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2017 (12) TMI 365

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..... that, CBDT has issued notification, vide Instruction No.7 of 2002, dated 01.08.2002, wherein, they specifically directed the Assessing Officer of the Revenue to process all returns, in which, refunds are payable expeditiously. Reference was also made to the Citizen's Charter issued by the Income Tax Department, in its vision statement, published in 2014, that the Department aspires to issue refund along with interest under Section 143 (1) of the Act within six months from the date of electronically filing the returns. Writ Petitions are disposed of with the following directions:- i) The respondent is directed to consider the petitioner's Application/representation, dated 13.07.2017, (which was received by the respondent on 20.07.2017) for the assessment year 2016-17, and process the return filed for the said assessment year under Section 143 (1) of the Act and pass appropriate orders within a period of six weeks from the date of receipt of a copy of this order. ii) So far as the scrutiny assessment for the year 2015-16 is concerned, the petitioner is directed to extend full cooperation in the assessment proceedings and the Assessing Officer is directed to complete the scru .....

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..... he years 2009-10 to 2014-15, the petitioner has TDS credit of ₹ 107, 49, 80, 415, which would be claimed as refund, while filing its return of income due by November, 30, 2017. It is stated that the respondent had issued notice under Section 143 (2) of the Act, dated 04.07.2016, for initiation of scrutiny assessment, for the assessment years 2015-16. 2.3) The respondent failed to process the return of income filed by the petitioner for the assessment years 2015-16 and 2016-17, under Section 143 (1) of the Act, and grant the refund due to the petitioner, as claimed in its return of income. The petitioner, therefore, filed Applications on 20.07.2017, requesting the respondent to process the return of income for the assessment years 2015-16 and 2016-17, and grant refund along with consequential interest. This was followed by reminders, dated 03.08.2017. As the respondent has not considered the request placed by the petitioner, for processing the return of income for the assessment year 2015-16 and 2016-17, the petitioner has approached this Court, by way of these Writ Petitions, for issuing necessary directions in this regard. 3. Mr.P.S. Raman, the learned Senior Counsel f .....

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..... [(2017) 77 Taxmann. com 106 (Bombay) considered an identical factual situation, and issued a direction to the Assessing Officer to consider the representation and dispose of the same within the time frame. The observation made in the judgement, more particularly, in para Nos.9 and 10 would squarely apply to the facts of the present cases. 7. It is further submitted that, quite recently, the Hon'ble High Court of Gujarat, in the case of Corrtech International (P) Ltd. Vs. Deputy Commissioner of Income Tax, reported in [(2017) 86 taxmann. com 156 (Gujarat)], considered the scope of Section 143, as it stood prior to the amendment by virtue of the Finance Act, 2017, and issued direction to the Assessing Officer to complete the process of the assessee's return of income under Section 143 (3) of the Act, and if any refund arises out of said exercise, ordered to grant the same to the assessee, as per the statutory provisions. With the above submissions, the learned Senior Counsel prays for appropriate direction to the respondent to grant the refund. 8. Mrs. Hema Murali Krishnan, the learned Senior Standing Counsel for the respondent/Revenue submitted that, the petitioner' .....

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..... ting that, considering unambiguous language of the relevant provisions and the intention of law, CBDT, in exercise of the powers conferred on it, under Section 119 of the Act, clarifies that the processing of a return cannot be undertaken after notice has been issued under sub-section 2 of Section 143 of the Act. However, it shall be desirable that scrutiny assessments in such cases are completed expeditiously. This instruction issued by CBDT was challenged in a batch of cases before the Hon'ble High Court of Delhi, in Tata Teleservices Ltd.'s case (supra). The Hon'ble Division Bench quashed the said Instruction. At this stage, it would be relevant to refer to certain paras of the judgment, which is extracted as hereunder:- 8. It is evident that Section 143 (1D) in the manner it is worded gives a discretion to the Assessing Officer ( AO ) to decide whether the return of income has to be processed where a notice has been issued under Section 143 (2) of the Act. It is significant that sub-section (1D) was inserted in Section 143 subsequent to the insertion of sub-section (1A) which provides for centralised processing of returns. Under the Scheme framed by the CBDT in .....

