Refund under Section 240 in block assessments applied as contended by Revenue; contrary High Court view rejected.

Section 240 of the Income-tax Act, 1961 was considered in the context of block assessment proceedings under Chapter XIV-B, with the related question whether taxes paid under a block return were refundable under Section 158BH. The issue was confined to the notice-backed question, and the Court treated it as settled in light of Shelly Products. On that basis, the statutory refund provision was applied in the manner urged by the Revenue, and the contrary view taken by the High Court was rejected; the question was answered in favour of the Revenue.

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Issues: Whether Section 240 of the Income-tax Act, 1961 applies to block assessment proceedings under Chapter XIV-B, and whether taxes paid pursuant to the block return are refundable in view of Section 158BH.

Analysis: The issue was confined to the question on which notice had been restricted. The Court held that the question was no longer debatable in light of the earlier decision in Shelly Products. On that basis, the statutory refund provision was treated as applicable in the manner contended by the Revenue, and the contrary view of the High Court was not accepted.

Conclusion: The question was answered in favour of the Revenue.

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