Cwjc/20009/2021 Of Alkem Laboratories Limited v. The Commissioner Of Income Tax (Tds), Bihar Central Revenue Building (Annexe), Beer Chand Patel Marg, Patna

IN THE HIGH COURT OF JUDICATURE AT PATNACivil Writ Jurisdiction Case No.20009 of 2021 ====================================================== Alkem Laboratories Limited, a Limited Company incorporated under theCompanies Act, 1956, having its office at Exhibition Road, Patna G.P.O., P.S.Gandhi Maidan in the town and District of Patna through its RegionalDirector, Ashok Kumar, son of Late Lalan Kumar Singh aged about 57,resident of F- 145, P.C. Colony, Kankarbagh, Patna- 800020 PO and PS-Kankarbagh, District- Patna. ... ... Petitioner/s Versus 1.The Commissioner of Income Tax (TDS), Bihar Central Revenue Building(Annexe), Beer Chand Patel Marg, Patna.(Annexe), Beer Chand Patel Marg, Patna. 2.The Joint/ Additional Commissioner of Income Tax TDS Range, CentralRevenue Building (Annexe), Beer Chand Patel Marg, Patna.Revenue Building (Annexe), Beer Chand Patel Marg, Patna. 3.The Assistant Commissioner of Income Tax (TDS), Patna, Central RevenueBuilding (Annexe), Beer Chand Patel Marg, Patna.Building (Annexe), Beer Chand Patel Marg, Patna. 4.CPC (TDS), Aaykar Bhawan, Sector- 3, Vaishali, Ghaziabad- 201010 (UP). ... ... Respondent/s ====================================================== ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Date : 18-08-2023 1. Whether the amendments made to the Income TaxAct, 1961 and the circular issued regulating the period in whicha Refund Application is to be filed would result in thefrustration of the claim of refund made by the assessee, is thequestion raised in the writ petition. 2. The assessee, the petitioner herein, is concernedwith the demand made for various years and the refund for theAssessment Year 2010-11 relatable to the Financial Year 2009-10. 3. Shri Ajay Kumar Rastogi, learned Senior Counselspecifically referred to Section 200A of the Income Tax Actwhich was brought into the statute as on 01.04.2010; whichprovided a specific period for processing of statements of taxdeducted at source; which is till the expiry of one year, from theend of the financial year in which the statement is filed. Thestatement of the TDS deducted in the financial year 2009-10,was filed by the assessee in the year 2010-11 and hence thedepartment could have sent an intimation on or before31.03.2011. No such intimation was sent and later on theassessee was informed of a demand of Rs. 19.29 lakhs for thevarious assessment years starting from 2007-08 to 2021-22 as seen from Annexure-7 series; intimation of outstanding demand.The assessee even now, despite the date for sending anintimation under Section 200A having expired only prays forsetting off the demand as against the refund claim which ispermissible under Section 245 of the Act. It is submitted that asof now the department requires that Form 26B has to be filed,which Form was introduced only under sub-rule (3A) of Rule31-A of the Income Tax Rules, effective from 19.02.2013. Infact, there was no such rule prescribed or the filing of a formmandated any time before 2013 and not at all for the relevantassessment year 2010-11. The circular of the departmentwherein a specific time has been prescribed to file anapplication for refund making a claim of refund, as produced atAnnexure-B in the supplementary counter affidavit filed by therespondents is alleged to be in contravention of the statutoryprovision. 4. The learned Senior Counsel refers to Karimtharuvi Tea Estate Ltd. v. State of Kerala; (1966) 60 ITR 262 (SC) tourge that any amendment brought out to the Income Tax Act ason the 1[st] of April of a financial year would apply to theassessments for that year and any amendment brought in afterthe first day of April would not apply to the assessment carried 4. The learned Senior Counsel refers to Karimtharuvi Tea Estate Ltd. v. State of Kerala; (1966) 60 ITR 262 (SC) tourge that any amendment brought out to the Income Tax Act ason the 1[st] of April of a financial year would apply to theassessments for that year and any amendment brought in afterthe first day of April would not apply to the assessment carried out in that year, even if the assessment is made after theamendment came into force. Hence, the amendment made onthe first day of April of any financial year applies to theassessment of the prior financial year also, which would becarried out in the financial year in which the amendment isenforced as on 1[st] of April. Kerala Financial Corporation &Others v. CIT; (1994) 210 ITR 129 (SC) is relied on to contendthat a circular issued under Section 119 cannot be one detractingfrom the provisions of the Act and also cannot override theprovisions of the Act. Reliance is also placed on CIT v. HeroCycle Pvt. Ltd.; (1997) 228 ITR 463 (SC) to put forth the wellhealed proposition that circulars though binding on thedepartment officials, it would not bind the appellate authorities,the Tribunal, the Courts or even the assessee itself. 