TaxTMI 
TaxTMI 
TaxTMI 
2024 (2) TMI 991
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....l Refundable Amount of Rs. 3,13,680/- already paid to the petitioner and pay the difference in amount of New Total Refundable Amount less Total Refundable Amount already paid to the petitioner after new calculation. (iv) Any other relief/direction/order as this Hon'ble Court deems fit and proper looking to the present facts and circumstances of the case. (v) Cost of the petition may also kindly be awarded in favour of the petitioner. Brief facts of case : 2. Present case is having chequered history and brief facts suffice to decide present petition are that petitioner, Gurmit Singh Vilkhu was an employee of Punjab and Sindh Bank and was placed under suspension by Bank in a departmental enquiry on 29.02.1996 and ultimately terminated. 2.1 Order of termination was challenged by petitioner before this Court successfully and this Court by order dated 04.07.2008 passed in M.C.C. No. 960/2007 arising out of Writ Appeal No.901/2006 set aside termination and ordered to treat petitioner as an employee under suspension from 01.03.1996 to 16.04.2007 and to pay 'subsistence allowance' for the said period. 2.2 Bank calculated subsistence allowance amounted of Rs. 20,90,354.96 for th....
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....ying with the directions, matter was again referred to JCIT, who declined to grant refund by order dated 25.05.2016 stating that in return filed by petitioner for A.Y. 2009-2010, income was disclosed as NIL and no refund was claimed. JCIT held that A.O. erred in allowing relief and order passed by A.O. was not legally correct. According to JCIT when income in return filed for A.Y. 2009-2010 was disclosed as NIL, no assessment order could be passed and no relief could be accepted on the basis of application filed by assessee later on. 2.8 JCIT also observed that assessee (petitioner) has accepted order of appeal passed by CIT (A)-I, Jabalpur on 01.10.2012 and not challenged before any forum and original order passed by A.O. on 30.08.2011 under Section 154 of IT Act was also merged with appeal order and these orders have attained finality and could not be revised by A.O. subsequently. 2.9 In furtherance of order passed by JCIT, on 09.05.2017, ITO, Ward-1(1), Jabalpur issued a notice under Section 154/155 of IT Act informing petitioner that order dated 05.12.2014 needs to be rectified by withdrawing relief of Rs. 2,81,797/- allowed u/s 89(1) and to revise total income from Rs. 20,87....
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....nterest." 2.13 In compliance of order passed in W.P. No. 9494/2017 on 14.02.2019 letter No. ITO/WD.1(1)/JBP/GSV/2019-20 dated 23.5.2019 (Annexure P-1) and calculation sheet were issued by respondent no. 2, whereby after considering the provisions of Section 244 of IT Act, amount of Rs. 2,05,030/- was found refundable after adjusting claim of relief under Section 89 (1) of IT Act along with interest of Rs. 108650 calculated @ 0.5% per month. It is not in dispute that said amount of Rs. 3,13,680/- was paid to petitioner on 29.04.2019 by direct credit in his saving bank account. Being dissatisfied with aforesaid calculation, petitioner has preferred present petition. 3. With the consent of parties, matter is heard finally. Petitioner's submissions: 4. Petitioner Shri Gurmit Singh Vilkhu submits that this Court by order dated 14.02.2019 quashed show cause notice dated 09.05.2017 and subsequent order dated 01.08.2017 with a direction to refund amount as mentioned in order dated 05.12.2014 passed by ITO, whereby petitioner was found entitled to claim benefit under Section 89(1) of IT Act, therefore, principal refundable amount should be equallent to the amount of relief Rs. 2,81,79....
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....lanation to clause (ii-a) of Section 57, being paid in arrears, due to which his total income is assessed at a rate higher than that at which it would otherwise have been assessed, the Assessing Officer shall, on an application made to him in this behalf, grant such relief as may be prescribed: Provided that no such relief shall be granted in respect of any amount received or receivable by an assessee on his voluntary retirement or termination of his service, in accordance with any scheme or schemes of voluntary retirement or in the case of a public sector company referred to in sub-clause (i) of clause (10-C) of Section 10, a scheme of voluntary separation, if an exemption in respect of any amount received or receivable on such voluntary retirement or termination of his service or voluntary separation has been claimed by the assessee under clause (10-C) of Section 10 in respect of such, or any other, assessment year." 6.1 Apex Court in the matter of K.C. Joshi v. Union of India, (1985) 3 SCC 153 after considering provisions of section 89 of IT Act held as under : "17. Now that the amount is being paid in one lump sum, it is likely that the employer may take recourse to Sect....
