Colonel Ashwani Kumar Ram Singh (Retd v. Principal Commissionerof Income Taxindore, Dated 29.08.2019

HIGH COURT OF MADHYA PRADESH: BENCH AT INDOREWrit Petition No.8858/2019 Colonel Ashwani Kumar Ram Singh (Retd.) v/s Principal Commissionerof Income TaxIndore, dated 29.08.2019 Shri Ram Gilda, learned counsel for the petitioner. Ms. Veena Mandlik, learned counsel for therespondent. The petitioner before this Court, a retired Colonel ofthe Indian Army, has filed this present petition beingaggrieved by the order dated 31.03.2019 passed by thePrincipal Commissioner, Income Tax, Indore rejecting hisclaim for refund of TDS on exempted disability pensionalong with interest. The petitioner's contention is that he suffered a wardisability, and finally, an order was passed by the ArmedForces Tribunal, Principal Bench, New Delhi on 03.08.2017holding that the petitioner is entitled for disability pension. The Director General, Personal Service, Ministry ofDefence has finally passed an order on 17.11.2017 grantingdisability pension to the petitioner w.e.f. 01.01.2006 and theaforesaid facts are not disputed. The petitioner submitted an application for refund oftax keeping in view the order passed by the Armed ForcesTribunal, Principal Bench, New Delhi dated 03.08.2017 andsubsequent order passed by the Ministry of Defenceholding him entitled for disability pension w.e.f. 01.01.2006with a prayer to refund the tax, which was deducted by wayof TDS for the year w.e.f. 2007 – 08 to 2015 – 2016, i.e. fornine years. The petitioner's application was processed bythe Chief Commissioner, Income Tax and the same was partially allowed, allowing the refund for assessment year2012 – 13 to 2015 – 16. However, in respect of assessmentyear 2007 – 08 to 2011 – 12, the application has beenrejected on the ground that the Chief Commissioner doesnot have the power to condone the delay beyond six year,meaning thereby, the refund has been allowed in respect ofassessment year 2012 – 13 and 2015 – 16 without interest. The petitioner again submitted an application on08.04.2019 to the respondent / Income Tax Department tocondone the delay for the assessment year 2007 – 08 to2011 – 12 and to grant interest at the rate of 12% on refundfor all the years right from assessment year 2007 – 08 to2015 – 16, however, the same has not been done and he hasapproached this Court. A reply has been filed by the respondent / Income TaxDepartment and the refund ordered in the matter has beenadmitted by the department, however, it has been stated thatin light of the statutory provision as contained underSection 119 (2)(b) of the Income Tax Act, 1961, the delaycannot be condoned by the Chief Commissioner of IncomeTax and the same has to be condoned by the Central Boardof Direct Taxes. Learned counsel for the respondent has stated beforethis Court that the interest has not been paid in light of theCBDT Circular No.9/2015 dated 09.06.2015, as it is abelated claim made by the assessee. She has placed heavyreliance upon paras – 3 and 6 of the said circular. Heard learned counsel for the parties at length andperused the record. The matter is being disposed of at the motion hearing stage itself with the consent of the parties. Learned counsel for the respondent has stated beforethis Court that the interest has not been paid in light of theCBDT Circular No.9/2015 dated 09.06.2015, as it is abelated claim made by the assessee. She has placed heavyreliance upon paras – 3 and 6 of the said circular. Heard learned counsel for the parties at length andperused the record. The matter is being disposed of at the motion hearing stage itself with the consent of the parties. In the present case, the undisputed facts reveal thatthe petitioner, who is a decorated officer of the IndianArmy, after fighting with the enemy through out his career,was forced to fight with his parent organization in thematter of grant of disability pension. Even he fought abattle with Union of India / Ministry of defence as he wasbeing deprived of disability pension in spite of the fact thathe suffered disability while on active duty, and finally, theArmed Forces Tribunal, Principal Bench, while passing anorder in O.A. No.1134/2016, has allowed the originalapplication and has held that the petitioner shall be entitledfor disability pension. Thereafter, the Ministry of Defence,through the Director General Personal Services, has finallypassed an order implementing the order passed by theArmed Forces Tribunal holding that the petitioner isentitled for disability pension w.e.f. 01.01.2006. The petitioner, event though, he succeeded in thebattle with his own parent organization / Ministry ofdefence is now being forced to fight another battle withanother limb of Government of India i.e. Income TaxDepartment and it appears that his war is still not over. Undisputedly, it is nobody's case that the petitioner isnot entitled for disability pension. The technicalities arecoming in his way in the