Gujarat High Court
Gujarat Gas Trading Co. Ltd vs Commissioner Of Income Tax & on 6 September, 2016
Author: Akil Kureshi
Bench: Akil Kureshi, A.J. Shastri
C/SCA/2514/2011 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
SPECIAL CIVIL APPLICATION NO. 2514 of 2011
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE A.J. SHASTRI
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1 Whether Reporters of Local Papers may be allowed to see the
judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair copy of the
judgment ?
4 Whether this case involves a substantial question of law as to
the interpretation of the Constitution of India or any order made
thereunder ?
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GUJARAT GAS TRADING CO. LTD....Petitioner(s)
Versus
COMMISSIONER OF INCOME TAX & 1....Respondent(s)
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Appearance:
MR MANISH J SHAH, ADVOCATE for the Petitioner(s) No. 1
MRS MAUNA M BHATT, ADVOCATE for the Respondent(s) No. 1 - 2
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CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI
and
HONOURABLE MR.JUSTICE A.J. SHASTRI
Date : 06,07/09/2016
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE AKIL KURESHI) Page 1 of 22 HC-NIC Page 1 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT
1. The petitioner has challenged an order dated 3.12.2010 passed by the respondent Commissioner of Income tax in the following background.
2. The petitioner is a company registered under the Companies Act. For the assessment year 20032004, the petitioner had filed a return of income. In the accounts for the financial year 20022003 relevant to the previous assessment year 20032004, the petitioner had made a provision for commission for performance guarantee of Rs.69.50 lacs payable to the suppliers and also provided for aggregate commission of Rs.1.18 crores (rounded off) for the purchases. Since this expenditure was allowable under section 37 of the Income Tax Act, 1961("the Act" for short), the same was debited to Profit and Loss account and the business profit was accordingly computed. According to the petitioner, however, while computing the profit and loss of the business, due to misunderstanding, these amounts totalling to Rs.1.87 crores (rounded off) were added back while computing total income. According to the petitioner, thus the returned income of Rs.3.31 crores (rounded off) included this sum of Rs.1.87 crores erroneously added. In the statement of income accompanying the return for the assessment year 2003 2004, the petitioner had put the following note :
"During the year under review the assessee company has made provision for commission for performance guarantee given to suppliers on behalf of the company of Rs.69,50,000/ and has also provided for commission on purchase aggregating to Rs.1.18,21,456/. The same has been disallowed and will be claimed when actual payment Page 2 of 22 HC-NIC Page 2 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT with necessary documents will be made as the company is still in the process of negotiating the same."
3. Case of the petitioner further is that these amounts were payable to one BG Energy Holdings Ltd. in accordance with the agreement between the parties and the expenditure was thus allowable deduction which the petitioner wrongly did not claim. In fact, such amount of Rs.1.87 crores was paid by the petitioner for the subsequent year but was not claimed since the petitioner followed the mercantile system of accounting.
4. The return of the petitioner was accepted by the Assessing Officer under section 143(1) of the Act without scrutiny. The Assessing Officer in terms of the return also issued a refund order dated 31.3.2005 for a sum of Rs.32,710/. According to the department, the refund was sent to the petitioner along with an intimation of acceptance of return under section 143(1) of the Act. Though the petitioner disputes having received any such intimation, it is not in dispute that the refund was received by the petitioner and was credited in the petitioner's bank account on 11.5.2005.
5. The petitioner having realised the error in not claiming the deduction of expenditure on accrual basis while filing the return, filed a petition before the Commissioner under section 264 of the Income Tax Act on 29.12.2008 seeking revision of the intimation/order under section 143(1) of the Act. The Commissioner under a communication dated 1.4.2009 conveyed to the petitioner that if the intimation under section 143(1) of the Act was served on 27.3.2009 as Page 3 of 22 HC-NIC Page 3 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT contended by the petitioner, revision petition was premature. He therefore, called upon the petitioner to produce necessary evidence in support of the date of receipt/communication of the intimation under section 143(1) of the Act, failing which, the revision petition will be rejected as premature.
