TaxTMI 
TaxTMI 
2017 (10) TMI 100
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....ring the financial year, the petitioner had deposited sizeable tax principally through suffering TDS at the hands of the payees. In the return, the assessee, therefore, claimed refund of Rs. 1.39 crores (rounded off). The Assessing Officer did not pass any order under section 143 (1) of the Income Tax Act, 1961 ['the Act' for short]. However, a notice under section 143(2) of the Act was issued on 12.04.2016. The assessment is pending before the Assessing Officer. 3. For the assessment year 2016-17, the petitioner filed the return of income on 15.10.2016 declaring a loss of Rs. 21.28 crores (rounded off) and claimed a refund of tax already paid of Rs. 1.58 crores (rounded off). The petitioner thereafter, filed a revised return on 13.04.2017 making minor changes which are not significant for our purpose. In response to such return, the department has, so far, neither passed order under section 143(1) of the Act nor issued notice under section 143(2) of the Act. 4. The case of the petitioner is that it is facing extreme financial hardship. On one hand, the petitioner suffers deduction of tax at source at the hands of the payees though due to the fact that the petitioner ....
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....sessment. Counsel relied on the following decisions: 1. In case of Group M Media India Pvt Ltd, Mumbai vs Union of India & Ors reported in 388 ITR 594; 2. In case of Tata Teleservices Ltd vs. Central Board of Direct Taxes and Anr reported in 386 ITR 30 7. On the other hand, learned counsel Mr. Bhatt for the department opposed the petition contending that for the assessment year 2015-16, the Assessing Officer has already issued notice under sub-section (2) of section 143. As per the then prevailing provision, it was thereafter not necessary for the Assessing Officer to proceed under sub-section (1) of section 143. Section 241A inserted by the Finance Act, 2017 must be seen in light of the corresponding changes made under sub-section (1D) of section 143. With respect to the assessment year 2016-17, counsel pointed out that the revised return was filed only on 13.04.2017 and the Assessing Officer, therefore, had sufficient time to process the return under section 143(1) of the Act. In any case, therefore, before such time limit was over, the assessee cannot claim refund on the basis of the return filed. 8. We may first refer to the statutory provisions and thereafter consi....
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....est; (d) an intimation shall be prepared or generated and sent to the assessee specifying the sum determined to be payable by, or the amount of refund due to, the assessee under clause (c); and (e) the amount of refund due to the assessee in pursuance of the determination under clause (c) shall be granted to the assessee: Provided that an intimation shall also be sent to the assessee in a case where the loss declared in the return by the assessee is adjusted but no tax [or interest] is payable by, or no refund is due to, him: Provided further that no intimation under this sub-section shall be sent after the expiry of one year from the end of the financial year in which the return is made. Explanation.-For the purposes of this sub-section,- (a) "an incorrect claim apparent from any information in the return" shall mean a claim, on the basis of an entry, in the return,- (i) of an item, which is inconsistent with another entry of the same or some other item in such return; (ii) in respect of which the information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of a deduction, where such deduct....
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....hall not be necessary, where a notice has been issued to the assessee under sub-section (2): Provided that the provisions of this sub-section shall not apply to any return furnished for the assessment year commencing on or after the 1st day of April, 2017.]" 11. Simultaneously, section 241A was inserted which reads as under: 241A. Withholding of refund in certain cases.-For every assessment year commencing on or after the 1st day of April, 2017, where refund of any amount becomes due to the assessee under the provisions of sub-section (1) of section 143 and the Assessing Officer is of the opinion, having regard to the fact that a notice has been issued under sub-section (2) of section 143 in respect of such return, that the grant of the refund is likely to adversely affect the revenue, he may, for reasons to be recorded in writing and with the previous approval of the Principal Commissioner or Commissioner, as the case may be, withhold the refund up to the date on which the assessment is made." 12. We may also notice that till 01.06.2001, section 241 of the Act enabled the Assessing Officer to withhold any refund under certain circumstances. Section 241, after the amend....
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....d provisions, therefore, the Assessing Officer could process the return under sub-section (1) of section 143 before the expiry of one year from the end of the relevant assessment year in which the return was filed after which, no such adjustment would be permissible. Under sub-section (1D), however, if notice under sub-section (2) of section 143 was issued to the assessee, it would not be necessary for the Assessing Officer to process the return under sub-section (1) within the time limit provided under the further proviso. However, if he desired to process the return under sub-section (1) the same would have to be done before issuance of an order under sub-section (3) of section 143. 15. A combined reading of the said provisions and in particular, sub-section (1D) of section 143 would demonstrate that once a notice under sub-section (2) of section 143 is issued, it would be discretionary for the Assessing Officer to process the return under section 143(1). The time limit envisaged in the further proviso to sub-section (1) would not apply but that the same can be done only before issuance of the order of assessment under sub-section (3). 16. Under such provision, therefore, i....
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....visions which were applicable in case of the petitioner-assessee post deletion of section 241 of the Act and prior to insertion of section 241A of the Act would authorize the Assessing Officer to withhold the refund arising out of a return filed by the assessee if an intimation was sent under sub-section (1) of section 143 after completing the processing of the return as envisaged therein. If notice under sub-section (2) of section 143 was issued, such time limit for processing would get extended till the passing of the order of assessment. However, the Revenue cannot contend that even though no intimation under sub-section (1) of section 143 was issued within the time envisaged and no notice under sub-section (2) of section 143 was issued, the Assessing Officer can sit tight over the refund claimed by the assessee arising out of the return filed. Mere issuance of notice under section 143(2) of the Act claiming extended period for processing refund under section 143(1), would not be sufficient to withhold refund. 19. In case of Tata Teleservices Ltd. (supra), the Delhi High Court considered the effect of a circular issued by the CBDT dated 13.01.2015 under section 119 of the Act....
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.... case for A.Y. 201516. [9] The only contention on behalf of the Revenue to oppose the petition is that as the Assessing Officer has time available to process the refund till 31st March. 2017 no mandamus can be issued till 31st March, 2015. We repeatedly asked of Mr Mohanty, the learned Counsel for the Revenue, if there was any reason why the return could not be processed before 31st March. 2017. No reasons are forthcoming from the Revenue as to why the Assessing Officer will not able to dispose of the application for refund or process the return under Section 143(1) of the Act before 31st March. 2017. This conduct / stand of the Assessing Officer, to say the least is most disturbing in the context of the fact that the petitioners have been seeking refund since April, 2016. First, he does not deem it proper to inform the petitioner in writing why he cannot deal with the application and after the petitioner moves the Court, the stand taken is that no direction can be given to him till 31st March. 2017 which is the last date to process the return under Section 143(1) of the Act. This attitude on the part of the Assessing Officer is preposterous. [10] The action of the officer on....