TMI Blog1999 (8) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... s and refunding the amount paid by the petitioner as advance tax which is in excess of the amount that might be due as per the assessments, if made, under section 147 of the Act. The material facts giving rise to this petition are as follows : The petitioner is an individual. For the assessment year 1987-88, he paid in three instalments, a sum of Rs. 66,750 by way of advance tax. Similarly, for the assessment year 1988-89, he paid, by way of advance tax, a sum of Rs. 51,709. No return, however, was submitted under section 139 of the Act for any of the above two assessment years. On March 23, 1991, the petitioner received two notices from the Income-tax Officer, Satara, under section 148 of the Act for these two assessment years. The petitioner submitted returns declaring an income of Rs. 1,02,700 and Rs. 75,200 for the assessment years 1987-88 and 1988-89, respectively. The tax due from the petitioner on the basis of the returns submitted pursuant to the notices under section 148 of the Act was less than the advance tax paid by him by Rs. 34,200 and Rs. 30,212 for the assessment years 1987-88 and 1988-89, respectively. The Income-tax Officer did not make any assessment order and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessment years and to refund the excess amount to the petitioner. Reliance is placed in support of this contention on the decision of the Full Bench of this court in CIT v. Indian Rare Earth Ltd. [1990] 181 ITR 22. Reliance is also placed on the decision of the Gauhati High Court in Kamalpur (Assam) Tea Estate Private Ltd. v. Superintendent of Taxes [1989] 175 ITR 142. Relying on the above decisions, learned counsel submits that refusal to refund the amount in such a case is violative of article 265 of the Constitution of India. Learned counsel also submits that the Board, which has powers to condone the delay in making the application for refund, has not exercised that power in a quasi-judicial manner. He, therefore, seeks a direction to the Board to condone the delay in making the application for refund and to the Income-tax Officer to complete the assessments under section 147 of the Act and/or to refund the amounts claimed by the petitioner. None appears for the Revenue. No affidavit has been filed by the Revenue. We have carefully perused the facts of the case and the submissions of learned counsel for the petitioner. The sole basis of the claim of the petitioner for ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent. The assessee cannot claim recomputation of the income or redoing of an assessment and be allowed a claim which he either failed to make or which was otherwise rejected at the time of original assessment which has since acquired finality. Of course, in the reassessment proceedings, it is open to an assessee to show that the income alleged to have escaped assessment has in truth and in fact not escaped assessment but that the same had been shown under some inappropriate head in the original return, but to read the judgment in V. Jaganmohan Rao's case [1970] 75 ITR 373 (SC), as laying down that reassessment wipes out the original assessment and that reassessment is not only confined to 'escaped assessment' or 'underassessment' but to the entire assessment for the year and starts the assessment proceedings de novo giving the right to an assessee to reagitate matters which he had lost during the original assessment proceedings, which had acquired finality, is not only erroneous but also against the phraseology of section 147 of the Act and the object of reassessment proceedings. Such an interpretation would be reading that judgment totally out of context in which the questions aros ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment cannot be reduced beyond the income originally assessed. There is no dispute about the fact that section 147 of the Act is applicable only to a case where the Income-tax Officer has reason to believe that the income has escaped assessment. In the instant case, the reassessment proceedings under section 148 of the Act were initiated by the Income-tax Officer for the two assessment years, viz., 1987-88 and 1988-89, by issuing notices under section 148 of the Act, obviously, because he was satisfied that the income of the petitioner had escaped assessment by reason of non-submission of the returns by the petitioner. In other words, in his opinion, the advance tax paid by the petitioner, which by virtue of section 219 of the Income-tax Act is treated as a payment of tax in respect of the income of the previous year, was less than the tax due by the petitioner. On receipt of the returns of the petitioner, the Income-tax Officer found that the income shown by the petitioner was less than the income shown by him for the purpose of advance tax and that by submission of the returns the petitioner claimed assessment at a figure lesser than the one disclosed by him for the purpos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is treated as payment of tax in respect of the income of the relevant previous year, the amount loses its character of advance tax and is treated as income-tax paid in respect of the income of the relevant previous year. In the present case, the advance tax paid by the petitioner lost the character of advance tax and became income-tax paid on his income of the relevant previous year. If the petitioner felt that the advance tax paid by him was more than the tax that would be correctly chargeable on his income, it was open to him to submit returns and get his assessments completed. On the failure of the petitioner to submit the returns of income for the two assessment years, the advance tax lost its character of advance tax and attained the character of tax paid by the petitioner for these two assessment years. On the basis of the returns submitted by the petitioner pursuant to the notices under section 148 of the Act for the two above assessment years, the petitioner sought to get the tax payable by him reduced below the amount paid by him by way of advance tax which, by virtue of legal fiction, had already attained the character of tax paid by him for those two assessment years. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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