INCOME TAX ACT, 1961

Section 237 Section 143(1D) Section 241A/244A

Refund - Allowability - Initiation of proceeding under section 143(2) - Consequences under sections 143(1D) and 241A--Withholding of refund

Writ Petition was filed by the appellant in the High Court, praying for directing the Respondents to process and grant refunds for the assessment years 2014-15 to 2017-18, along with interest under section 244A. During the pendency of said Writ Petition, a letter was issued by the respondent No. 1 on 23-7-2018 stating that pending special audit, pending scrutiny, pending demands of amount of more than 4500 crore, it will prejudicial to the interest of revenue to process the returns without completion of the pending scrutiny cases. Therefore, exercising the powers under sections 143(1D) and 241A, the revenue decline the processing of returns under section 143(1). In the meantime, on 13-7-2018 a revised return was filed by the appellant for assessment year 2017-18 claiming refund of Rs. 744.94 Crores. A notice under section 143(2) was issued to the appellant on 10-8-2018 for assessment year 2017-18. By its judgment and Order, dated 14-12-2018, the High Court dismissed said writ petition. Held: Sub-section (1D) of section 143 does not contemplate either issuance of any intimation or further application of mind that the processing must be kept in abeyance. It would not, therefore, be proper to read into said provision the requirement to send a separate intimation under section 143(1). The issuance of notice under sub-section (2) of section 143 is enough to trigger the required consequence. Any other intimation is neither contemplated by the statute nor would it achieve any purpose. Consequently, the submission that the intimation dated 23-7-2018 must be held to be invalid, inter alia on the ground that it was issued well after the period within which the return was required to be processed under sub-section (1) of section 143, must be rejected. The requirements of section 241-A must be satisfied for assessment year commencing from 1-4-2017. Respondents sumitted that demands in respect of earlier assessment years including the liability as a result of Order, dated 28-12-2019 being outstanding, the respondents would be entitled to invoke the requisite power under section 245 to set off the amount of refund payable in respect of assessment year 2014-15 against tax remaining payable. Since the requisite action is not even initiated, this court say nothing in that respect. In the premises, court direct that the amount of Rs. 733 Crores shall be refunded to the appellant within four weeks from today subject to any proceedings that the Revenue may deem appropriate to initiate in accordance with law. There was no merit in any of the contentions advanced by the appellant.

Affirmed:M/s. Vodafone Mobile Services Ltd. v. Asstt. CIT & Anr. 2018 TaxPub(DT) 7830 (Del-HC)

REFERRED :

FAVOUR : Against the assessee.

A.Y. : 2014-15 to 2017-18

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