Self-assessment tax on admitted income is not refundable merely because the assessee later disputes the correct assessment year.

Tax paid on admitted income under self-assessment remains recoverable where the income is otherwise chargeable to tax, and a later change of stand on the correct assessment year does not by itself create a refund right. The Madras High Court noted that the assessee had voluntarily returned the income and paid tax and interest, and held that setting aside a regular assessment addition does not automatically nullify that self-assessment tax. It rejected the attempt to treat a mistaken disclosure or subsequent objection to the year of taxation as a basis for refund, and upheld rejection of the refund claim.

---

---

Issues: Whether tax paid on admitted income through self-assessment could be refunded merely because the assessee later contended that the income was assessable in a different assessment year and the regular assessment addition had been set aside.

Analysis: The claim for refund was examined in the light of the nature of self-assessment under the Income-tax Act, 1961 and the settled principle that liability to tax arises from the charging provisions, not from the assessee's later change of stand. The Court noted that the income in question was admittedly chargeable to tax and had been voluntarily returned and tax paid, together with interest, by the assessee. It further held that setting aside a regular assessment or an addition does not automatically nullify the self-assessment tax already paid on admitted income. The Court relied on the distinction between lawful tax planning and impermissible tax avoidance, and rejected the contention that the assessee could claim refund on the basis of a mistaken disclosure or later objection to the assessment year.

Conclusion: The assessee was not entitled to refund of the tax paid on admitted income, and the rejection of the refund request was upheld.

Ratio Decidendi: Tax paid on admitted income under self-assessment remains a valid recovery where the income is otherwise chargeable to tax, and it is not refundable merely because the assessee later contends that the income was assessable in a different year or that the regular assessment addition was annulled.

---