Wp/22758/2005 Of M/S. Sri Hari Rao And Co v. The Chief Commissioner Of Income Tax

HIGH COURT FOR AT HYDERABAO(SPecial Original Jurisdiction) THURSDAY ,THE [FOURTEENTH DAY OF SEPTEMBER]TWO THOUSAND PRESENT THE HONOURABLE [P.SAM ] ANDTHE HONOURABLE SRI WRIT PETITION NO: [22758 OF ][2005] Between: lvl/s. Sri Hari Rao & [Co., Plot ][No.106']Anapathy Complex, Yellareddiguda,Hyderabad, rep. by [its Partner, Sri Hari ][Rao]..PETITIONER ANO 1. The Chief Commissioner [of ][lncome ][Tax, ][Hyderabad ][-111, ][Hyderabad]Z. The nsst. Commissioner [of lncome Tax, Ward-6(1), Hyderabad'] 5. fne Oeputy Commissioner [of ][lncome Tax, Circle-6(1), Hyderabad'] ...RESPONDENTS Petition under Article [226 ][of ][the ][constitution ][of ][lndia ][praying ][that ][in ][the]circumstances stated in [the ][affidavit ][filed ][therewith, ][the ][High ][court ][may ][be]pleased to issue an appropriate [writ ][or ][direction, ][more particularly ][one in ][the]nature of writ of Mandamus [declaring ][the ][impugned order ][dt. ][14.03.2005 ][passed]by the 1st respondent [as ][illegal ][and unjustified ][in ][the facts ][and circumstances ][of]the case Counsel for the Petitioner: SRl. Counsel for the Respondents: M/s. [B. SAPNA REDDY' ] DEPARTMENTThe Court made the following: THE HON'BLE SRI JUSTICE [P.SAM KOSHY]AND THE IION'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTYW.P. No. 2275a of 2OO5 ORDER: /pe' Ho tt'ble Sri Justice P.SAM lrosHr/ Heard Mr. Dundu Sashank Manmohan, Iearned counsel for thepetitioner and Ms. B. Sapna Reddy, learned Junior Standing Counselfor lncome Tax Department appearing for respondents. 2. The instant writ petition has been filed assailing the order [dated]14 03.2005 passed by respondent No. 1, whereby, the application filedby the petitioner under Section 119(2Xb) of the Income Tax Act, 1961(briefly 'the Act' hereinafter) seeking for condonation of delay in filingthe return for Assessment year 2OO|-O2 claiming relund olRs 1,89,283/-, has treen rejected. 3. The brief facts of the case are that the petitioner had filed [the]original income-tax return on 31.O7 .2OOl for the asse ssmentyear 2O01-O2 declaring a business loss of Rs.5,OO,0OO/- on estimatebasis. The said return was processed under Section 143 of the Act byrespondent No.3. The petitioner had subsequently filed revised returnon 10.06.2O03 declaring loss of Rs.7,99,934/-. Along with the return,tl-re petitioner had also claimed for refund of tax deducted at sourceotr rental income on the basis of Form - 16A. As respondent. No.2 hadnot accepted the revised return, petitioner had Iited an applicationseeking for condonation of delay in filing the revised return. It is this rejection of revised return and the rejection of the claim of thepetitioner for refund of tax deducted at source, which led to filing ofthe present writ petition.the present writ petition. 4. A perus:rl of the impugned Award would reflect tl.at therejection has bc-en made for the reasons as enumerated, herein under: rejection of revised return and the rejection of the claim of thepetitioner for refund of tax deducted at source, which led to filing ofthe present writ petition.the present writ petition. 