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..... er administration of this Act . However, this power of the CBDT is hedged in by certain limitations. One such limitation is provided in a proviso to Section 119(1) of the Act. The other limitation is under Section 119(2) of the Act where it is mentioned that the direction or instructions issued by the CBDT should not be prejudicial to assessees . 17. The idea of vesting the CBDT with the above power is to ensure that there is an ease of administration of the Act and that ambiguities in the practice and procedure may get clarified. At the same time it has to be ensured that such instructions or orders do not add to the difficulties of the tax payers. Circulars, orders and instructions issued by the CBDT underSection 119 of the Act, to the extent they are beneficial to the Assessees are binding on the Department. If they are prejudicial to the tax payer, then they cannot prevail over the statute, which does not envisage such harsher measure. 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 inte .....

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..... uction No.7 of 2012, dated 1st August, 2002, wherein, they have specifically directed the officers of the Revenue to process all the returns, in which, refunds are payable expeditiously. Similarly, as late as in 2014, in the Citizen's Charter issued by the Income Tax Department in its vision statement states that the Department aspires to issue refunds along with interest under Section 143 (1) of the Act, within six months from the date of electronically filing the returns. In this case, the return was filed on 29th November, 2015, yet there is no reason as to why the Assessing Officer has not processed the refund and taken a decision to grant or not grant a refund under Section 143 (1 D) of the Act. This attitude on the part of the Assessing Officer leaves us with a feeling (not based on any evidence) that the Officers of the Revenu seem to believe that, it is not enough for the assesssee to please the deity (Income Tax Act) but the assessee must also please the priest (Income Tax Officer) before getting what is due to him under the Act. The officers of the State must ensure that their conduct does not give rise to the above feeling even remotely Ultimately, the Bombay Hi .....

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..... er passed order under Section 143 (3) nor issued a notice under Section 143 (2) of the Act. As in the case on hand, the petitioner/Corrtech International (P) Ltd., pleaded extreme financial hardship and requested that the Authority should refund TDS, which was deducted. Since the request was not considered, the Writ Petition was filed. The Revenue resisted the prayer for the assessment year 2015-17, by contending that, as the Assessing Officer has already issued notice under sub-section 2 of Section 143, it was not necessary for the Assessing Officer to proceed under sub-section 1 of Section 143. With respect to the assessment year 2016-17, the Revenue contended that the revised returns were filed only on 13.04.2017, and the Assessing Officer had sufficient time to process the returns under Section 143 (1) of the Act. Therefore, before such time, the assessee cannot claim refund on the basis of the return filed. 20. The Gujarat High Court, after comparing newly inserted Section 143 (1 D), as amended by the Finance Act, 2017, drew a comparison between the provisions, which stood prior to the amendment and after the amendement, and relying on the decisions in Tata Teleservices Ltd .....

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..... ffect the Revenue. 21. Coming back to the facts of hand, sofar as the assessment of the year 2-15 -16 is concerned, the return was filed on 29.09.2015 for which, the time limit under the normal provision of sub-section (1) of section 143 of the Act for processing the return is over long back. Eventhough as discussed earlier, the Assessing Officer having issued notice under sub-section (2) of section 143 of the Act, he would get an extended time for proceeding under sub-section(1) as highlighted by the Delhi High Court, in case of Tata Teleservices Ltd. (supra) and by the Bombay High Court in case of Group M Media India (P) Ltd. (supra) it would be wholly inequitable for the Assessing Officer to merely sit over the petitioner's request for refund citing the availability of time upto the last date of framing the assessment under sub-section (3) of section 143. At least, once the time upto the last date of framing the assessment under sub-section (1) of Section 143 is over without the Assessing Officer processing the return under the Assessing Officer, by all reasonable interpretation of the statutory provisions would be expected to respond to the assessee's request for .....

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..... on No.7 of 2002, dated 01.08.2002, wherein, they specifically directed the Assessing Officer of the Revenue to process all returns, in which, refunds are payable expeditiously. Reference was also made to the Citizen's Charter issued by the Income Tax Department, in its vision statement, published in 2014, that the Department aspires to issue refund along with interest under Section 143 (1) of the Act within six months from the date of electronically filing the returns. 22. In the light of the above, both the Writ Petitions are disposed of with the following directions:- i) The respondent is directed to consider the petitioner's Application/representation, dated 13.07.2017, (which was received by the respondent on 20.07.2017) for the assessment year 2016-17, and process the return filed for the said assessment year under Section 143 (1) of the Act and pass appropriate orders within a period of six weeks from the date of receipt of a copy of this order. ii) So far as the scrutiny assessment for the year 2015-16 is concerned, the petitioner is directed to extend full cooperation in the assessment proceedings and the Assessing Officer is directed to complete the scruti .....

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