Court Orders Refund of Excess Tax Paid for 1986-87 and 1987-88

The court allowed both petitions challenging the common order refusing refund for Assessment Years 1986-87 and 1987-88 under Article 226 of the Constitution of India. The court held that without a new assessment order, refund is due for excess tax paid, citing Section 240 proviso (a) and relevant case law. The Revenue's argument of non-receipt of the CIT(A) order was rejected, emphasizing the obligation to refund excess tax even if new assessment is time-barred. The court directed the respondents to refund the excess tax paid with interest for the respective assessment years.

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Issues:
Challenges to common order refusing refund for Assessment years 1986-87 and 1987-88 under Article 226 of the Constitution of India.

Analysis:
1. The petitions challenge a common order refusing refund based on proviso (a) to Section 240 of the Income Tax Act, as fresh assessment was not made.
2. The facts of both petitions are similar, with the petitioner seeking refund for Assessment Year 1987-88 due to excess tax payment.
3. The CIT(A) set aside the assessment order for 1987-88, but no reassessment was done by the Assessing Officer by the deadline.
4. The petitioner requested refund, citing failure to pass a new assessment order and the excess tax paid.
5. The petitioner argued that the Revenue was unlawfully retaining their property without legal authority.
6. The Revenue contended that without a new assessment order, no refund could be granted as per Section 240 proviso (a).
7. The court analyzed Section 240 and noted that refund is due without a claim post-appeal, with provisos for fresh assessments and excess tax payments.
8. Referring to the Supreme Court decision in CIT v. Shelly Products, the court emphasized that failure to make a fresh assessment deems acceptance of the return and requires refund of excess tax paid.
9. The court rejected the Revenue's argument of non-receipt of the CIT(A) order, stating the Assessing Officer could have obtained it and must follow the remand directions.
10. Citing a similar Punjab & Haryana High Court case, the court emphasized that the Revenue must refund excess tax paid even if a new assessment is barred due to time limitations.
11. Consequently, both petitions were allowed, directing the respondents to refund the excess tax paid for the respective assessment years along with interest.

This detailed analysis of the judgment addresses the issues involved, the arguments presented by both parties, and the court's interpretation of the relevant legal provisions to reach the decision in favor of the petitioner.

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