matter of grant of refund. Section 119 of the Income Tax Act, 1961 reads as under:- “119. Instructions to subordinate authorities (1)The Board may, from time to time, issue suchorders, instructions and directions to other income- tax authorities as it may deem fit for the properadministration of this Act, and such authorities and allother persons employed in the execution of this Actshall observe and follow such orders, instructions anddirections of the Board: Provided that no such orders, instructions ordirections shall be issued- (a)so as to require any income- tax authority tomake a particular assessment or to dispose of aparticular case in a particular manner; or (b)so as to interfere with the discretion of the[ 2]Deputy Commissioner (Appeals)]3or theCommissioner (Appeals)] in the exercise of hisappellate functions. (2)Without prejudice to the generality of theforegoing power,- (a)the Board may, if it considers it necessary orexpedient so to do, for the purpose of proper andefficient management of the work of assessment andcollection of revenue, issue, from time to timewhether by way of relaxation of any of the provisionsof sections[ 5] 139], 143, 144, 147, 148, 154, 155,[ 6] sub-section (1A) of section 201, sections 210, 211,[ 7]234A, 234B], 234C], 271 and 273 or otherwise,general or special orders in respect of any class ofincomes or class of cases, setting forth directions orinstructions (not being prejudicial to assessees) as tothe guidelines, principles or procedures to be followedby other income- tax authorities in the work relatingto assessment or collection of revenue or the initiationof proceedings for the imposition of penalties and anysuch order may, if the Board is of opinion that it isnecessary in the public interest so to do, be publishedand circulated in the prescribed manner for general information; information; (b)the Board may, if it considers it desirable orexpedient so to do for avoiding genuine hardship inany case or class of cases, by general or special order,authorise[ 8] any income- tax authority, not being aDeputy Commissioner (Appeals) or Commissioner(Appeals)] to admit an application or claim for anyexemption, deduction, refund or any other relief underthis Act after the expiry of the period specified by orunder this Act for making such application or claimand deal with the same on merits in accordance with law. (c)the Board may, if it considers it desirable orexpedient so to do for avoiding genuine hardship inany case or class of cases, by general or special order for reasons to be specified therein, relax anyrequirement contained in any of the provisions ofChapter IV or Chapter VIA, where the assessee hasfailed to comply with any requirement specified insuch provision for claiming deduction thereunder,subject to the following conditions, namely:- (i)the default in complying with suchrequirement was due to circumstancesbeyond the control of the assessee; and(ii)the assessee has complied with suchrequirement before the completion ofassessment in relation to the previous year in which such deduction is claimed: Provided that the Central Government shallcause every order issued under this clause to be laidbefore each House of Parliament.]” It is true that the Commissioner of Income Tax isempowered to condone a delay up to six years and beyondthat, the Central Board of Direct Taxes is empowered tocondone the delay and in those circumstances, theapplication submitted by the petitioner for refund of tax forthe assessment year 2007 – 08 to 2015 – 16 has beenpartially allowed and refund has been ordered only inrespect of assessment year 2012 – 13 to 2015 – 2016without interest. Heavy reliance has been placed upon a circular issuedby the Central Board of Direct Taxes dated 09.06.2019.Reliance has been placed by the learned counsel for therespondent upon paras – 3 and 6 of the CBDT circular. Theaforesaid paragraph reads as under:- “3.No condonation application for claim ofrefund / loss shall be entertained beyond six yearsfrom the end of the assessment year for which suchapplication / claim is made. This limit of six yearsshall be applicable to all authorities having powers tocondone the delay as per the above prescribedmonetary limits, including the Board. A condonationapplication should be disposed of within six monthsfrom the end of the month in which the application is received by the competent authority, as far aspossible. 