M/S.ganam Homes And Estates Private Limitedrep By Its Directormr.r.p.darrmalingam @ A.r.dharmalingamno v. The Deputy/Assistant Commissioner Of Income Tax, Central Circle – 2 (2), Investigation Wing, Room

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 29.11.2021CORAM: THE HONOURABLE MR.JUSTICE C.SARAVANANWP.Nos.15762 & 15763 of 2021[Video Conferencing] W.P.No.15762 of 2021 M/s.Ganam Homes and Estates Private LimitedRep by its DirectorMr.R.P.Darrmalingam @ A.R.DharmalingamNo.1379, Golden Villa, I Block,6[th] Street, 18[th] Main Road,VallalarKudiyeruppuAnna Nagar WestChennai – 600 040.PAN No. ...Petitioner Vs. 1. The Deputy/Assistant Commissioner of Income Tax, Central Circle – 2 (2), Investigation Wing, Room No.109, 1[st] Floor, New No.46, M.G.Road, Chennai – 600 034. 2. The Additional Commissioner of Income Tax, Central Circle – 2, Investigation Wing, Room No.108, 1[st] Floor, New No.46, M.G.Road, Chennai – 600 034....Respondents Prayer:- Writ Petition filed under Article 226 of the Constitution ofIndia to issue a Writ of Madamus directing the Respondents torefund the amount of Rs.95,20,460/- as determined by the 1[st]Respondent vide Order DIN: ITBA/REC/M/154/2020-21/10313544184(1), dated 08.03.2021 along with interest to the Petitionerbearing PAN No. within a time period to bestipulated by this Court. https://hcservices.ecourts.gov.in/hcservices/ W.P.No.15763 of 2021M/s.RPD Earth Movers Private LimitedRep by its DirectorMrs.D.SangupathiNo.1379, Golden Villa, I Block,6[th] Street, 18[th] Main Road,VallalarKudiyeruppuAnna Nagar WestChennai – 600 040.PAN No. ...PetitionerVs.1. The Deputy/Assistant Commissioner of Income Tax, Central Circle – 2 (2), Investigation Wing, Room No.109, 1[st] Floor, New No.46, M.G.Road, Chennai – 600 034.2. The Additional Commissioner of Income Tax, Central Circle – 2, Investigation Wing, Room No.108, 1[st] Floor, New No.46, M.G.Road, Chennai – 600 034....RespondentsPrayer:- Writ Petition filed under Article 226 of the Constitution ofIndia to issue a Writ of Madamus directing the Respondents torefund the amount of Rs.91,05,200/- determined by the 1[st]Respondent vide Order DIN: ITBA/REC/M/154/2020-21/1031286244(1), dated 05.03.2021 along with interest to the Petitionerbearing PAN No. within a time period to bestipulated by this Court.For Petitionerin both WP's :Ms.Pushya Sitaraman, Senior CounselAssisted byMr.R.MuraliFor Respondentsin both WP's:Mr.A.P.Srinivas, Senior Standing CounselCOMMON ORDER W.P.No.15762 of 2021 has been filed for a direction torefund a sum of Rs.95,20,460/- as determined by the firstrespondent vide order DIN ITBA / REC / M / 154 / 2020 – 2021 /10313544184(1) dated 08.03.2021 under Section 154 of theIncome Tax Act, 1961.https://hcservices.ecourts.gov.in/hcservices/ 2.W.P.No.15763 of 2021 has been filed for a direction torefund a sum of Rs.91,05,200/- as determined by the firstRespondent vide Order DIN: ITBA / REC / M / 154 / 2020-21 /1031286244(1), dated 05.03.2021 under Section 154 of theIncome Tax Act, 1961. 3.The case of the petitioner in W.P.No.15762 of 2021 isthat during the previous year 2010-11, the petitioner hadreceived advance from some of its customers which was notoffered to income. The assessment was completed and anassessment order dated 31.03.2016 was passed for theAssessment Year 2011-12 [previous year 2010-11] , whereby thepetitioner was made liable to pay tax on the advance receivedfrom various customers. It is submitted same amount was addedto the taxable income of the petitioner on protection basisfor the Assessment Year 2014-15 by determining the income asRs.3,21,90,000/- after allowing an expenditure of Rs.30,000/-. 4.The petitioner preferred an appeal before the CIT(Appeals) against the Assessment Order dated 31.03.2016 forthe Assessment Year 2011-2012. The petitioner's appeal wasallowed by CIT (Appeals), vide order dated 23.02.2018. Furtherappeal before the Tribunal by the Department was alsodismissed, vide order dated 03.12.2018. In thesecircumstances, the Department preferred appeal before thisCourt in TCA.No.505 of 2019. 