TaxTMI 
TaxTMI 
2021 (8) TMI 383
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.... refund of the entire tax deducted at source amounting to Rs. 18,31,42,676/-. On 22nd November, 2019, the assessee received a notice under the provisions of Section 143(2) of the Income Tax Act, 1961(hereinafter referred as the said Act). 2) The assessee received another intimation from the respondent no.4 on 13th November, 2019 regarding the assessment under the provisions of Section 143(1) wherein it was declared that the principal refund amount to be Rs. 18,31,42,676/- as assessed by the concerned Assessing Officer. The total income tax refund for the assessee for the assessment year 2018-2019 after addition of interest of Rs. 1,83,14,260/- under the provisions of Section 244A of the said Act was computed as Rs. 20,14,56,936/- . A refu....
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....und of the assessee and/or any part thereof was made. The petitioner was, therefor, compelled to file the present writ petition. 5) It is further submitted on behalf of the petitioner that the petitioner became entitled to refund on 13th November, 2019 when the assessment was made. At that point of time there was no demand as against the petitioner for which the refund could have been withheld under Section 241A. The demand to which the revenue is now referring to, for invoking the provision of Section 245 of the said Act came into existence only on 27th February, 2020 that is about almost a year after the date when the refund was required to be made. The concerned authority in any event according to the petitioner could have withheld the ....
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....e revenue. In the instant case, the petitioner was issued a notice for refund on 13th November, 2019 after the assessment on scrutiny proceeding for the assessment year 2018-19 was completed but the refund was withheld without assigning any reason. The assessment for the assessment year 2018-19 may have taken some time and was completed by 13th November, 2019 when the refund was notified but at that point of time there was no other demand pending against the petitioner/assessee either for a previous or subsequent period. 8) The very essence of passing of the order under Section 241A is application of mind by the Assessing Officer to the issues which are germane for withholding the refund on the basis of statutory prescription contained in ....
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....fund is likely to adversely affect the revenue. 10) The scope of the power under Section 241A is narrow, making it clear that a speaking order is required to be passed culling out the reasons as to how the grant of refund is likely to affect the revenue. The recording of reasons to substantiate why such withholding is necessary and how the refund will adversely affect recovery of subsequent revenue is essential. "Reasons" have been described by the Hon'ble Supreme Court in AIR 1974 SC 87 Union of India vs. Mohan Lal Capoor, as "Reasons are the links between the materials on which certain conclusions are based and actual conclusions. They should reveal a rational nexus between the facts considered and conclusions reached." No reasons were ....
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....IR 1936 PC 253, "if a statute provides an act to be done by a particular authority and in a particular manner, it should only be done by that authority and in that manner or not at all.", the Competent Officer being authorised under the statute to withhold the refund if he has reasons to believe that the same will adversely affect the revenue can or could have withheld the refund after the same had been declared only after assigning reasons and not otherwise. In the instant case, the Assessing Officer withheld the refund without assigning any reason though the statute mandates for recording the same. Having not done so the officer concerned has acted arbitrarily. The procedure followed by the Assessing Officer does not also show the proper ....