There is no need to file a separate claim for an income tax refund
Facts and Issue of the Case
Mr.Abhishek Maratha, learned senior standing counsel on behalf of the Respondents- Revenue had stated that Central Processing Centre (CPC), Bangalore had no role to play in the present case within extended time limit specified in ITBA Instruction dated 08th October, 2018 and that refund had not been issued, as the Assessing Officer had to process the return before the due date prescribed under Section 143(1) of the Act after taking approval of CCIT. However, Mr.Abhishek Maratha on the said date of hearing had sought further time to obtain further instructions from the Assessing Officer. Today, Mr.Abhishek Maratha has handed over the instructions received by him from the Assessing Officer.
Apart from adopting the aforesaid submissions, Mr. Maratha points out that as the petitioner’s return was not processed due to technical reason not attributable to assessee, no refund was issued. He emphasises that in the present case, the petitioner had not applied for refund within the extended period of time for processing of the return. He also relies upon the judgment of the Supreme Court in Assistant Commissioner of Income Tax vs. Rajesh Jhaveri Stock Brokers Private Limited, (2008) 14 SCC 208,.
Observation by the Court
The court is of the view that after filing of the return along with due verification and paying taxes as per return, a tax-payer has to simply wait for the refund (as computed in the return) unless the same is disputed by the Tax Department through notices or a defect memo under Section 139(9) of the Act. Since, in the present case, the Assessing Officer has failed to process the return of the petitioner filed in accordance with law within the prescribed time, this Court is of the opinion that the return as declared/filed will have to be treated as ‘deemed intimation’ and an order under Section 143(1) of the Act. This Court is also of the view that an assessee cannot be penalised for inaction on the part of the respondent-department.
Further, the concept of ‘intimation’ under Section 143(1) of the Act and ‘refund’ are entirely different. Second proviso to Section 143(1) of the Act deals with the issue of intimation and not refund as contemplated under Clause (e) of Section 143(1) of the Act. In fact, the concept of ‘refund’ has been separately dealt with under Chapter XIX of the Act. Section 237 of the Act.
This Court is of the view that the assessee need not file any separate claim for refund as the same is deemed to have been incorporated in the return filed by the assessee itself. Further, prior to expiry of time for processing of return or failure of the respondent to process the return within the stipulated and or extended time, the petitioner has no right to expect refund. In fact, upon respondent’s failure to process an assessee’s return within time, the right to refund arises by operation of law.
Moreover, the judgment of the Supreme Court in Rajesh Jhaveri Stock Brokers Private Limited has no application to the facts of the present case inasmuch as it deals with the case of re-assessment and makes a distinction between ‘intimation’ and ‘assessment’ under Section 143(1) and 143(3) of the Act. If the submission of learned counsel for Income Tax Department, as articulated in the instructions received by him from the Assessing Officer is accepted, then it would amount to unjust enrichment on the part of the State, which is legally impermissible. It is pertinent to mention that the principle of unjust enrichment proceeds on the basis that it would be unjust to allow a person to retain a benefit at the expense of another person.
Further, if the respondents do not refund the amount immediately due and payable to the assessee, then interest on the said amount would accrue at the expense of the tax payer. Consequently, the respondents are directed to refund the excess amount paid as tax by the petitioner along with the interest within four weeks of receipt of this order.
The writ petition stands disposed by the court.M.-J.-Engineering-Consultants-P-Ltd-Vs-Income-Tax-Officer-Delhi-High-Court