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....y the assessee or if the tax already paid was more than the amount of tax comes after adjustment of relief, the same will be refunded to the assessee. 6.3 An assessee is entitle for claim of relief under Section 89 which provides that if assessee has received any amount in nature of salary and same was paid in arrears or in advance or is in receipt of anyone financial year of salary more than 12 months, the assessee may claim relief to avoid payment of income tax to be assessed at a rate higher than that at which it would otherwise have been assessed. Meaning thereby, if assessee has received any sum in the nature of salary which was not for the assessment year, he may claim relief for not adding said amount for the purpose of assessment of income tax payable on the amount of salary received for the relevant financial year and be spread over in all relevant assessment years for the purpose of calculation of Income Tax. The relief under Section 89 is to be considered at the time of calculating payable amount of tax. There is no such provision in IT Act to refund the amount of relief granted under Section 89 as it is. There may be situation wherein even after adjusting / grant of re....
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....itioner submits that IT Department has not allowed refund according to Section 89 of IT Act as ordered by this Court on 14.02.2019 in W.P. No. 9494/2017. Order passed under Section 154 of IT Act on 05.12.2019 (Annexure P-6) reflects that relief under Section 89 was to be calculated on amount of Rs. 20,87,089/-. Petitioner has claimed amount of relief to Rs. 2,81,797/- under Section 89 and it appears that for the purpose of calculation of refundable amount in impugned communication (Annexure P-1) and the calculation sheet attached to the communication, relief amount u/s 89 was considered as Rs. 2,81,797/- equallent to the amount claimed by petitioner. The same amount was calculated by Chartered Accountant of this Court, however, petitioner is claiming amount of relief as refundable amount, whereas relief amount and refundable amount are two different figures. Total amount received by petitioner during the assessment year was Rs. 20,90,355/- out of which deduction was allowed under Section 80 C to the tune of Rs. 3266/ and after deducting the said amount aggregate income comes to Rs. 20,87,090/-. 7.4 When tax was calculated on aggregate income of Rs. 20,87,090/-, gross tax comes to ....
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....ions of this section, be entitled to receive, in addition to the said amount, simple interest thereon calculated in the following manner, namely: (a) where the refund is out of any tax collected at source under Section 206-C or paid by way of advance tax or treated as paid under Section 199, during the financial year immediately preceding the assessment year, such interest shall be calculated at the rate of one-half per cent for every month or part of a month comprised in the period,- (i) from the 1st day of April of the assessment year to the date on which the refund is granted, if the return of income has been furnished on or before the due date specified under sub-section (1) of Section 139; or (ii) from the date of furnishing of return of income to the date on which the refund is granted, in a case not covered under sub-clause (i): Provided that where refund arises as a result of an order passed by the Assessing Officer in consequence of an application made by the assessee under sub-section (20) of Section 155, such interest shall be calculated at the rate of one-half per cent. for every month or part of a month comprised in the period from the date of such applicat....
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....refund to individuals any sum paid by them as taxes which are found to have been wrongfully exacted or are believed to be, for any reason, inequitable. The statutory obligation to refund carried with it the right to interest also. This is true in the case of the assessee under the Act." 8.2 In the matter of K. Lakshmanya & Co. v. CIT, (2018) 11 SCC 620 Apex Court held that "a corresponding right exists, to refund to individuals any sum paid by them as taxes which are found to have been wrongfully exacted or believed to be, for any reason, inequitable. The statutory obligation to refund, being non-discretionary, carries with it the right to interest, also making it clear that the right to interest is parasitical. The right to claim refund is automatic once the statutory provisions have been complied with". 8.3 Payment of interest is statutory obligation and cannot be denied. Interest has been calculated by respondent accordance with section 244A(1)(a)(ii) of IT Act, whereas the present case would fall outside clauses (a) and (aa) of this provision and therefore fall within the residuary clause namely clause (b) of section 244A(1). Petitioner has claimed interest complaining that ....