4.The petitioner preferred an appeal before the CIT(Appeals) against the Assessment Order dated 31.03.2016 forthe Assessment Year 2011-2012. The petitioner's appeal wasallowed by CIT (Appeals), vide order dated 23.02.2018. Furtherappeal before the Tribunal by the Department was alsodismissed, vide order dated 03.12.2018. In thesecircumstances, the Department preferred appeal before thisCourt in TCA.No.505 of 2019. 5.It is the case of the petitioner that pending the aboveDepartment's appeal in TCA.No.505 of 2019, the petitioneroffered to settle the dispute by filling appropriatedeclarations under the provisions of the Direct Taxes Vivad seVishwas Scheme for the Assessment Year 2011-12. Thepetitioner's case for settling the dispute was also acceptedby the designated authority by issuance of Form-3 on20.01.2021. The petitioner also remitted a sum ofRs.1,02,89,121/- on 05.03.2021. 6.The case of the petitioner in W.P.No.15763 of 2021 isidentical. Here also, the petitioner was held liable toadvance received by it during Assessment Year 2011-12 byAssessment Order dated 31.03.2016. The petitioner hadsuccessfully appealed before the CIT (Appeals) who by orderdated 23.02.2018 allowed the appeal of the petitioner. Thefurther appeal before the ITAT by the department was alsodismissed on 03.12.2018. Aggrieved by the same, the Departmenthad filed T.C.A.No.503 of 2019. 7.Under these circumstances, the petitioner sent arepresentation dated 30.11.2020 and 05.03.2021 to rectify theprotective demand made for the Assessment Year 2014-15 and torefund a sum of Rs.79,62,787/- + interest of Rs.15,57,673/-under Section 244A of the Income Tax Act, 1961. https://hcservices.ecourts.gov.in/hcservices/ 8.Meanwhile, for the Assessment Year 2014-15 [previousyear 2013-14], same income was also offered to tax by thepetitioner and a protective assessment was made by therespondent under Section 143-A of the Income Tax Act, 1961.Since the petitioner's case was settled on the aforesaidprovisions of the Direct Taxes Vivad se Vishwas scheme, theDeputy Commissioner of Income Tax viz., for the AssessmentYear 2011-2012, the first respondent passed an order underSection 154 of the Income Tax Act for the assessment year2014-15 on 08.03.2021 by concluding that the petitioner wasindeed entitled for refund of a sum of Rs.95,20,460/- i.e., asum of Rs.79,62,787/- paid as proportionate tax paid on theadvance which was offered as tax by the petitioner on theaforesaid amount of Rs.3,21,90,000/- and further interestunder Section 244A of the Income Tax Act amounting toRs.15,57,673/-. 9.During the pendency of the appeal, the petitioner optedfor Vivad Se Vishwas Act Scheme and filed Form No.1 and FormNo.2 under the scheme for the assessment year 2011-12 on02.12.202. As per Circular No.7 of 2020 dated 04.03.2020issued by Central Board of Direct Taxes, on settlement ofdispute related to substantive addition under Vivad SeVishwas, the Assessing Officer shall pass rectification orderdeleting the protective addition relating to the same issue inthe case of the assessee. 10.Appearing on behalf of the petitioner, Ms.PushyaSitaraman, learned Senior Counsel would submit that therespondents are bound to repay the amount which has beenconfirmed by the first respondent while passing the orderunder Section 154 of the Income Tax Act on 08.03.2021. Thelearned Senior Counsel has also drawn the attention toCircular No.7/2020, dated 04.03.2020 bearing reference F.No.IT(A)/1/2020-TPL, Government of India, Ministry of Finance,Department of Revenue, Central Board of Direct Taxes. Inparticular, reference was made to the Answer given to QuestionNo.35, wherein the CMBT has answered as follows: 10.Appearing on behalf of the petitioner, Ms.PushyaSitaraman, learned Senior Counsel would submit that therespondents are bound to repay the amount which has beenconfirmed by the first respondent while passing the orderunder Section 154 of the Income Tax Act on 08.03.2021. Thelearned Senior Counsel has also drawn the attention toCircular No.7/2020, dated 04.03.2020 bearing reference F.No.IT(A)/1/2020-TPL, Government of India, Ministry of Finance,Department of Revenue, Central Board of Direct Taxes. Inparticular, reference was made to the Answer given to QuestionNo.35, wherein the CMBT has answered as follows: Question