TaxTMI 
TaxTMI 
TaxTMI 
2016 (11) TMI 1014
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....total tax and interest payable in accordance with the provisions of the Act worked out to Rs. 113,60,91,737/-. Against this, the Petitioner claimed credit of prepaid taxes amounting to Rs. 27,63,84,333/-. Since the Petitioner was facing liquidity crunch at that point of time, the Petitioner, therefore, in the return of income showed Rs. 85,97,07,400/- as balance tax payable. The Petitioner also paid Rs. 65 Crores on different dates in April 2014 thereby leaving the balance of tax along with interest payable at Rs. 20,97,07,400/-. The Petitioner received notice dated 29.10.2014 issued by the Respondent under section 139(9) of the Act. By that notice, the revenue's position was that non-payment of tax and interest, as shown in the return of income, constituted 'defect' under Explanation (aa) to the proviso of section 139(9) of the Act. The Petitioner was therefore, required to rectify the defect within the specified period, failing which the return of income was to be treated as invalid return. As the defect was not rectified, the revenue issued a letter dated 03.11.2014 declaring the return of income filed by the Petitioner for the assessment year 2013-14 as invalid return under sec....
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....essed tax is due against the petitioner, the revenue is not clothed with the jurisdiction to recover any amount on that aspect. Mr. Vohra relies on K. Nagesh v Asst. Commissioner of Income Tax 2015 (376) ITR 473 (Kant) for saying that the amounts paid as advance tax are in fact refundable, because of Section 139 (9) read with Section 240A. Reliance is also placed on Telengana State Beverage Corporation Ltd v Union of India 2015 60 Taxmann.com 236. Mr. Vohra further states that after filing of the present petition, on 14.03.2015, the assessee filed a belated return, claiming total income of Rs. 139.60 crores, on which after adjusting amounts paid, a refund of over Rs. 21 crores was claimed. Later, during pendency of the present proceedings, search proceedings took place in the petitioner's premises, after which it received notice under Section 153A. In response, it filed its returns for the block period, including the assessment years in question in this case, whereby it claimed refund of Rs. 30.17 crores after claiming deduction under Chapter VI A of the Act. In these circumstances, the revenue has no authority to retain the amounts or insist upon the continuation of the attachment....
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....ct is not rectified within the said period of fifteen days or, as the case may be, the further period so allowed, then, notwithstanding anything contained in any other provision of this Act, the return shall be treated as an invalid return and the provisions of this Act shall apply as if the assessee had failed to furnish the return: Provided that where the assessee rectifies the defect after the expiry of the said period of fifteen days or the further period allowed, but before the assessment is made, the Assessing Officer may condone the delay and treat the return as a valid return. Explanation.-For the purposes of this sub-section, a return of income shall be regarded as defective unless all the following conditions are fulfilled, namely :- 16(a) the annexures, statements and columns in the return of income relating to computation of income chargeable under each head of income, computation of gross total income and total income have been duly filled in; [(aa) the tax together with interest, if any, payable in accordance with the provisions of section 140A, has been paid on or before the date of furnishing of the return;] (i) the tax, if any, claimed to have been deducted ....
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....lected at source; (c) any relief of tax or deduction of tax claimed under section 90 or section 91 on account of tax paid in a country outside India; (d) any relief of tax claimed under section 90A on account of tax paid in any specified territory outside India referred to in that section; and (e) any tax credit claimed to be set off in accordance with the provisions of section 115JAA or section 115JD; (ii) undersection 115WK shall be computed on the amount of tax on the value of the fringe benefits as declared in the return as reduced by the advance tax, paid, if any. (1B) For the purposes of sub-section (1), interest payable under section 234B shall be computed on an amount equal to the assessed tax or, as the case may be, on the amount by which the advance tax paid falls short of the assessed tax. Explanation.-For the purposes of this sub-section, "assessed tax" means the tax on the total income as declared in the return as reduced by the amount of,- (i) tax deducted or collected at source, in accordance with the provisions of Chapter XVII, on any income which is subject to such deduction or collection and which is taken into account in computing such total income; ....
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....nt of the Gujarat High Court, the Supreme Court observed that an assessee upon filing return under section 139 and payment of tax under section 140A by self- assessment, claiming allowance of the advance tax in the tax payable according to him admits the liability that has arisen under the Act to pay the tax on the total income as is computed by the assessee and duly quantified in the return. The court rejected the assessees' contention that upon invalidation of the return, such admitted liability should be refunded, as a "startling contention". The Supreme Court upheld the view that liability to pay tax arises because of Section 4 (1) which does not depend on an assessment order, but upon the rate or rates applicable for a given assessment year. The liability to pay tax arises on the total income on the publication of rates; such tax is to be computed by the assessee in accordance with the provisions of the Act. By the process of self-assessment, the assessee is required to pay tax on the basis of his return and such tax is treated as assessed tax. Therefore, until it is disturbed by any further regular assessment, it remains as tax levied and collected in accordance with law. Th....
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....essment is framed, which is later nullified in appeal or revision or other proceedings, any amount paid by way of income tax pursuant to the order of assessment, over and above the advance tax and self-assessment tax is undoubtedly refundable under Section 240 of the Act. The only dispute is with regard to the refund of the advance tax and self-assessment tax which is paid by the assessee on his own assessment of his liability and is based on the return of income filed by him. According to the revenue, the tax so paid represents the admitted liability of the assessee, and failure or inability to frame another assessment after the earlier assessment is set aside or nullified in appropriate proceedings, does not entitle the assessee to claim refund because to this extent the assessee has admitted his liability to pay tax in accordance with law. The tax liability is computed on the basis of the relevant Finance Act laying down the rate or rates at which the tax is payable and provides for other matters relevant to the computation of tax. Thus the tax is required to be paid in advance by the assessee, even before assessment is made, and he himself is required to compute his liability h....
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....ness of the return, which authority it has while framing a regular assessment. It must accept the return as furnished and shall not in any event raise a demand for payment of further taxes. Accepting the income as disclosed in the return of income furnished by the assessee, it must refund to the assessee any tax paid in excess of the liability incurred by him on the basis of income disclosed. Even if the tax paid is found to be less than that payable, no further demand can be made for recovery of the balance amount since a fresh assessment is barred. In other words, the tax paid by the assessee must be accepted as it is, and in the event of the tax paid being in excess of the tax liability duly computed on the basis of return furnished and the rates applicable, the excess shall be refunded to the assessee, since its retention may offend Article 265 of the Constitution. We cannot lose sight of the fact that the failure or inability of the revenue to frame a fresh assessment should not place the assessee in a more disadvantageous position than in what he would have been if a fresh assessment was made. In a case where an assessee chooses to deposit by way of abundant caution advance ....