Wp-2594-13.Sxw v. Asn

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.2594 OF 2013 Ms. Nafisa Shaikhally....Petitioner. vs.TheCommissioner of Income Tax 26 and ors....Respondents. Mr. N.R.Nargolkar i/by Mr. Nandan Vaidya for the Petitioner.Mr. Arvind Pinto for the Respondents. CORAM : MOHIT S. SHAH, C.J. AND M.S. SANKLECHA, J. DATE : 15 JANUARY, 2014 PC: Rule, returnable forthwith. By consent and at the request of the Counsel, the petition is taken up for final disposal. 2)This petition filed by a Senior Citizen challenges the action of the respondent revenue in not entertaining the petitioner's application for refund of Tax deducted at source (TDS) by Reserve Bank of India (RBI) on the payment made to her in the year 2004 when she opted for the Optional Early Retirement Scheme (Scheme). This non entertaining the application for condonation of delay for claiming refund was on the ground that it was made beyond six years from the end of the relevant assessment year 2004-05 and thus could not be considered under Section 119(2)(b) of the Income Tax Act, 1961 (“the Act”). 3)The RBI while making the payment to the petitioner under the Scheme had deducted as tax at source an amount of Rs.1,65,557/-. However, in her return of income for assessment year 2004-05 filed on 20 September 2004 the petitioner did not claim any refund of tax as TDS paid by RBI on her behalf nor was the credit on tax utilized to discharge tax payable on any other income. 4)It was only on 8 May 2009 that the Central Board of Direct Taxes (CBDT) issued a Circular clarifying that the employees of RBI who had opted for early retirement scheme during the year 2004-05 would be entitled for benefit of exemption under Section 10(10C) of the Act. In view of the above circular dated 8 May 2009 issued by the CBDT the petitioner filed a revised return of income on 30 September 2009 claiming benefit of exemption available to the Scheme under Section 10(10C) of the Act which consequently would result in refund of Rs.1.65 lacs paid by RBI as TDS. However, there was no response to the above revised return of income from the respondent-revenue. 5)On 5 March 2013, the petitioner filed an application with the Commissioner of Income Tax under Section 119(2) (b) of the Act seeking condonation of delay in filing her application for refund in the form of revised return of income for assessment year 2004-05. The respondent revenue are refusing to entertain the application under Section 119(2)(b) of the Act on the ground that in view of Instruction No.13 of 2006 dated 22 December 2006 by the CBDT an application claiming refund cannot be entertained if the same is filed beyond the period of 6 years from the end of the assessment year from which the application is made. In the affidavit in reply dated 9 December 2013 the Commissioner of Income Tax states that he is bound by the above instructions issued by the CBDT and consequently the claim for refund cannot be considered. 6)It is not disputed by the respondent revenue that on merits the petitioner is entitled to the benefit of refund of TDS as the payment received under the scheme is exempted under Section 10(10C) of the Act. The decision of the Apex Court in the matter of Chandra Ranganathan and ors. Vs. CIT (2010) 326 ITR 49 (SC) concludes the issue. This is also the view of the revenue as clarified in CBDT Circular dated 8 May 2003. The application under Section 119(2)(b) of the Act is being denied by adopting a very hyper technical view that the application for condonation of delay was made beyond 6 years from the date of the end of the assessment year 2004-05. In this case the revised return of income filed on 30 September 2009 should itself be considered as application for condonation of delay under Section 119(2)(b) of the Act and refund granted. the Act and refund granted. 7)It is to be noted that the respondent revenue do not dispute the claim of the petitioner for refund on merits but the same is being denied only on hyper technical view of limitation. It will be noted that on 8 May 2009 the CBDT issued a circular clarifying and reviewing its earlier decision to declare that the employees of RBI who opted for early retirement scheme under the Scheme will be entitled to the benefit of Section 10(10C) of the Act. Immediately after the issue of circular dated 8 May 2009 by the CBDT the petitioner filed on 30 September 2009 a revised return of income seeking refund of TDS paid on her behalf by RBI. 8)In the above view, we allow the petition and direct the respondent-revenue to grant refund due to the petitioner. 9)The petition is allowed in the above terms. No order as to costs.to costs. CHIEF JUSTICE (M.S. SANKLECHA, J.)