TMI Blog1984 (1) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... determined at Rs. 28,247, which was deposited by the assessee. Similarly, for the assessment year 1963-64, for which the previous year ended on Diwali 1962, the taxable income shown in the return filed by the assessee was Rs. 55,617 and Rs. 23,566 was the tax determined under s. 141 in the provisional assessment, which was deposited by the assessee. Thereafter, the assessee, Badri Prasad Gour, died on November 7, 1964. Regular assessment by the ITO was then made under s. 143(1) of the Act. The assessee's legal representatives then preferred an appeal to the AAC against the regular assessment for both the assessment years. The AAC reduced the taxable income but did not set aside the regular assessment. On further appeal, the Tribunal cancelled the regular assessment for both the years on the ground that the legal representatives were not noticed by the ITO before making the regular assessment after the death of the assessee, Badri Prasad Gour. The ITO then made a consequential order for both the assessment years showing therein the revised income as nil. However, a note was also appended to this order passed by the ITO, in which it was stated that the amounts deposited by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny assessment year. Section 238 specifies the persons entitled to claim refund in certain cases. Section 239 provides for the claiming of refund as well as limitation for it. Section 240 lays down that where refund of any amount becomes due to the assessee as a result of any order passed in appeal or other proceeding under this Act, the ITO shall refund the amount to the assessee without his having to make any claim in that behalf. The remaining sections contained in this Chapter are not relevant for our purpose. Sections 237, 239 and 240, which alone are relevant in this context for our purpose, read as under: " 237. Refunds.-If any person satisfies the Income-tax Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess. 239. Form of claim for refund and limitation.-(1) Every claim for refund under this Chapter shall be made in the prescribed form and verified in the prescribed manner. (2) No such claim shall be allowed, unless it is made within the period specified hereun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no dispute that the assessee is entitled to the refund of the aforesaid amounts as a result of cancellation of the regular assessments for both the assessment years and the assessment proceedings ending with the determination of the revised income nil by the ITO, pursuant to the Tribunal's decision cancelling the regular assessments. The only question is whether after determining the tax liability as nil the ITO's further direction refusing refund of the tax already deposited, which had become refundable, falls within the purview of s. 237, so as to be appealable under cl. (n) of s. 246 of the Act. The scheme of the relevant provisions may now be examined. Section 237 lays down the entitlement for refund of the amount of tax which exceeds the amount with which the assessee is properly chargeable under the Act. This entitlement arises as a result of any amount in deposit being found in excess of the tax ultimately assessed as properly chargeable under the Act. Obviously a direction of the ITO for refund of the excess amount is contemplated to give effect to the assessee's right of getting back refund of the excess amount. Clause (ii) of s. 246 of the Act confers a righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly and no further satisfaction of the ITO is contemplated. On the above construction made by us of the aforesaid relevant provisions of the I.T. Act, 1961, it is clear that the order of the ITO, in both these references, refusing to refund the amounts of tax deposited by the assessee, which became refundable on assessment of the income as nil by the ITO, after the Tribunal's order cancelling the regular assessments, is, in substance, an order made under s. 237 of the Act. The ITO, by virtue of s. 240, was required to make that refund and the assessee was not required to prefer any claim for refund in the manner prescribed in s. 239. The appeal preferred by the assessee to the AAC was, therefore, an appeal which fell within the ambit of clause (n) of s. 246 of the Act, as the order of the ITO, refusing to refund the amount for both the assessment years, which was in excess of his tax liability determined for these years, was an order under s. 237 of the Act. The mere fact that the obligation imposed by s. 240 of the Act upon the ITO to refund the amount to the assessee without his having to make any claim in that behalf, can be enforced even by a writ of mandamus under art. 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (7) of s. 141, applicable at the relevant time, which has been deleted., with effect from April 1, 1971, which prohibited any appeal against a provisional assessment made under sub-s. (1) of s. 141. The reason for prohibiting such an appeal obviously was that such provisional assessment did not bind either the assessee or the Revenue and an appeal is provided against the regular assessment at the end of the assessment proceeding. The prohibition contained in s. 141(7) did not apply to the present case, because the appeal preferred was not against the provisional assessment but against the order of the ITO at the end of the assessment proceeding, refusing to refund the amount in deposit in excess of the tax liability determined in the assessment proceeding. As a result of the aforesaid discussion, it follows that both these references must be answered in the affirmative, in favour of the assessee and against the Revenue as under: " In the facts and circumstances of the case, the appeal filed by the applicant before the Appellate Assistant Commissioner of Income-tax was maintainable under section 246 of the Income-tax Act, 1961." Parties will bear their own costs. - - T ..... 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