Taxpayer wins revised return case for TDS credit on land compensation despite 6-year limitation challenge

Delhi HC allowed writ petition challenging rejection of revised tax return application for TDS credit on enhanced land acquisition compensation. Revenue rejected application citing 6-year limitation under Circular 09/2015. Court held that revised return with tax certificate need not be furnished if certificate produced before AO within two years from AY end. AO required to amend assessment order under Section 155(14). Petitioner entitled to refund under Section 237 where excess tax paid. Court quashed impugned order, directed respondents to accept revised return within four weeks and process refund considering statutory interest provisions.

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Issues:
Challenge to rejection of application for revised tax return and delay condonation.

Analysis:
The petitioner filed a writ petition seeking relief after the rejection of the application to submit a revised return for AY 2010-11 and condone the delay under Section 119(2)(b) of the Income Tax Act, 1961. The principal challenge was against the order dated 23 October 2018, which denied the petitioner's request (Para. 2).

The petitioner had filed the original return for AY 2010-11 on 24 June 2010, but the TDS credit was not reflected in Form 26AS due to compensation received under the Land Acquisition Act, leading to discrepancies (Para. 3-4). The petitioner approached the court seeking direction for TDS credit, which was granted, and a revised Form 16A was issued by the Land Acquisition Collector (South) (Para. 5-6).

The respondents rejected the application based on Circular No. 09/2015, citing a limitation of 6 years for such claims, which the court found untenable as it imposed a restriction on the court's jurisdiction under Article 226 of the Constitution (Para. 7-9). The court also criticized the reliance on the circular, emphasizing that no limitation applies to the court's extraordinary jurisdiction (Para. 10-11).

The court highlighted the statutory provisions under Section 199 and Section 155(14), stating that a revised return need not be filed if the tax certificate is produced within two years from the end of the AY, and the AO must amend the assessment accordingly (Para. 13-15). Additionally, Section 237 allows for refunds if the tax paid exceeds the proper chargeable amount, emphasizing the right of the assessee to claim a refund (Para. 16-17).

The respondents' reliance on Section 239 was countered by the court, noting the amendments and the respondents' oversight of the fresh certificate issued post-court direction (Para. 18-20). The court also pointed out the responsibilities of the person deducting tax under Sections 204 and 205, holding that the assessee cannot be directly demanded to pay the tax (Para. 21-22).

Consequently, the court allowed the writ petition, quashed the impugned order, directed the acceptance of the revised return, and instructed the respondents to process the refund request within four weeks, considering the relevant provisions of the Act (Para. 23-25).

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