TMI Blog2016 (11) TMI 1014X X X X Extracts X X X X X X X X Extracts X X X X ..... al of liability - but other reasons, automatically leads to a situation contended by the assesseee. Facially, the contention is insubstantial, because Section 139, even while obliging the officer to a course of action, i.e., declaring the return invalid, also says significantly that “and the provisions of this Act shall apply as if the assessee had failed to furnish the return.” Furthermore, as clarified by the Supreme Court, Section 240 itself is premised upon some authority of the revenue officials to decide whether the entire amount deposited, or part of it, or none at all, is to be refunded. Besides the above conclusion, this court is also of the view that the assessment is at large, given that the search resulted in a notice to the assessee under Section 153A. No doubt, it has claimed refund; yet those issues are to be adjudicated. Therefore, its claim cannot succeed. - W.P. (C) 2569/2015 - - - Dated:- 21-9-2016 - MR. S. RAVINDRA BHAT AND MS. DEEPA SHARMA JJ. Appellants Through: Mr. Ajay Vohra, Sr. Advocate with Mr. Vaibhav Kulkarni, Advocates. Respondents Through: Mr. Rahul Chaudhary, Sr. Standing Counsel. S.RAVINDRA BHAT, J. 1. The petitioner seeks q ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, thereby attaching various bank accounts of the Petitioner maintained by the respondent bank, without any prior or even any subsequent notice to it. 4. Mr. Ajay Vohra, learned senior counsel for the petitioner, argues that once the return of income has been treated as invalid, then, the said return of income would become non est, thereby, ousting all the officers of the revenue from taking cognizance whatsoever, of the information furnished in the said return of income. Reliance is placed upon Section 139 (9) particularly the non-obstante clause to contend that in case an assessee fails to rectify the defect in the return of income within the stipulated time period, then, overriding all other provisions of the Act, the said return of income shall be treated as invalid return of income and it would be deemed that no return of income has been filed by the assessee. In other words, the provisions of the Act would then apply as if the assessee has not furnished any return of income. It is next contended that liability to pay selfassessment tax under Section 140A arises only on the basis of the return of income furnished, inter-alia, under section 139 of the Act. In other wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er adjusting pre-paid taxes amounting to ₹ 27,63,84,333/-, the balance amount payable was ₹ 85,97,07,400/-. Thereafter the petitioner paid ₹ 65 crores only on different dates in April 2014. Yet, the balance of admitted tax and interest payable amounts to more than ₹ 24 crores. It is highlighted that by virtue of Section 140A (3) there is no manner of doubt that the Petitioner is an assessee in default and therefore, all the resultant consequences are attracted and apply to it under the provisions of the Act. The revenue relies on the judgment of the Supreme Court in Commissioner of Income Tax v Shelly Products 2003 261 ITR 367 (SC). Analysis and findings 7. There is no dispute that when the petitioner filed its return, it admitted tax liability. Though the return was initially without the full tax amount, it claims that after filing returns it deposited ₹ 65 crores. There was yet a shortfall of about ₹ 24 crores; since this shortfall was not made good- not because the assessee disclaimed liability, but rather because of its financial constraint, the assessing officer declared the return invalid. When the revenue has sought to take c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as not furnished under section 203 or section 206C to the person furnishing his return of income; (b) such certificate is produced within a period of two years specified under sub-section (14) of section 155; (ii) the amount of compulsory deposit, if any, claimed to have been made under the Compulsory Deposit Scheme (Income-tax Payers) Act, 1974 (38 of 1974) Section 140A reads as follows: 140A. (1) Where any tax is payable on the basis of any return required to be furnished under section 115WD or section 115WH or section 139 or section 142 or section 148 or section 153A or, as the case may be, section 158BC, after taking into account,- (i) the amount of tax, if any, already paid under any provision of this Act; (ii) any tax deducted or collected at source; (iii) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India; (iv) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and (v) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction; and (iv) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD. (2) After a regular assessment under section 115WE or section 115WF or section 143 or section 144 or an assessment under section 153A or section 158BC has been made, any amount paid under subsection (1) shall be deemed to have been paid towards such regular assessment or assessment, as the case may be. (3) If any assessee fails to pay the whole or any part of such tax or interest or both in accordance with the provisions of sub-section (1), he shall, without prejudice to any other consequences which he may incur, be deemed to be an assessee in default in respect of the tax or interest or both remaining unpaid, and all the provisions of this Act shall apply accordingly. (4) The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988), shall apply to and in relation to any assessment for the assessment year commencing on the 1st day of April, 1988, or any earlier assessment year and references in this section to the other provisions of this Act shall be construed as re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand is required to be made under section 156, no consequence of refund of the entire tax collected according to the total income shown in the returns filed by the assessee can ensue and such tax which is collected on the basis of the return filed by the assessee remains a valid and legal recovery in accordance with the provisions of the said Act and there is no question of any violation of Article 265 of the Constitution of India in respect of the tax so recovered on the basis of the total income shown by the assessee in his return. 10. The Gujarat High Court had also said that Section 240 as it stood prior to the addition of the proviso, the entire amount of tax properly chargeable under the Act was required to be refunded; therefore, the provision contained in clause (b) of the proviso to section 240 clarified what was always implicit, namely, was to refund the amount which exceeded the tax which was properly chargeable under the Act. The Supreme Court observed as follows: In the cases in hand the question is only with regard to the refund of tax paid by way of advance tax or self-assessment tax which was paid by the assessees themselves admitting their liability to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier noticed the scheme of the Act. Section 4 of the Act creates the charge and provides inter alia for payment of tax in advance or deduction of tax at source. The Act provides for the manner in which advance tax is to be paid and penalises any assessee who makes a default or delays payment thereof. Similarly the deduction of tax at source is also provided for in the Act and failure to comply with the provisions attracts the penal provisions against the person responsible for making the payment. It is, therefore, quite apparent that the Act itself provides for payment of tax in this manner by the assessee. The Act also enjoins upon the assessee the duty to file a return of income disclosing his true income. On the basis of the income so disclosed, the assessee is required to make a self-assessment and to compute the tax payable on such income and to pay the same in the manner provided by the Act. Thus the filing of return and the payment of tax thereon computed at the prescribed rates amounts to an admission of tax liability which the assessee admits to have incurred in accordance with the provisions of the Finance Act and the Income Tax Act. Both the quantum of tax payable an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the course of assessment proceeding. He can certainly make such a claim also before the concerned authority calculating the refund. Similarly, if he has by mistake or inadvertence or on account of ignorance, included in his income any amount which is exempted from payment of income-tax, or is not income within the contemplation of law, he may likewise bring this to the notice of the assessing authority, which if satisfied, may grant him relief and refund the tax paid in excess, if any. Such matters can be brought to the notice of the concerned authority in a case when refund is due and payable, and the authority concerned, on being satisfied, shall grant appropriate relief. In cases governed by section 240 of the Act, an obligation is cast upon the revenue to refund the amount to the assessee without his having to make any claim in that behalf. In appropriate cases therefore, it is open to the assessee to bring facts to the notice of the concerned authority on the basis of the return furnished, which may have a bearing on the quantum of the refund, such as those the assessee could have urged under Section 237 of the Act. The concerned authority, for the limited purpose of calcula ..... X X X X Extracts X X X X X X X X Extracts X X X X
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