaviour as the only true interpretation of Section 143 (1D). The relevant discussion in Tata Teleservices Ltd. (supra) is as follows: - 21. It is sought to be explained by Mr. Ashok K. Manchanda, learned Senior Standing counsel for the Revenue, that what has been issued by the CBDT on 13th January 201 .....

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n be traced only to Section 119 of the Act. Therefore, such 'instruction' also has to adhere to the discipline of Section 119 of the Act. 23. The real effect of the instruction is to curtail the discretion of the AO by 'preventing' him from processing the return, where notice has been issued to the Assessee under Section 143(2) of the Act. If the legislative intent was that the return would not be processed at all once a notice is issued under Section 143 (2) of the Act, then the .....

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Consequently, the Court is of the view that the impugned Instruction No.1 of 2015 dated 13th January 2015 issued by the CBDT is unsustainable in law and it is hereby quashed. It is directed that the said instruction shall not hereafter be relied upon to deny refunds to the Assessees in whose cases notices might have been issued under Section 143(2) of the Act. The question whether such return should be processed will have to be decided by the AO concerned exercising his discretion in terms of Se .....

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laim refund in the circumstances where assessments are completed or pending is the one conferred by the statute and that such right can be conditioned or curtailed by other provisions as undoubtedly Section 143 (1D) does. This Court is of the opinion that the submissions of the revenue vis-a-vis Section 237 is partly correct in the sense that undoubtedly it provides for refund claim to the assessee wherever the circumstances warrant and the assessment completed yields results in excess amounts r .....

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