No.35 : If there is substantive additionas well as protective addition in the case of sameassessee for different assessment year, how will thatbe covered? Similarly if there is substantive additionin case of one assessee and protective addition onsame issue in the case of another assessee, how willthat be covered under Vivad se Vishwas?Answer : If the substantive addition is eligibleto be covered under Vivad se Vishwas, then onsettlement of dispute related to substantive additionAO shall pass rectification order deleting theprotective addition relating to the same issue in thecase of the assessee or in the case of anotherassessee.” https://hcservices.ecourts.gov.in/hcservices/ 11.The learned Senior Counsel for the petitioner furthersubmits that despite the order passed under Section 154 ofIncome Tax Act, 1961 for the assessment year 2014-15, therespondents are refusing to refund the amount ofRs.95,20,460/- and therefore, submits that the writ petitiondeserves to be allowed. 12.The learned Senior Counsel for the petitioner has alsodrawn the attention to Circular No.71 dated 20.12.1971 issuedby the Central Board of Direct Taxes under Section 119(2)(b)of the Income Tax Act, 1961. The learned Senior Counsel wouldfurther submit that the hardship faced by the assessees on theground of split implementation of the provisions of Income Taxwas considered and it was clarified as under: “In our opinion, no question of law, much less asubstantial question of law, arises in these appeals.It is a settled principle that one particular incomecannot be taxed in the hands of different assessees.In the instant case, as the income has beensubstantively assessed in the hands of the main trust,the same income cannot be again assessed in the handsof the beneficiary trusts. For the sake of abundantcaution, it has been directed by the Tribunal that therevenue should look into the facts and see whether theincome which has been assessed on protective basis inthe hands of the respondent trusts was, in fact,assessed in the hands of the main trust.” 13.The learned Senior Counsel also submits that undersomewhat similar circumstances as in the present case wherethe dispute was settled under 'Kar Vivad Samadhan Scheme,1998' , a batch of appeals numbering 284 was consideredby the Special Bench of the Income Tax Appellate Tribunal,Ahmedabad in Punitaben Karsanbhai Patel Oral v. Income TaxOfficer reported in 2007 (288) ITR 169 Ahd and allowed. 13.The learned Senior Counsel also submits that undersomewhat similar circumstances as in the present case wherethe dispute was settled under 'Kar Vivad Samadhan Scheme,1998' , a batch of appeals numbering 284 was consideredby the Special Bench of the Income Tax Appellate Tribunal,Ahmedabad in Punitaben Karsanbhai Patel Oral v. Income TaxOfficer reported in 2007 (288) ITR 169 Ahd and allowed. 14.The learned Senior Counsel further submits that theviews taken by the Special Bench was also affirmed by theHon'ble Division Bench of the Gujarat High Court in the caseof Commissioner of Income Tax v. Hirenbhai K.Patel reported in2014 SCC OnLine Guj 15765. The learned Senior Counsel submitsthat in the above case, the case that fell for considerationbefore the Special Bench of the Income Tax was pertaining tothe assessee which was a beneficiary Trust of the main Trustcalled S.K.Patel Family Trust having share of income from MainTrust and also interest income from the Main Trust along withtheir independent incomes. The Assessee had taken stand thatthe income attributable to the beneficiary Trusts are to beassessed in the individual hand of the beneficiary Trustswhereas the Income Tax department took a view that the incomeof the Main Trust should be assessed in its own hand. Therethe dispute regarding the taxability of income in the hands ofhttps://hcservices.ecourts.gov.in/hcservices/main Trust reached upto the jurisdictional High Court on reference application and while the reference was pendingbefore the Hon'ble High Court of Gujarat, the Governmentannounced KVSS scheme under which the main Trust settled thedispute regarding taxability of income in its hand by payingappropriate tax and securing the relevant certificate ofcompliance from the concerned CIR/designated authority. It issubmitted that as the income had been taxed in the hands ofthe Main Trust, the beneficiary Trust were held eligible forrefund in the light of the above clarification of Board. 