5. Mrs. Archana Sinha, learned Senior StandingCounsel appearing for the Income Tax Department asserts thatthe circular, Annexure-B is applicable to the case of the assesseeand a refund claim ought to have been made within two yearsfrom the end of the financial year in which the return was filed;which expired on 31.03.2012. It was long after, in 2015 that theclaim was raised. It is argued that Section 200A is not applicableto the assessee; especially relying on the explanatory note, annexed along with the supplementary counter affidavit which,by clause 7.4 specifies that the amendment has been madeapplicable with retrospective effect from 01.04.2009 and willaccordingly apply in relation to the Assessment Year 2011-12and subsequent assessment years. The learned Senior StandingCounsel also relies on Paragraphs 4 and 5 of the counteraffidavit, to further buttress the above contention ofinapplicability of Section 200A for the relevant year. 6. After giving our thoughtful consideration to thearguments raised, the records and the provisions pointed out, weare of the opinion that the applicability of Section 200A neednot be dealt with at all; for it being irrelevant to decide the issue.Section 200A speaks of processing of statements of taxdeducted at source. It delineates the process by which thestatement of tax deducted at source, filed under Section 200A,has to be processed and speaks of an intimation to be sent to thedeductor as per clause (e). Clause (f) of Section 200A (1) alsomandates that the amount of refund to the deductor in pursuanceof such determination under clause (d), shall be granted to thedeductor. It is the proviso which mandates the intimation to besent within one year from the end of the financial year in whichthe statement is filed. In fact, this is the limitation on the department’s right to send an intimation on expiry of the same;which provision cannot frustrate the claim of a valid refundapplicable to the assessee. If, as submitted by the Revenue,Section 200A is not applicable to the relevant year, there isnothing preventing the Assessing Officer from processing thestatement filed under Section 200 and allowing the refund; on arequest made by the assessee. The very procedure for processingof statement of tax deducted at source and an intimation alongwith a refund, without even a claim from the assessee is broughtin under Section 200A. In that circumstance, the amountscapable of being refunded could also be adjusted as against thedemand raised, which is far lesser. department’s right to send an intimation on expiry of the same;which provision cannot frustrate the claim of a valid refundapplicable to the assessee. If, as submitted by the Revenue,Section 200A is not applicable to the relevant year, there isnothing preventing the Assessing Officer from processing thestatement filed under Section 200 and allowing the refund; on arequest made by the assessee. The very procedure for processingof statement of tax deducted at source and an intimation alongwith a refund, without even a claim from the assessee is broughtin under Section 200A. In that circumstance, the amountscapable of being refunded could also be adjusted as against thedemand raised, which is far lesser. 7. In so far as sub-rule (3A) of Rule 31A is concerned,admittedly, the same was brought in only on 19.02.2013 alongwith Form 26B. The assessee even now is ready to file anapplication under Form 26B; however, the department assertsthat such an application cannot be filed without first satisfyingthe demand made under Annexure-7 series. The assessee on theother hand submits that when far more amounts are due fromthe department to the assesee, the department could enable filingof Form 26B so that the refund can be processed and thedemands set off along with any interest payable to the department from the refunded amounts. The only rider would bein so far as the department also being made liable to pay theinterest due on the refund. 8. Annexure-B is a circular issued by the Board whichas has been declared in the cited decisions is not binding on thisCourt or even the assessee. There can be no prescription of alimitation period in the circular, which is not available in thestatute or the rules framed thereunder. 9. In the totality of the circumstances, we are of theopinion that the entire problem could be resolved if thedepartment avails of the provision under Section 245 of theIncome Tax Act. Having found that there is no limitation formaking a claim of refund; even now the assessee could make anapplication and when the refund is processed there can be a setoff made of the amounts remaining due from the assessee for thevarious assessment years, from the amounts directed to berefunded. On the above reasoning, we direct the department toeither enable filing of Form 26B or in the alternative permit theassessee to make a claim for refund in the physical mode whichshall be considered on the basis of the statement made underSection 200 regarding the tax deducted at source. The refundbeing processed and permitted, the department should set off the amounts due as evident from the demand raised for the variousassessment years from 2007-08 to 2021-22 as per Annexure-7series. 10. The writ petition is allowed with the abovedirections. (K. Vinod Chandran, CJ) P.K.P./- (Partha Sarthy, J) AFR/NAFRCAV DATEUploading Date21.08.2023Transmission Date