Mr.gopalan Thygarajan v. The Commissioner Of Income Tax, Chennai-V

IN THE HIGH COURT OF JUDICATURE AT MADRAS CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM Mr.Gopalan Thygarajan ... Petitioner in bothW.Ps. Vs. 1. The Commissioner of Income Tax, Chennai-V, 121, Mahatma Gandhi Road, Nungambakkam, Chennai-600 034. 2. The Deputy Commissioner of Income Tax, Salary Circle-IV, 121, Mahatma Gandhi Road, Chennai-600 034. ... Respondentsin both W.Ps. Prayer in W.P.No.10726 of 2011 : Petition filed under Article226 of the Constitution of India praying for issuance of Writ ofCertiorarified Mandamus, to call for the records of the firstrespondent in C.No.2063(33)/2002-03/CIT-V dated 26.10.2009 andquash the same as illegal, arbitrary and without authority oflaw and further direct the second respondent to refund the taxamount of Rs.3,43,658/- along with admissible interest. Prayer in W.P.No.*10727 of 2011 : Petition filed under Article226 of the Constitution of India praying for issuance of Writ ofCertiorarified Mandamus, to call for the records of the firstrespondent order dated 22.02.2011 and quash the same as illegal,arbitrary and without authority of law and further direct thesecond respondent to refund the tax amount of Rs.1,83,294/-along with admissible interest. For Petitioner:Mr.S.ThiruvengadamFor Respondents:Mr.A.P.Srinivas,Senior Standing Counsel Heard Mr.S.Thiruvengadam, learned counsel appearing for thepetitioner and Mr.A.P.Srinivas, learned Senior Standing Counselappearing for the respondents. 2.The petitioner has filed W.P.No.10726 of 2011 challengingthe order dated 26.10.2009 passed under Section 119(2)(b) ofthe Income Tax Act, 1961 (hereinafter referred as “the Act”).By the said order, the return filed by the petitioner on11.02.2003, was held to be non-constituted revised return underSection 139(5) of the Act, and the view taken by the assessingofficer that it is an invalid return was upheld by theCommissioner. 3.The petitioner has filed W.P.No.10727 of 2011 challengingthe order passed by the first respondent dated 22.02.2011,rejecting the petition filed by the assessee under Section 119(2)(b) of the Act praying for condonation of delay in filing therevised return for the assessment year 1998-99. 4.Identical orders were subject matter of challenge in abatch of writ petitions in W.P.No.16375 of 2010 etc., batch.All other similarly placed persons like the petitioner, are allemployees of Infosys Technology Limited. Those writ petitionswere allowed, as against which, the Department preferred writappeals viz., W.A.No.1542 of 2010 etc., batch and by a commonjudgment dated 23.12.2011, the writ appeals were dismissed. 5.In respect of one Mr.S.Vasudevan, who is also an employeelike that of the petitioner herein, his case came up forconsideration before the Hon'ble Division Bench in W.A.No.572 of2011, by the revenue as against the order in W.P.No.20525 of2010 dated 15.09.2011 and the Division Bench by judgment dated30.06.2016, following the earlier Division Bench's judgment inW.A.No.1542 of 2010 etc., batch, dismissed the appeal filed bythe revenue. The operative portion of the order reads asfollows: “5.Learned counsel for the appellants in thewrit appeals has contended that the Department hadraised a demand under Section 201 and for interestunder Section 201(1A) of the Income Tax Act https://hcservices.ecourts.gov.in/hcservices/ 5.In respect of one Mr.S.Vasudevan, who is also an employeelike that of the petitioner herein, his case came up forconsideration before the Hon'ble Division Bench in W.A.No.572 of2011, by the revenue as against the order in W.P.No.20525 of2010 dated 15.09.2011 and the Division Bench by judgment dated30.06.2016, following the earlier Division Bench's judgment inW.A.No.1542 of 2010 etc., batch, dismissed the appeal filed bythe revenue. The operative portion of the order reads asfollows: “5.Learned counsel