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The Tax Publishers2020 TaxPub(DT) 3170 (Jp-Trib) INCOME TAX ACT, 1961
Section 240, Proviso (b)
In case of block assessment where initiation of proceedings are quashed, refund of tax is limited only to the extent of tax liability due to addition made by AO and not the tax paid by assessee on income declared by it while filing return in response to notice under section 158BC.
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Refund - Scope - Assessee seeking refund of tax paid on income declared in return filed in response to notice under section 158BC - Reason, quashing of proceedings under section 158BC on account of invalid notice
In quantum proceedings, High Court quashed proceedings initiated under section 158BC on the ground that notice issued under section 158BC by AO was invalid. Assessee claimed that once assessment was quashed by the High Court, tax paid by assessee on income declared in return of income filed in resposne to notice under section 158BC also became refundable because once notice issued under section 158BC itself was quashed then return filed by assessee in response to said notice was also not a valid return and was to be ignored. Held: In case of block assessment where initiation of proceedings are quashed, refund of tax is limited only to the extent of the tax liability due to the addition made by the AO and not the tax paid by assessee on the income declared by it while filing the return in response to notice under section 158BC. In the instant case, return of income was filed by assessee within mandatory period as provided under section 158BC was a valid return and there was no bona fide or apparent mistake in said return and thus declaration of income in return filed by assessee was a voluntary Act and admitted by assessee which could not be retracted subsequently only because initiation of proceedings under section 158BC was quashed by High Court due to technical defect in notice issued under section 158BC. Accordingly, tax paid on income declared in return was not refundable in view of clause (b) of proviso to section 240.
Applied:CIT v. Shelly Products & Anr. (2003) 261 ITR 367 (SC) : 2003 TaxPub(DT) 1281 (SC)
REFERRED :
FAVOUR : Against the assessee.
A.Y. : 1998-99
IN THE ITAT, JAIPUR BENCH
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