TMI Blog2018 (9) TMI 80X X X X Extracts X X X X X X X X Extracts X X X X ..... acceptance of the return of income furnished by the assessee stands and holds good and consequently, any tax paid either along with the return or later under any circumstances would certainly fall under the purview of "tax chargeable on the total income returned by the assessee" as referred to in Proviso (b) of Section 240 of the said Act. Consequently, whatever the amount paid by the assessee in cases of the tax chargeable on the total income more than returned by the assessee alone could be refunded and not a full refund. This is what happened in the present case. Admittedly, the Revenue has refunded a sum of ₹ 6,46,454/-, being the excess tax paid by the assessee. Hence, the tax paid by the Assessee on the admitted return filed by him cannot be refunded and thus, the respondents are justified in rejecting such claim. - Decided against assessee - W.P.No.41940 of 2006 MP No.1 of 2012 - - - Dated:- 28-8-2018 - K. Ravichandrabaabu, J. For the Petitioner : Mr. M. P. Senthilkumar For the Respondents : Mr. A. P. Srinivas ORDER The petitioner is aggrieved against the orders of the second respondent dated 02.02.2006 and 05.05.2006, through which his reques ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the entire tax paid is erroneous. The second respondent failed to accept the contentions made by the petitioner in this regard. Therefore, the present writ petition is filed questioning the action of the second respondent in not refunding the entire tax paid by the petitioner. 3.The respondents filed a counter affidavit, wherein it is stated as follows: A search and seizure proceedings took place in the case of M/s.Samyuktha Foundation Pvt. Limited, in which the assessee represented by the Kartha is a promoter and shareholder. The search brought to light that the assessee made certain investments out of its undisclosed income. Therefore, proceedings under Chapter XIV B of the Act were initiated by issuing notice under Section 158 BD on 09.08.1996. In response to the said notice, the petitioner filed its return of income on 10.09.1996, admitting a sum of ₹ 24,04,830/- as its undisclosed income. The return filed by the petitioner was in response to the said notice, a statutory requirement. The assessee, in its return, furnished the details of total income as well as undisclosed income. Non payment of tax along with the return does not vitiate the validity of the return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.Mr.M.P.Senthilkumar, learned counsel for the petitioner made his submissions. He also filed written submission. The sum and substance of submissions made on behalf of the petitioner are as follows: The return of income filed by the petitioner on 10.09.1996, pursuant to the notice under Section 158 BD of the Act, without payment of tax, was not valid in the eye of law. Therefore, any amount paid by the petitioner was not based on any valid return of income . Once the assessment is annulled, no tax is chargeable on the total income returned by the assessee. Consequently, the full amount paid by the petitioner is liable to be refunded together with interest under Section 244. The entire tax was paid only pursuant to the demand and recovery action by the Department and not paid with the return and therefore, the tax paid is not covered by the proviso under Section 240. The decision of the Hon'ble Supreme Court relied on by the Revenue in the case of CIT vs Shelly Products and another, reported in 261 ITR 367, is distinguishable on facts and thus, the same would not apply to the present case. The tax paid in cases of tax chargeable on total income returned by the assessee woul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court made in the case of Commissioner of Income Tax vs. Shelly Products, 261 ITR 367. 11. There is no dispute to the fact that in pursuant to the search and seizure action, in the case of a Company called Samyuktha Private Limited, wherein the petitioner assessee represented by its Kartha, is a shareholder, a notice under Section 158BD of the said Act, was issued to the petitioner on 09.08.1996. It is also not in dispute that in response to the said notice, the petitioner filed its return of income on 10.09.1996, admitting a sum of ₹ 24,04,830/- as its undisclosed income. Even though it is contended before this Court as though filing of such return was under pressure of the officials of the Revenue, this Court is not in a position to appreciate the said contention, in the absence of any materials substantiaing such allegation, more particularly, in the absence of any challenge by the petitioner against further proceedings in pursuance of such notice. 12. On the other hand, as rightly contended by the Revenue, the statutory obligation vested on the part of the assessee was discharged by filing a return with true and correct particulars of the total income including the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax paid in case of tax chargeable on the total income returned by the assessee and not to the entire tax paid by the assessee including the tax chargeable on the total income including the tax chargeable on the income returned by the assessee. In otherwords, if the assessee has filed his return admitting certain amount as total income, such admission is binding on the assessee, even though the consequential assessment made is annulled later. To put it more precisely, an assessee, who admitted the income in his return as the total income, is not entitled to retract such admission or go against such admission, merely because the assessment made based on such return, was subsequently annulled. The annulment of the assessment, at the best, may result in refund of excess tax levied by way of such assessment over and above the admitted tax paid. Therefore, on any account, the assessee cannot be heard to say that even in respect of admitted liability, the assessee is entitled to refund of tax paid on such liability, once the assessment is set aside or annulled later. 16. At this juncture, it is to be noted that what was set aside or annulled by the competent forum, was only the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same subsequently. Therefore, a defective return filed by the assessee in this case has become valid return on payment of tax subsequently on notice from the Assessing Officer. Thus, the return filed by the assessee had not become invalid return at any point of time. Consequently, the tax paid on the admitted income shown in such return is not liable to be refunded, as prohibited under Section 240(b) of the said Act. 19. It is relevant to note at this juncture that the very same issue was already considered by the Apex Court in the case of Commissioner of Income Tax vs Shelly Products Another, 261 ITR 367, wherein it was held 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 pay such tax. The asseessees do not contend that the tax of which refund is claimed was not chargeable or payable, but claim refund on the sole ground of the failure of the authorities to pass an order of assessment. Having considered the authorities on the subject, we find ourselves in agreement with the view of the Gujarat High Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ilarly, 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 and its mode of recovery are authorized by law. The liability to pay income-tax chargeable under section 4(1) of the Act thus, does not depend on the assessment being made. As soon as the Finance Act prescribes the rate or rates for any assessment year, the liability to pay the tax arises. The assessee is him ..... X X X X Extracts X X X X X X X X Extracts X X X X
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