6. Instead of replying to the show cause notice, the petitioner filed a fresh petition for revision on 13.4.2009. This revision petition was rejected by an order dated 3.12.2009 interalia, on the ground that the revision petition was filed after a lapse of about six years. The petitioner thereupon approached the High Court by filing Special Civil Application No.3760/2010. The petition came to be disposed of by the judgement dated 13.7.2010. The Court was of the opinion that if the Commissioner desired to dismiss the revision petition on the ground of delay, petitioner should have been put to notice thereof. In the process, the petitioner had no opportunity to explain the delay. The Court therefore, gave the following directions :
"For the foregoing reasons, the petition succeeds and is accordingly allowed. The impugned order dated 03.12.2009 (AnnexureC) made by respondent Commissioner is hereby quashed and set aside. The revision application bearing File No.: CITII/Jud/Tech/264/02/200910 is restored to the file of the Commissioner. The Commissioner shall decide the same afresh in accordance with law after giving the parties an opportunity of hearing. If the Commissioner is of the view that the application under section 264 of the Act is barred on the ground of delay, the Commissioner shall decide the same as a preliminary issue after putting the petitioner to notice and giving it an opportunity of hearing. Rule is made absolute accordingly."Page 4 of 22
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7. The Commissioner thereupon issued a show cause notice dated 6.10.2010 in which he pointed out to the petitioner that the refund order dated 31.3.2005 was dispatched along with intimation under section 143(1) of the Act as was evident from the issue stamp on the office copy of the intimation. Refund order of Rs.32,710/ was also duly credited in the bank account of assessee on 11.5.2005. It would therefore, appear that the petitioner had received the refund order and the intimation prior to the said date. The revision petition was therefore, filed beyond the period of limitation. The Commissioner also raised the issue of maintainability of the revision petition prima facie, conveying to the petitioner that against intimation under section 143(1) of the Act, the revision petition would not be maintainable. With these tentative findings, the Commissioner called upon the petitioner to appear for personal hearing.
8. The petitioner replied to such notice under a letter dated 12.11.2010 and contended that though the petitioner received the refund order, had never received the intimation under section 143(1) of the Act at the relevant time. The company had written a letter dated 18.2.2005 to the Income Tax officer pointing out that the Company had received neither the intimation nor the refund upon which the Assessing Officer appears to have issued a refund order of Rs.32,710/ on 31.3.2005 but no copy of intimation was served on the petitioner. In addition to such explanation, the petitioner also placed reliance on various judicial pronouncements to contend that delay should be liberally Page 5 of 22 HC-NIC Page 5 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT viewed.
9. Ignoring such pleas of the petitioner Commissioner by impugned order dated 3.12.2010 rejected the revision petition on the ground of delay as well as maintainability. On the ground of delay, the Commissioner relied on a report of the Assessing Officer which showed that along with refund order dated 31.3.2005, intimation under section 143(1) of the Act was also dispatched as would be evident from the issue stamp on the office copy of the intimation. Commissioner noted that refund was duly credited in the account of the petitioner on 11.5.2005; that there was a practice of the department to invariably communicate the intimation along with the refund. Taking note of the provisions under section 264(3) of the Act, the Commissioner was of the opinion that there was substantial delay and that same was not properly explained. He therefore, held that revision petition was barred by limitation.
10. The Commissioner was also of the opinion that intimation under section 143(1) of the Act was not a revisable order. The Commissioner relied on decision of Karnataka High Court in case of Avasaraja Automation Ltd. v. Deputy Commissioner of Incometax reported in (2004) 269 ITR 163, in which referring to deletion of explanation to section 143 with effect from 1.6.1999, it was held that petition under section 264 of the Act against intimation in respect of assessment year 20032004 is not maintainable but the rights already vested for earlier years would not be taken away by amendment.
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C/SCA/2514/2011 JUDGMENT
11. It is this order, the petitioner has challenged in the present petition.
12. Appearing for the petitioner, learned counsel Shri J.P. Shah raised the following contentions :
07.09.2016
1) The petitioner had sufficiently explained the delay in filing the revision petition. Question of delay should have been considered liberally. The Commissioner ought to have appreciated that the petitioner had not received the intimation from the Assessing Officer of acceptance of the return. The Commissioner committed a serious error in holding that the petitioner failed to show sufficient cause in late filing of the revision petition. In this context, the counsel relied on the decision of the Supreme Court in case of N. Balakrishnan v. M. Krishnamurthy reported (1998) 7 Supreme Court Cases 123.