15.The learned Senior Counsel further submits that anidentical submission of the respondents in the present casewas taken which was turned down by the Special Bench of theTribunal which decision has been now affirmed by the Hon'bleDivision Bench of Gujarat High Court in Commissioner ofIncome Tax v. Hirenbhai K.Patel reported in 2014 SCC OnLineGuj 15765 referred supra. 16.Supporting the impugned order and opposing these WritPetitions, the learned Senior Standing Counsel for therespondents submits that the first respondent was incompetentto revise the assessment made on 31.03.2016 under Section 154of the Income Tax Act, 1961. It is submitted further that thesaid exercise carried out by the respondent was contrary tothe decision of the Hon'ble Supreme Court made in the case ofGoetze (India) Ltd., vs. Commissioner of Income Tax reportedin (2006) 204 CTR SC 182. 17.The learned Senior Standing Counsel for the respondentsfurther submits that the Department is also in the process ofpassing appropriate orders under Section 263 of the Income TaxAct against the order passed by the first respondent underSection 154 of the Income Tax Act and therefore, submits thatthe relief sought for by the petitioner cannot be entertained. 18.The learned Senior Standing Counsel for the respondentsfurther submits that though the petitioner had settled thedispute under the Vivad se Vishwas scheme for the assessmentyear 2011-12, the petitioner had admitted to the tax liabilityduring the assessment year 2014-15 by filing the returns underSection 139 of the Income Tax Act, 1961. Therefore, thequestion of refund of the aforesaid amount paid during theassessment year 2014-15 cannot be straightaway allowed. It issubmitted that the order passed by the respondent underSection 154 of the Act was without authority of law and thereis a proposal to go for revision under Section 263 of theIncome Tax Act, 1961. 18.The learned Senior Standing Counsel for the respondentsfurther submits that though the petitioner had settled thedispute under the Vivad se Vishwas scheme for the assessmentyear 2011-12, the petitioner had admitted to the tax liabilityduring the assessment year 2014-15 by filing the returns underSection 139 of the Income Tax Act, 1961. Therefore, thequestion of refund of the aforesaid amount paid during theassessment year 2014-15 cannot be straightaway allowed. It issubmitted that the order passed by the respondent underSection 154 of the Act was without authority of law and thereis a proposal to go for revision under Section 263 of theIncome Tax Act, 1961. 19.It is submitted that in any event, the petitioner hasan alternate remedy by way of an appeal before the AppellateCommissioner and therefore, the petitioner should be directedto approach the Appellate Commissioner as that would be thecorrect method of resolving the dispute. https://hcservices.ecourts.gov.in/hcservices/ 20.By way of rejoinder, the learned Senior Counsel for thepetitioner submits that the decision of the Hon'ble SupremeCourt in the above case cannot apply as the said case wasrendered in the context of peculiar facts of the aforesaidcase. It is submitted that the return was filed on 30.11.1995by the appellant/assessee therein and on 12.01.1998, theassessee wanted to claim deduction by way of a letter beforethe Assessing Officer which was disallowed by the AssessingOfficer on the ground that there was no provision for amendingthe return. 21.The learned Senior Counsel further submitted that inthe said case the appeal filed by the assessee was allowed andon further appeal made by the department, the departmentappeal was allowed. It is further submitted that the decisionwas rendered in the context of Section 254 of the Income TaxAct and that the said decision does not in anyway relate tothe power of the Assessing Officer to entertain the claim forrevision, otherwise than by filing revised return. Therefore,the said decision is also of no consequence. 