for the appellants in thewrit appeals has contended that the Department hadraised a demand under Section 201 and for interestunder Section 201(1A) of the Income Tax Act https://hcservices.ecourts.gov.in/hcservices/ against the employer for the failure to deduct taxat source in respect of perquisite value of stockoption adopted by the employees covered underEmployees Stock Option Scheme (ESO Scheme) andagainst such demand the employer had not preferredany appeal and, in such circumstances, the learnedsingle Judge ought not to have directed theRevenue to refund the amount to the employee,against whom admittedly there was no demand, withinterest. According to him, the decision of theKarnataka High Court in S.Thiagarajan's case isnot applicable to the facts of the case and inthat case Section 240 was dealt with, whereas thepresent case is covered by the provisions ofSection 239 of the Act. He further added that theChief Commissioner of Tax has no power to condonethe delay and he should have directed the assesseeto approach the Board. 6.The writ petitions were filed by theemployees seeking refund of the TDS amount withadmissible interest by quashing the order passedby the authorities in the application filed bythem for condonation of delay in seeking refund.The writ petitioners seeks refund by placingreliance on the decision of the Karnataka HighCourt in S.Thiagarajan's case and the decision ofthis Court, which is in challenge in the writappeals. 7.The learned single Judge has allowed thewrit petitions by following the order of theKarnataka High Court in S.Thiagarajan's case.Though the learned Standing Counsel for theRevenue contends that the said decision is notapplicable to the facts of the present case, weare not able to take a contra view. In the saidcase, the Karnataka High Court has categoricallyheld that it is an obligation cast on the Revenueto effect the refund, without calling upon theassessees to apply for refund the claim. Thelearned Standing Counsel is not in a position tostate as to whether the order of the order of theKarnataka High Court has been reversed by theDivision Bench or the Hon'ble Supreme Court and,moreover, he is not contra view. Moreover, thecontention of the learned Standing Counsel thatthe Chief Commissioner has no power to condone thedelay sustained in view of the decision of thehon'ble Supreme Court in the earlier round oflitigation.” 6.Thus, following the above decision, these writ petitionsare allowed, the impugned orders are set aside and therespondents are directed to refund the amount to thepetitioner/assessee with interest payable as per the provisionsof the Income Tax Act within a period of eight weeks from thedate of receipt of a copy of this order. No costs.Consequently, connected miscellaneous petitions are closed. -s/d-Assistant Registrar(CCC)(22/12/2017)(* AMENDED AS PER ORDER DATED 19.01.2018 MADE IN WP.10726 & 10727/2011) -s/d-Assistant Registrar(CS II)(22/01/2018) True Copy Sub-Assistant RegistrarabrTo1. The Commissioner of Income Tax, Chennai-V, 121, Mahatma Gandhi Road,TO BE SUBSTITUTAD TO THE Nungambakkam, Chennai-600 034.ORDER COPY ALREADYDESPATCH ON 08.01.20182. The Deputy Commissioner of Income Tax, Salary Circle-IV, 121, Mahatma Gandhi Road, Chennai-600 034. -s/d-Assistant Registrar(CCC)(22/12/2017)(* AMENDED AS PER ORDER DATED 19.01.2018 MADE IN WP.10726 & 10727/2011) -s/d-Assistant Registrar(CS II)(22/01/2018) True Copy Sub-Assistant RegistrarabrTo1. The Commissioner of Income Tax, Chennai-V, 121, Mahatma Gandhi Road,TO BE SUBSTITUTAD TO THE Nungambakkam, Chennai-600 034.ORDER COPY ALREADYDESPATCH ON 08.01.20182. The Deputy Commissioner of Income Tax, Salary Circle-IV, 121, Mahatma Gandhi Road, Chennai-600 034. +2 Ccs to Mr.S. Thiruvengadam, Advocate sr 4058 & 4059.+1 CC to Mr.A.P. Srinivas, Advocate sr 88298. W.P.Nos.10726 & 10727 of 2011 SP(22/12/2017) GP(CO) TR(22/01/2018)