TMI Blog1964 (12) TMI 7X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellant must fail. Therefore, agreeing with the High Court, we hold that section 49E of the Act is of no assistance to the appellant and that the petition was rightly dismissed by the High Court. The appeal accordingly fails and is dismissed - - - - - Dated:- 10-12-1964 - Judge(s) : P. B. GAJENDRAGADKAR., M. HIDAYATULLAH., J. C. SHAH., S. M. SIKRI., R. S. BACHAWAT JUDGMENT The judgment of the court was delivered by SIKRI J.--This is an appeal on a certificate granted by the High Court of Bombay against its judgment dated February 24, 1961, dismissing the petition filed by the appellant under article 226 of the Constitution of India. This appeal raises a short question as to the construction of section 49E of the Ind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellant stated in the petition that " unfortunately the company's assessment for the year in question was completed by the Income-tax Officer on the last day of the financial year 1953-54, i.e., March 31, 1954, being the last date on which their claim for double income-tax relief should have been lodged. In the absence of the assessment order being received by the company it was not physically practicable for the assessee to lodge its claim for double income-tax relief and as such the time prescribed under section 50 had already expired when the assessment order was received by the company. " The Commissioner made some enquiries. The appellant, in its letter dated June 30, 1958, replied that no provisional claim for double income-tax relie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation Relief) (Ceylon) Rules, 1942, and read with the provisions of sections 49A and 48 of the Income-tax Act, in respect of the assessment years 1942-43, 1943-44 and 1944-45, relating to Ceylon, and the assessment years 1947-48 and 1949-50 relating to Kolhapur and Kapurthala, against the said demands. In this letter the appellant gave arguments in support of its request. In short, the argument was that although the applications claiming those refunds were submitted beyond the prescribed time-limit, nevertheless the appellant had a right still, pursuant to the provisions of section 49E, to call upon the Income-tax Officer to set off the refunds found to be due to the appellant against the tax demands raised by the Income-tax Officer on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t tax the refunds due to the petitioner under the aforesaid double-tax relief rules. It will be noticed that no prayer was made for quashing the order of the Commissioner, dated August 23, 1958, and the order of the Central Board of Revenue dated December 31, 1958. It was indeed contended by Mr. S. P. Mehta, the learned counsel for the appellant before the High Court, that the appellant was not challenging the orders of the Income-tax Officer rejecting his application for refund, but was only challenging the orders made by them rejecting its application for grant of set-off. Mr. Viswanatha Sastri, the learned counsel for the appellant, first urged that as compliance with rule 5 of the Indian States Rules, 1939, was physically impossible, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff. " Mr. Sastri contends that it is not necessary that there should be a prior adjudication to enable a person to claim set-off. He says that the Income-tax Officer can decide the question whether refund is due or not when an application for refund is made to him. On the facts, he says that it is clear that the appellant is entitled to refund under rule 3 of Indian States Rules, 1939, and the Income-tax Officer has only to calculate the relief due and then set it off. The learned counsel for the respondent, Mr. Ganapathi Iyer, on the other hand, contends that the orders of the Commissioner and the Central Board of Revenue having become final, there was no obligation on the Income-tax Officer to make any payment of refund, and he says th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essarily lead to the conclusion that there must be a prior adjudication. But this is not enough to sustain the claim of the appellant. It must still show that a refund is due to it. The words " found to be due " in section 49E may possibly cover a case where the claim to refund has been held barred under rule 5 of the Indian States Rules but that this is not the correct meaning is made clear by the expression " in lieu of payment ". This expression, according to us, connotes that payment is outstanding, i.e., that there is subsisting obligation on the Income-tax Officer to pay. If a claim to refund is barred by a final order, it cannot be said that there is a subsisting obligation to make a payment. The expression " in lieu of " was constru ..... X X X X Extracts X X X X X X X X Extracts X X X X
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