22.The learned Senior Counsel also referred to theadmission of the respondents in Paragraph 8 of the counterwherein the respondents had categorically admitted that forthe assessment year 2011-12, appropriate tax has been paid bythe petitioner and therefore, there is no justification in notrefunding the amount. 23.Heard the learned Senior Counsel appearing for thepetitioner and the learned Senior Standing Counsel appearingon behalf of the respondents. Perused the orders passed underSection 154 of the Income Tax Act on 08.03.2021 for theassessment year 2014-15 and the settlement of case under theVivad se Vishwas scheme under VSV Act, 2020 for the AssessmentYear 2011-12. 24.There is no dispute that the petitioner has paid thetax for the relevant assessment year viz., 2011-12 andtherefore, the protective assessment for the year 2014-15results in excess payment of tax. The petitioner cannot betaxed twice on the same income. Ultimately, the purpose ofexercising power under the Act is only intended to collectcorrect and just tax under the provisions of the Income TaxAct, 1961 from an assessee. The Act is not intended either tocollect or retain any amount which is not due from anassessee. 25.In this connection, a reference may be made to thedecision of the Hon'ble Supreme Court in Unichem LaboratoriesLtd vs. Collector of Central Excise, Bombay reported in(2002) 7 SCC 145 wherein the Hon'ble Supreme Court held thatit is no part of duty of the department to levy and collecttax which is not due to the department. Relevant passage fromthe said decision reads as follows:https://hcservices.ecourts.gov.in/hcservices/ 25.In this connection, a reference may be made to thedecision of the Hon'ble Supreme Court in Unichem LaboratoriesLtd vs. Collector of Central Excise, Bombay reported in(2002) 7 SCC 145 wherein the Hon'ble Supreme Court held thatit is no part of duty of the department to levy and collecttax which is not due to the department. Relevant passage fromthe said decision reads as follows:https://hcservices.ecourts.gov.in/hcservices/ “12. For the aforementioned reasons, we are of theview that denial of benefit of the notification to theappellant was unfair. There can be no doubt that theauthorities functioning under the Act must, as are induty bound, protect the interest of the Revenue bylevying and collecting the duty in accordance withlaw-no less and also no more. It is no part of theirduty to deprive an assessee of the benefit availableto him in law with a view to augment the quantum ofduty for the benefit of the Revenue. They must actreasonably and fairly.” 26.The above passage squarely applies to the facts of thepresent case as the department has also not disputed the factthat the petitioner has settled the dispute under the Vivadse Vishwas scheme for the assessment year 2011-12 as aconsequence of which the tax offered and paid by thepetitioner during the assessment year 2014-15 had becomeexcess. 27.That apart, under Section 237 under Chapter XIX of theIncome Tax Act, there is no limitation prescribed for grantingrefund of the amount paid in excess as tax. Therefore, I donot find any merits in the submissions made by the learnedSenior Standing Counsel appearing on behalf of therespondents. Therefore, these Writ Petitions deserves to beallowed. 28.These Writ Petitions are thus allowed. No costs. Therespondents are directed to ascertain the correct amount andrefund the amount paid in excess for the Assessment Year 2014-15 by the respective petitioner together with interestpreferably within a period of 45 days from the date of receiptof a copy of this order. //True Copy// Assistant Registrar pgp To 1. The Deputy/Assistant Commissioner of Income Tax, Central Circle – 2 (2), Investigation Wing, Room No.109, 1[st] Floor, New No.46, M.G.Road, Chennai – 600 034. https://hcservices.ecourts.gov.in/hcservices/ 2. The Additional Commissioner of Income Tax, Central Circle – 2, Investigation Wing, Room No.108, 1[st] Floor, New No.46, M.G.Road, Chennai – 600 034. +2ccs to Mr.M.Vivekanandan, Advocate SR. Nos.61789, 61790+2ccs to Mr.A.P.Srinivas, Advocate SR. Nos.61867, 61868 WP.Nos.15762 & 15763 of 2021 KG (CO)PR (09/03/2022)