4. A perus:rl of the impugned Award would reflect tl.at therejection has bc-en made for the reasons as enumerated, herein under: ' I h:rvc r:onsrdcred the aforesaid submissions made by the lcarnedA.R. of th( applicant- I am of the opinion that in the present case therclcvant condition for condoning the delay vtz., tl,e refun<t claimshould not bc supplcmcntary in nature iS not Satished. AS themcaning of thc words is explained in the Instruction itself, there is noquestion of going into its general meaiing. The said lnstructionclcarll, sp<'cifics thc mcaning of "supplementary" refund i.e., the claimshoulcl not hav<: been made for additional amount of refur,d aftercolnplctiorl ol thc original asscssmenI for the same asst. yeal-. In theprcscnt c.rsc, though thc ongrnal return had been liled within timebut thc siilfir hi,d bccn pir,cc:;:;cd bcforc 31.03.2CO2, thcrefo.e, thcsccott(l .cturr-r lil('d alfcr the complction of the original assessnrent lbrthc samc :lsst. ycar rcsults in "supplcmentary" refund which cannotbe allou,cd. ln the orlRlnal return, thc applicant had neither disclosedthc rental ini:ome nor claimcd refund oI the tax deducted at sourcefrom such rcnlal incomc. The TDS ccrtificates had been issuerl to theapplicant prior to thc timc available for hling the revised retumu/s. I3cl(4) of thc Acr. In [(hc ]crrcuI-I]stanccs. I am of thc opinion that the refund clain of thcapplicant rs sLlpplcmelrtary in nature. It does not satisfy the essentialcondition lor condor-ring thc dclal,in filing the return as laid Cown inthc Instructions issucd by the CBDT in F.No.225/2O8/93 IT(A-lt),dt:t2.lO. 1993. Ir.r vicu, of the above, the delay in hling the revisedrcturn bcyond statutory time limit and after the original return hadbccn proccsscd is not condoncd". 5. A plain reading of the aforesaid operative part of the orderpassed by rcspondent No.l would clearly reflect that the decisiontaken by rcspondent No.l was based on the Circular dated72.10.1993. The said circular dated 12.10.199'3 empowered theAssessing Offict'r having jurisdiction over a case to entertain a reftrnclclaim and dispose .rf the same on m-erit-s subject to the claimantsatisfying cerLain conditions enumerated therein. The conditions so enumerated in the [said ][Circular dated ][12' ][1o' ][1993 ][are ][reproduced]herein under "(i)the refund arises [as ][a ][result of ][excess ][tax ][deducted ][source']collccted at source [and ][payments ][of ][advance ][tax under ][thc]p.ouisions of Chapters [XVII-B, XVII-BB ][and ] iespectively and the [amount ][of ][refund ][does ][not ][exceed]Rs. I lakh for [any ][assessment ]Year;collccted at source [and ][payments ][of ][advance ][tax under ][thc]p.ouisions of Chapters [XVII-B, XVII-BB ][and ] iespectively and the [amount ][of ][refund ][does ][not ][exceed]Rs. I lakh for [any ][assessment ]Year; (ii)thc rcturned income [is ][not a ][loss ][where ][the ][assessee ][claims]the bcnellt of carry [forward ][o[ ][the ][loss;]the bcnellt of carry [forward ][o[ ][the ][loss;](iii)thc refund ctaimed is not [supplementary ][in natrlre' ][i ][e ]' [claim]for additionat amount [of ][refund after ][the ][completion ][of ][the]originalassessment [for ][the ][same assessment ][year; and]for additionat amount [of ][refund after ][the ][completion ][of ][the]originalassessment [for ][the ][same assessment ][year; and](i")the income of [the ][assessee ][is ][not ][assessable ][in ][the ][hands ][of]any other [person ][undcr ][any of the provisions of the Act"']any other [person ][undcr ][any of the provisions of the Act"'] 6. During the course of [hearing, learned counsel ][for ][the ][petitioner] produced before the Bench [yet ][another ][Circular ][of ][t'he ][Department]vide Instruction No.12 [ol ][2003, ][dated 30' ][10'2OO3'] 6. During the course of [hearing, learned counsel ][for ][the ][petitioner] produced before the Bench [yet ][another ][Circular ][of ][t'he ][Department]vide Instruction No.12 [ol ][2003, ][dated 30' ][10'2OO3'] 7. A plain reading of [the ][contents ][of Instruction ][No' ][12 ][of ][2OO3]dated 30.1O.2O03 [lvould ][go ][to ][reveal ][that ][vide ][the ][aforesaid ][circular']the Department in [fact had ][relaxed ][certain conditions which ][were ][so]enumerated in the Circular [dated ][l2'l}'1993 ][referred ][in ][the]preceding paragraphs. [The ][relaxed ][conditions ][in ][terms ][of ][the ][Circular]dated 30.1O.20O3 for [ready ][reference ][are ][being ][reproduced ][herein]under: "(i)the refund has [arisen ][as a result of ][excess ][tax]dcductcd /coltected [at ][source ][and ][payments ]9f [adva,n99.-11]under the [provisrons ][of ][ChaPters ][XVIIB, ] [and ][XVITC']rcspcctively and the [amount ][of ][refund ][does ][not ][cxceed]Rs.5,00,0OO/- [for ][any ][one assessment ][year;]dcductcd /coltected [at ][source ][and ][payments ]9f [adva,n99.-11]under the [provisrons ][of ][ChaPters ][XVIIB, ] [and ][XVITC']rcspcctively and the [amount ][of ][refund ][does ][not ][cxceed]Rs.5,00,0OO/- [for ][any ][one assessment ][year;] (ii )the income of the [assessee ][is ][not ][assessable ][in ][the ][hands ][of]zrnl' <lther person [under ][any of the ][provisions ][of the ][Act;]zrnl' <lther person [under ][any of the ][provisions ][of the ][Act;] (ii i)no i nte rcst wilt bc admissible [on ][the ][belated ][relund ][claims;] (it") it the refund arises from thc rcrurn of incornc filcd for the firsrtimc, thcn thc CCIT u,ill bc cmporvercd to dircct the n ssessinBO [ficei io trai<c a regular asscssmcnt ur)der scctio 1 143(3)atrd thcn issuc thc refutrd, iI any;-timc, thcn thc CCIT u,ill bc cmporvercd to dircct the n ssessinBO [ficei io trai<c a regular asscssmcnt ur)der scctio 1 143(3)atrd thcn issuc thc refutrd, iI any;- 8. A plain reading of the aforesaid conditions would clearlyindicate that the authorities concerned had at the llrst instancerelaxed the conditions so far as the supplementary claim as wasreflected in the previous circular dated I2.lo. 1g93. In ilddition to theaforesaid, the authorities while issuing the said Instruction dated30' 10'2003 had also increased thc rimit of the amount .f refund fromRs.l,OO,OOO/- lo Rs.5,OO,OOO/- for any one assessmcnt vear. 9. These tr.r.o conditions, which stood relaxed or revised videsubsequen[ Circular datcd 3O.10.20OI] w()uld go Lo show that thecondition on which r-espondenr No. I had rejected the application filedby the petitiolter was unsustainable, Thc subsequent Ctircular dated30. 10.2003 r,r,,as made applicable to all those cases u,here the returnswcrc filed subsequerrL Lo the asscssment year t9g6_t_r7 rx,hich includesthe assessment _vear 2OO 1-O2 in respect o[ the petitioner. lO. Another tact which is notcr;r,orthy to appreciate is that theCircular dated 30. 10.2003 was already available and in lorce whenrespondent No. t had passed the impugncd order rejecting the claim ofthe petitioner. There is no discussion or any reference made byrespondent No. I rvhile passing rhc impugncd order so far as Circulardated 3O- 1O.2OO3 is concernecl_ Rcspo n<.!r-,r-rt No.I has also not dealt tI with the issue whether Circular dated 30.1O.2OO3 would had beenapplicable or not so far as the claim of the petitioner is concerned. 11. A plain reading ol the Circular dated 30. 