Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

M/s. Randstad India Pvt. Ltd. Versus The Deputy Commissioner of Income Tax, LTU

2017 (12) TMI 365 - MADRAS HIGH COURT

Process of assessee's return u/s 143 - refund claim - eligible interest under Section 244A - period of limitation - Held that:- For the assessment year 2015-16, the case was selected for scrutiny and notice under Section 143 (2) was issued on 04.07.2016. Apart from that, the time limit of one year from the end of the financial year is over, and the question of issuing an intimation under Section 143 (1) does not arise, as there is a statutory prohibition under second proviso to Section 143 (1). .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

49 - BOMBAY HIGH COURT), wherein, the Court observed 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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 scrutiny assessment as expeditiously as possible. - Writ Petition Nos. 22665 & 22666 of 2017 W.M.P.No.23767 and 23768 of 2017 - Dated:- 24-11-2017 - T. S. Sivagnanam, J. For the Petitioner : Mr. P.S. Raman, Senior Counsel for Mr. R. Sivaraman .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

#39;the Act'). 2. The petitioner is a Private Limited Company, incorporated under the Companies Act, 1956, and wholly owned subsidiary of M/s. Randstad Asia Pacific B.V Netherlands, and is engaged in the business of providing various services in the core areas of recruitment, human resource solutions, etc. The returns filed by the petitioner under the Act for the previous years were subjected to scrutiny assessment, and orders were passed under Section 143 (3) of the Act. It is stated that, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

IL deduction certificates under Section 197 of the Act. Though the respondent had issued such certificate for the respective assessment years, the time between the date of Application till the date of issuance of certificate, resulted in taxes being deducted by the customers in the interim period, leading to accumulation of Tax Deducted at Source (TDS) credit. 2.2) The petitioner would further state that, on account of the substantial tax losses, there has been no tax liability for the petitione .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndent 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 t .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

1.2015, to all the Assessing Officers, directing that, processing of tax returns cannot be undertaken after issuing notice under Section 143 (2) of the Act. The validity of this Instruction No.1 of 2015, was challenged before the Hon'ble High Court of Delhi, in the case of Tata Teleservices Ltd., Vs. Central Board of Direct Taxes and the Hon'ble Division Bench, by a judgment, reported in (2016) 240 Taxman 182 (Delhi), quashed the aforesaid instruction issued by CBDT. The decision in Tata .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o process the returns and grant resultant refund due to the assessee, even in the case, where, scrutiny assessment has been initiated by issuing notice under Section 143 (2) of the Act. Therefore, the respondent ought to have expedited the refund due to the petitioner/assessee. 5. It is submitted that, for the assessment year 2014-15, the respondent committed an error, and demanded interest under Section 234 (3) at ₹ 46,47,82,586/-, and thereby, denied the refund. The petitioner filed a Pe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

143 (1) of the Act, to enable the petitioner to secure refund. 6. Further, it is submitted that, the Hon'ble High Court of Bombay, in the case of Group M. Media India (P) Ltd. Vs. Union of India, reported in [(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 wou .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r 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's assessment for the year 2015-16 was selected for scrutiny, and notice under Section 143 (2) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e financial year, in which, return is made. For the return of income for the assessment year 2015-16 (FY), the one year period expired on 31.03.2017. Further, the Applications, dated 20.07.2017, submitted by the petitioner were after issuance of scrutiny assessment, and since the respondent is in the process of adjudicating the assessment on merits, no action was taken on the Applications, dated 20.07.2017. Further, it is submitted that, it is incorrect to state that the respondent is not proces .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t year 2015-16 , it has been selected for scrutiny, and notice under Section 143 (2) was issued on 03.07.2017, and in view of the embargo created by Section 143 (1 D) of the Act, return has not been processed under Section 143 (1). 11. Heard Mr. P. S. Raman, the learned Senior Counsel appearing for Mr. R. Sivaraman, the learned counsel for the petitioner, Mrs. Hema Murali Krishnan, the learned Senior Standing Counsel for the respondent, and perused the material placed on record. 12. The petition .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 judg .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