6.A belated application for supplementary claimof refund (claim of additional amount of refund aftercompletion of assessment for the same year) can beadmitted for condonation provided other conditionsas referred above are fulfilled. The powers ofacceptance / rejection within the monetary limitsdelegated to the Pr.CCsIT/CCsIT/Pr.CsIT/ CsIT incase of returns claiming refund and supplementaryclaim of refund would be subject to the followingfurther conditions: (i)The income of the assessee is notassessable in the hands of any other personunder any of the provisions of the Act. (ii)No interest will be admissible onbelated claim of refunds. (iii)The refund has arisen as a result ofexcess tax deducted/collected at sourceand/or excess advance tax payment and/orexcess payment of self-assessment tax as per the provisions of the Act.” (i)The income of the assessee is notassessable in the hands of any other personunder any of the provisions of the Act. (ii)No interest will be admissible onbelated claim of refunds. (iii)The refund has arisen as a result ofexcess tax deducted/collected at sourceand/or excess advance tax payment and/orexcess payment of self-assessment tax as per the provisions of the Act.” Meaning thereby, there is a power with the CentralBoard of Direct Taxes to condone the delay. There appearsto be no justification in forcing the petitioner to file anapplication before Central Board of Direct Taxes. Once thepower is there and it was not the petitioner, who was atfault in the matter, this Court, in the peculiar facts andcircumstances of the case, is of the considered opinion thatthe delay can be condoned by this Court also, and therefore,the delay in filing the application for refund of tax is herebycondoned. It is not a case where the assessee was sleepingover his right, it is a case where the assessee was fightingwith the department for his legitimate right of grant ofdisability pension, as he was disabled officer and hisoriginal application was allowed only on 03.08.2017 andthe order was passed by the Ministry of Defence on17.11.2017 granting him disability pension w.e.f. 01.01.2006 and with quite promptitude he has submitted anapplication for refund of tax. This Court in the case of Colonel Madan GopalSingh Negi v/s CIT (II) (W.P. No.29017/2018) videjudgment dated 28.02.2019, in similar circumstances hasheld as under:- “In the considered opinion of this Court, asthe income of the petitioner was exempted, thedepartment does not have any other choice except torefund the amount and the disabled Army Officercannot be made to run from pillar to post on accountof various technicalities as stated in the writ petition.This Court is aware of its limitation of not Travellingand Traversing into the prohibited territory of“Legislating through Court orders” however thisCourt feels duty bound to state the obvious, more sowhen the “Call of Duty” of a Judge inspite him toUnderline the requirement of brushing aside the“Administrative Technicality” while DispensingJustice. Our Army Soldiers, Naval Officials andFighter are Day and Nights protecting Our TerritorialBorders from Enemy Infiltration and Attacks andeven while putting their life to the greatest risk, arekeeping all Citizens safe and Secure and making Ourlife free from all such Dangers, where they don'tthink of “Technicalities” while Fighting withEnemies at the Front, as to whether pulling theTrigger of their Gun would invite a “Court ofinquiry” and from this practicalperspective this Courtwants to express its concern for not putting too muchof technicalities in such matters by those who areinvested with Administrative Powers to deal anddecide the affairs of the Personnel of Indian ArmedForces. The Court records and reiterates its absolutecommitment to adherence of Rule of Law in itsstrictest terms, without carving out any exception toit, however it intends to convey its concern for thewelfare of the “War Heros” who marvels at theBorders and within the Country, should not beunnecessarily Harassed or Troubled, for Technicaladherence to some archaic administrative procedureshaving no thoughtful purpose sought to be achieved,while denying Legitimate Relief to the Members ofthe Armed Forces.” In light of the aforesaid and in the considered opinionof this Court, as this Court has already condoned the delay,the respondent is directed to process the claim of thepetitioner and to grant a refund for which he is lawfullyentitled within a period of sixty days from the date ofreceipt of certified copy of this order. In light of the aforesaid and in the considered opinionof this Court, as this Court has already condoned the delay,the respondent is directed to process the claim of thepetitioner and to grant a refund for which he is lawfullyentitled within a period of sixty days from the date ofreceipt of certified copy of this order. In the matter of grant of interest, the CBDT circularwill not come in way of the petitioner, as the petitioner isnot at fault in the matter. The respondent shall also pay theinterest in respect of the entire amount right from 2007 – 08to 2015 – 16, as the statute i.e. Income Tax Act, 1961 doesnot debar an assessee, keeping in view the peculiar factsand circumstances of the case, for grant of interest. With the aforesaid, the present writ petition standsallowed. No order as to costs, Certified copy, as per rules. (S.C. SHARMA) J U D G E J U D G E (SHAILENDRA SHUKLA) J U D G E J U D G E Ravi Digitally signed by Ravi Prakash Date: 2019.09.03 17:22:52 +05'30'