Wp/1845/2019 Of Tata Communications Limited v. Deputy Commissioner O Income Tax1 (3) (2) And 5 Ors

JPP IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 1845 OF 2019 Tata Communications Limited… Petitioner V/s. Deputy Commissioner of Income Tax – 1(3)(2) and Ors... Respondents. Mr. J.D. Mistri, Senior Advocate i/b. Mint and Conferers the Petitioner. Mr. Suresh Kumar for the Respondent Nos. 1 to 4. CORAM : M.S. SANKLECHA & NITIN JAMDAR, JJ. DATE : 16 SEPTEMBER 2019. P.C.:- Mr. Mistri, learned Senior Advocate seeks leave toamend the Petition so as to annex the communication dated 18 July2019 addressed by the office of the Respondent No.3 to theAssessing Officer – Respondent No.1 with a copy to the Petitionerand also challenge the same to the extent it seeks to withhold refundconsequent to the revised return of income dated 27 March 2019.Leave as sought is granted. Amendment to be carried out forthwith. Re-verification is dispensed with. Amendment to be carried out onthe Respondent copy immediately. 2.This Petition under Article 226 of the Constitution ofIndia seeks : (a) direction to the Respondent – No.1 DeputyCommissioner of Income Tax to process the Petitioner’srevised return filed on 27 March 2019 for theAssessment Year 2017-18 under Section 143(1) of theIncome Tax Act, 1961 (the Act) and grant theconsequent refund of Rs. 72.16 crores alongwith interestthereon; (b) quashing of the notice dated 14 November 2018issued by the office of the Principal Commissioner ofIncome Tax – Respondent No.3 seeking to withhold therefund due to the Petitioner under Section 241A of theAct for Assessment Year 2017-18 in respect of theoriginal return of income filed on 30 March 2017 by thePetitioner; and (c) quashing of the communication dated 18 July 2019addressed by the office of Respondent No.3 seeking to withhold refund due to the Petitioner under Section241A of the Act for Assessment Year 2017-18 in respectof the revised return of income filed on 27 March 2019by the Petitioner. 3.On 30 November 2017, the Petitioner filed its return ofIncome for Assessment Year 2017-18 declaring a total income ofRs.227/- crores and seeking refund of Rs.92.83 crores. This refundwas due to the Petitioner on the return being processed underSection 143(1) of the Act. In spite of Petitioner’s requests/remindersto the Respondent No.1 - Assessing Officer. The same was notprocessed. 4.Despite not having processed the return of income underSection 143(1) of the Act, on 14 November 2018 a notice was issuedby the office of Respondent No.3 – Principal Commissioner ofIncome Tax. The above impugned notice was for hearing thePetitioner on the proposed action of Respondent No.3 to withholdthe refund relatable to Assessment Year 2017-18 in view of Section241A of the Act. 5.The Petitioner protested by various representations tothe Respondents that Section 241A of the Act could only beinvoked, after the refund due is determined under Section 143(1) of the Act. However, that till date no order has yet been passed by theRespondents on the impugned notice dated 14 March 2018. 6.On 27 March 2019 the Petitioner filed a revised returnof income for the Assessment Year 2017-18. It revised its income toRs.233 crores and sought a refund of Rs.72.16 crores. This revisionof income was on account of retrospective amendment to Section43AA of the Act and certain other claims. 7.This revised return of income filed on 27 March 2019,has not yet been processed under Section 143(1) of the Act. Thisinspite of numerous representations on behalf of the Petitioner.Thus leading to the filing of this Petition. This revised return of income filed on 27 March 2019, the Act. However, that till date no order has yet been passed by theRespondents on the impugned notice dated 14 March 2018. 6.On 27 March 2019 the Petitioner filed a revised returnof income for the Assessment Year 2017-18. It revised its income toRs.233 crores and sought a refund of Rs.72.16 crores. This revisionof income was on account of retrospective amendment to Section43AA of the Act and certain other claims. 7.This revised return of income filed on 27 March 2019,has not yet been processed under Section 143(1) of the Act. Thisinspite of numerous representations on behalf of the Petitioner.Thus leading to the filing of this Petition. This revised return of income filed on 27 March 2019, 8.The Respondent No.1 – the Assessing Officer has filedan affidavit in reply dated 5 August 2019 to this Petition. In its replyit is stated that on the filing of the revised return of income on 27March 2019, the original return of income filed on 30 November2017 stands abandoned, thus, the Revenue would now only dealwith the revised return of income filed on 27 March 2019 for thesubject Assessment Year 2017-18. The affidavit in reply furtherannexes a copy of the communication dated 18 July 2019 addressedby the Principal Commissioner of Income Tax – Respondent No.3to the Assessing Officer to withhold the refund due for AssessmentYear 2017-18 under Section 241A of the Act. 9.Before dealing with the issue arising in this case, it wouldbe necessary to reproduce Section 241A of the Act, introduced w.e.f.1 April 2017. It reads as under :- "241A. Withholding of refund in certain cases.—Forevery assessment year commencing on or after the 1stday of April, 2017, where refund of any amountbecomes due to the assessee under the provisions of sub-section (1) of section 143 and the Assessing Officer is ofthe opinion, having regard to the fact that a notice hasbeen issued under sub-section (2) of section 143 inrespect of such return, that the grant of the refund islikely to adversely affect the revenue, he may, forreasons to be recorded in writing and with the previousapproval of the Principal Commissioner orCommissioner, as the case may be, withhold the refundup to the date on which the assessment is made.". Section 241A of the Act empowers the Assessing Officer to withholdthe refund which has become due for reasons stated therein, thisonly after determining the refund due under Section 143(1) of theAct. It is an undisputed position before us that neither the regularreturn of income dated 30 November 2017 nor the revised return ofincome dated 27 March 2019 for the subject Assessment Year hasbeen processed under Section 143(1) of the Act till date.Consequently, the occasion to withhold any refund under Section241A of the Act at this stage does not arise. Therefore, on theadmitted facts the application/invocation of Section 241A of the Actis premature. 10.In view of the admitted position that neither the originalor the revised return of income for the Assessment Year 2017-18 hasbeen processed under Section 143(1) of the Act, invoking of Section241A of the Act would be without authority of law. Thus, theimpugned show cause notice dated 14 November 2018 is quashedand set aside not only on the above ground but also as the affidavitin reply states that the original return of income stands abandoned,on filing of revised return of income. The impugned notice is inpursuance of the original return of income filed on 30 November20917. Similarly, the communication dated 18 July 2019 addressedby the Office of Respondent No.3 – Principal Commissioner ofIncome Tax to the Deputy Commissioner of Income Tax - AssessingOfficer approving to the proposal to withhold the refund due for theAssessment Year 2017-18 under Section 143(1) of the Act is alsowithout jurisdiction. This as the refund due has admittedly not beendetermined under Section 143(1) of the Act. Therefore, quashedand set aside. 11.Mr. Suresh Kumar, learned Counsel appearing for theRespondent – Revenue on instructions of Mr. Rahul Singhania –Respondent No.1 – Assessing Officer states that the revised return ofincome filed on 27 March 2019 would be processed under Section143(1) of the Act within a period of eight weeks from today. Thestatement is accepted. 12.The Petition is disposed of in the above terms. No orderas to costs. NITIN JAMDAR, J. M. S. SANKLECHA, J .