in terms of Section 143(1A), there is a computerized random selection of returns which might be taken up for scrutiny. Thus the discretion regarding picking up a return for scrutiny is no longer left with the AO. Section 143(1D), however, continues the element of discretion in the AO when it states that the processing of return "shall not be necessary". In other words, it does not expressly state that the return shall not be processed where a notice has been issued to the Assessee unde .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Act, 2012 (which has been referred to hereinbefore) "the legislative intent is to prevent the issue of refund after processing as scrutiny proceedings may result in demand for taxes on finalisation of the assessment subsequently" (emphasis supplied). The circular then proceeds to state as under: "4. Considering the unambiguous language of the relevant provision and the intention of law as discussed above, the Central Board of Direct Taxes, in exercise of the powers conferred on i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e four AYs i.e. 2012-13 to 2015-16 was to the tune of ₹ 733.73 crores. This is a very substantial figure considering the huge losses that the Petitioner has been suffering over the years. Section 119 of the Act, on the strength of which the impugned Instruction has been issued by the CBDT, no doubt enables the CBDT to issue "such orders, instructions and directions" to the income tax authorities "for the proper administration of this Act". However, this power of the CBD .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

me 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& .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

erpret or instruct the income tax department to prevent" the issue of refund. In the event that a notice is issued to the Assessee under Section 143 (2) of the Act, it will be a matter the discretion of the concerned AO whether he should process the return. 24. 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 hereaft .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ited by the petitioner to state that, it is one of the grounds, on which, the return has not been processed under Section 143 (1) of the Act. 14. The respondent has filed a counter affidavit, clearly stating that, he has not been influenced or guided by the CBDT's Instructions and is aware that Instruction has been quashed. It is the case of the respondent that, in exercise of his discretionary powers and in the light of the legal embargo under Section 143 (1 D) of the Act, the return cannot .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fact, the CBDT has itself issued Instruction 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ust 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 High Court issued a direction to consider the representation made by the petitioner within a time frame. 16. As pointed out earlier, the petitioner has filed these Writ Petitions for two assessment years (2015-16 & 2016-17). It has to be seen as to whether th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the one year from the end of the financial year, in which, the return is made. So far as the assessment year 2015-16 is concerned, the outer time limit for processing of return has expired by July, 2017, after which, the respondent is statutorily prevented from processing the return under Section 143 (1). However, this problem does not arise, insofar as the assessment for the year 2016-17 is concerned. 18. Thus, considering the law laid down by the Hon'ble High Courts of Delhi, Bombay an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

r having accepted the mistake and passed an order under Section 154 of the Act, and granted refund of ₹ 54,47,71,095, it would be a fit case, where, appropriate direction should be issued to the respondent. 19. In Corrtech International (P) Ltd. (supra), a more or less, identical issue arose for consideration before the Hon'ble High Court of Gujarat, wherein, the petitioner prayed for a direction to the respondent to release the refund in their favour for the assessment years 2015-16 a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 assess .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ction 1 of Section 143 of the Act, within the time frame, and if any refund arises, directed to grant the same. Sofar as the assessment year 2016-17 is concerned, no direction was issued, curtailing the statutory time limit. At this juncture, it would be relevant to quote certain paras of the said judgment (viz., in Corrtech International (P) Ltd. (supra), which is as follows:- " 17. This position would become clear if we compare the provisions of section 143 (1D) as amended by the Finance .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ted by a new proviso under which, it is clarified that the proviso under said sub-section shall not apply to any return furnished for the assessment year commending on or after 01.04.2017. Section 241 A which was inserted simultaneously, now enables the Assessing Officer to withhold the refund in favour of the assessee, which becomes due in terms of sub-section (1) of section 143, if he is of the opinion that, having regard to the fact that a notice has been issued under sub-section (2) of secti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nces, including in a situation where a notice has been issued or is likely to be issued under sub-section (2) of section 143 of the Act and the Assessing Officer is of the opinion that the grant of refund is likely to adversely affect 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 ret .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 either granting refund or indicating that, in terms of adjustments impermissi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

return under sub-section (1) of section 143 of the Act atleast once the assessee requests for release of the refund, and send as an intimation to the assessee if he wished to withhold the same. 22. Under these circumstances, the respondent- Assessing Officer is directed to complete the process of the assessee's return under sub-section (1) of section 143 of the Act latest by 31.10.2017. If any refund arises out of said exercise, grant the same to the petitioner as per the statutory provision .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hat, the time limit of one year from the end of the financial year is over, and the question of issuing an intimation under Section 143 (1) does not arise, as there is a statutory prohibition under second proviso to Section 143 (1). This is so, because, the return of income was filed by the assessee on 28.11.2015, and the period of one year expired on 31.03.2017. Apart from that, the Application/representation, dated 13.07.2017, given by the petitioner for grant of refund was received by the res .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version