TaxTMI 
TaxTMI 
2026 (6) TMI 1180
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....S amount was confirmed and the claim of refund of Rs.17,08,200/- on account of TDS deducted as income from house property was denied on the ground that assessee could not e-verified the Income Tax Return within stipulated period. 2. The facts in brief as culled out from para 2.1 to 2.3 of the impugned order are as under: "2.1 The assessee is an Individual. He continued to derive income from house property, business income from finance and interest on deposit. Return of income for assessment year 2015-16 under section 139(1) of IT Act 1961 was filed on 03/09/2015 vide Ack. no. 771174300030915 declaring Nil income. Refund of Rs. 17,08,200 was claimed on account of advance tax paid and TDS deducted out of rental income. The income ....
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.... being e-verified and is, therefore, a valid return of income. The return of income has not been processed under section 143(1) of IT Act. It has been left as it is. No refund due of Rs.17,08,202 was issued. 2.2 The assessee had filed applications so many times for issue of refund of Rs 17,08,202. No action on the same was taken. Thereafter the assessee had filed Grievance application on 12/02/2024 vide Ack. No. 16158243. The assessee had also filed an application under section 154 at ASK Counter on 20/02/2024 vide Ack. No. 41451235052 for issue of refund of Rs. 17,08,202. The ACIT, vide disposal of Grievance application and rectification application under section 154 on 30/04/2024, has rejected the request of issue of refund on th....
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....rn verification is a statutory requirement, and failure to verify before the due date means that the ITR is invalid/unfiled, thus resulting in no legal assessment and therefore, it is ineligible for refund. As per, Section 143(1), Refunds can only be initiated after processing a valid, verified ITR. If the ITR is unverified, CPC cannot process the return or compute any refundable claim. The only option for the assessee is to Apply for condonation of delay in verification to the CPC or to the JAO under Section 119(2)(b) and if the approval of condonation is received, then the refund maybe released. JCIT(Appeals) does not have the authority to grant condonation of delay. Hence, the grounds of the assessee a....
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....ee. It is further submitted that there is no provision in the Act which would permit the AO/CPC to deny the refund and the credit given for the TDS amount deducted as per mandate of section 199 of the Act. Lastly, it is submitted that the condonation application for late e-filing was moved before the CPC who has allowed the same and despite allowing condonation of delay by the CPC and acceptance of filing of the return u/s 139 of the Act, the said return was not processed u/s 143(1) and credit of TDS amount deducted at source was not given to the assessee wrongly. It is further argued that ld. JCIT(A) while confirming the order of the Assessing Officer has perpetuated the illegality done by the Revenue authority which has resulted into misc....
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....4 of the Act, the Department, retaining that amount of tax paid on the basis of an invalid return without there being any self-assessment/assessment made by the authorities under the Act would violate article 265 of the Constitution of India. 27. In view of the same, we are of the opinion that when the assessment is annulled by the authorities, the Department is bound to refund the excess amount of tax paid by the assessee on the valid return. The interpretation of the Tribunal that the return contemplated under proviso (b) to section 240 of the Act, includes both valid and invalid is not sustainable and has to be set aside." 8. Similarly, ld. the AR has also relied the case of Hon'ble High Court of Gujarat in S. R. Koshti (supr....
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....ed, the authorities under the Act are required to assist him and ensure that only legitimate tax due are collected". 10. Similarly, the Hon'ble Karnataka High Court in case Gujarat in S. R. Koshti (supra) was pleased to hold that "when if the Assessing Officer is barred from framing a fresh assessment, based on an invalid return, the department, retaining the amount of tax paid on the basis of invalid return without there being any self-assessment/assessment made by the authority under the Act, would violate Article 265 of the Constitution of India". 11. We have considered the facts and circumstances and the legal precedents relied, as discussed above. It is an admitted fact that the TDS amount of Rs. 17,08,200/- was deducted at sourc....