1O.2OO3 would give aclear indication that the authorities concerned vide the said Circularhad relaxed and modihed the conditions stipulated in the previousCircular dated 12.10.1993 both in respect of the upper limit so far asclaim of refund amount is concerned and also as refards the aspectwhether it was in the form of a supplementary additional claim or not. tI with the issue whether Circular dated 30.1O.2OO3 would had beenapplicable or not so far as the claim of the petitioner is concerned. 11. A plain reading ol the Circular dated 30. 1O.2OO3 would give aclear indication that the authorities concerned vide the said Circularhad relaxed and modihed the conditions stipulated in the previousCircular dated 12.10.1993 both in respect of the upper limit so far asclaim of refund amount is concerned and also as refards the aspectwhether it was in the form of a supplementary additional claim or not. 12. In view o[ the fact that the Circular dated 3O.1O.2OO3 wasalready in force when the impugned order was passed, we find itdifhcult to accept the contention of respondent No.l. The claim o[ thepetitioner for refuncl of ['lDS ]was for an amount of Rs.1,89,283/-which is much less than Rs.5,OO,OOO/- upper limit that has beenreflected in t-[re Circular dated 30.IO.2O03. Therefore, we hnd noreason as to why the rcspondent authorities should not haveconsidered the aforcsaid Circular dated 3O.1O.2OO3 while deciding theclaim of the petitioncr, when his claim was for refund of tax deductedat sotlrce. Nonetheless, [hcre is no dispute that the petitioner claimstax deduction at source from the income that has generated from thesaid assessment year only and the return which was submitted byhim at the first instance was accepted and there.is no additionalincome that he had made tt hile submitting the revised return on thebasis of the tax deducted at source is concerned. Ij 13. For the aforesaid rcasons, the impuqneci order dated14.O3.2OO5 passed by respondent No. l, is not sustainable and thesame deserves to be and is accordingly hetd to be bid in law in view ofthe Instruction No. 12 of 2OO3, dated 30.10.2OO3 is concerned. 14. In vieu, therecf, the Writ petition stands allowed and thepetitioner is entitled for the refund of thc amount of trrx deducted atsource. No order as to costs. Consequently, miscellaneous peLitions penc{ing, it any, shallstand closed.stand closed. That Rule Nisi has [been ][made absolute ][as ][above']witness The Hon'ble [The ][chief ][Justice ] [, ][On ][This Thursday,The]Fourteenth Day Of [September ][Two Thousand And Twenty ][Three] SD/. K. VENKAIAHASSISTAryT REGISTRAR//TRUE COPY/I L&SECTION OFFICER To,1.The Chief Commissioner [of ][lncome ][Tax, ][Hyderabad ][-lll, ][Hyderabad']2.fn" A"ii- Commissioner [of lncome ][Tax, ][Ward-6(1), ][Hyd.erabad']1.The Chief Commissioner [of ][lncome ][Tax, ][Hyderabad ][-lll, ][Hyderabad']2.fn" A"ii- Commissioner [of lncome ][Tax, ][Ward-6(1), ][Hyd.erabad'] 3.The Deoutv Commissioner of [lncome Tax, ][Circle-6(1), ][Hyderabad' ]- --4.on" ci to'sRl. DUNDU [IVIANMOHAN' ][Advocate ][toPVgJ.-..-]5.il; cc i" r'4l.. [e. ][sAptln ][REDDY, ][sc ][FoR ][INCoME ][rAX ] toPUCl4.on" ci to'sRl. DUNDU [IVIANMOHAN' ][Advocate ][toPVgJ.-..-]5.il; cc i" r'4l.. [e. ][sAptln ][REDDY, ][sc ][FoR ][INCoME ][rAX ] toPUCl 6Two CD Copies BM GJP HIGH COURT DATED:1 [4 ]10912023 ORDER?:'::=-\:.'-l. ['\ ]ltli,1:[r]c-WP.No.22758 [of ][2005]'(qcO10 0[T 2mI* ALLOWING WITHOUT COSTS $P3$l\z