2) Counsel further submitted that against the order accepting the return under section 143(1) of the Act, revision was maintainable before the Commissioner under section 264 of the Act. Even acceptance of assessment without scrutiny and intimation thereof in terms of section 143(1) of the Act, is an order of assessment, may be without scrutiny. In any case, under section 264, any order is subject to revision and not only an order of assessment. Thus the Commissioner wrongly held that against the said order of Assessing Officer, revision petition was not maintainable. In this connection, counsel placed reliance Page 7 of 22 HC-NIC Page 7 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT on the following decisions :
1) C. Parikh & Co. v. Commissioner of Income tax, Baroda reported in (1980) 122 ITR 610 (Guj)
2) Assam Roofing Ltd. v. Commissioner of Incometax reported in (2014) 43 taxmann.com 316 (Gauhati)
3) Ramdev Exports v. Commissioner of Incometax reported in (2001) 251 ITR 873
4) Vijay Gupta v. Commissioner of Incometax, DelhiIII reported in (2016) 68 taxmann.com 131 (Delhi)
3) Counsel further submitted that in any view of the matter, department can tax only the real income. The department cannot capitalise out of a mistake committed by the assessee and retain the amount not due to the department in form of tax. In this context counsel placed heavy reliance on the decision of Bombay High Court in case of Bhartiya Engineering Corporation (P) Ltd v. R.G. Deshpande, Additional Commissioner of Income tax reported in (1981) 130 ITR 442 (BOM), in which referring to the assurances given by the Public Accounts Committee that the time barred claims for refund would be condoned, the Court deprecated the actions of tax authority and CBDT which were against such assurances. In this context, counsel also placed heavy reliance on section 237 of the Act to contend that whenever the assessee satisfies the Assessing Officer that amount of tax paid by him exceeds the amount with which he is properly chargeable Page 8 of 22 HC-NIC Page 8 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT under the Act, for a particular year, he would be entitled to refund of the excess. Referring to the decision of Division Bench of this Court in case of Taiyabji Lukmanji v. Commissioner of Income Tax, GujaratV reported in (1981) 131 ITR 643, counsel submitted that the action of the department in retaining the excess tax would shake the credibility of the department.
13. On the other hand learned counsel Mrs. Mauna Bhatt for the department opposed the petition raising the following contentions :
1) There was sufficient material on record to suggest that at the relevant time, the petitioner was served with refund order and the intimation under section 143(1) of the Act.
The revision petition was filed several years later which was clearly barred by limitation. The explanation offered for such delay was not satisfactory. The Commissioner therefore, correctly dismissed the revision petition on the ground of limitation.
2) The revision petition was otherwise also not maintainable. The intimation under section 143(1) of the Act is neither an order of assessment nor an order which in terms of section 264 of the Act is revisable. It is a mere administrative action of intimating to an assessee that his return is accepted. This would be clear from the legislative changes made in section 143(1) of the Act with effect from 1.6.1999 when the explanation was dropped. She submitted that prior to 1.6.1999 under section 143(1) of the Act, the Assessing Officer had the power to make prima Page 9 of 22 HC-NIC Page 9 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT facie adjustments. Due to this, the intimation under section 143(1) of the Act was deemed to be an order of assessment for the purpose of section 264 of the Act. In support of this contention, counsel relied on the following decisions :
1) Decision of Kerala High Court in case of Commissioner of Incometax v. K.V. Mankaram and Co. reported in (2000) 245 IR 353.
2) Decision of Karnataka High Court in case of Avasaraja Automation Ltd. (supra)
3) The petitioner cannot claim refund without change in the assessment. The petitioner did not file any revised return within the time permitted under the statute nor sought for rectification of the order under section 143(1) of the Act. The petitioner cannot straightway claim refund on the ground that the return did not contain the correct disclosure and corresponding tax.
14. Having heard learned counsel for the parties and having perused the documents on record, three questions arise for our consideration namely, (1) Whether the Commissioner committed an error in dismissing the revision petition on the ground of unexplained delay?
(2) Whether the Commissioner was correct in holding that against the intimation under section 143(1) of the Act, Page 10 of 22 HC-NIC Page 10 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT revision under section 264 of the Act was not maintainable?
(3) Whether, if our answer to both these questions is in negative, would the petitioner be still entitled to refund of the tax which the petitioner claims to have paid in excess?
15. Our consideration of these questions is as follows :
Question (1)
16. Regarding question (1), we will briefly record the facts relevant to this issue. For the assessment year 20032004, the petitioner having filed the return, the same was processed under section 143(1) of the Act. Since the petitioner did not receive any refund, the petitioner wrote a letter to the Assessing Officer on 18.2.2005 reminding him that the company had neither received refund nor intimation. The Assessing Officer thereafter, issued a refund order dated 31.3.2005 sanctioning payment of refund of Rs.32,710/. This refund was credited in the account of the company on 11.5.2005.
17. The petitioner for the first time filed a revision petition before the Commissioner on 29.12.2008. Upon receipt of such revision petition, the Commissioner called upon the petitioner to show on what basis the revision petition is filed. If the petitioner had not received intimation under section 143(1) of the Act, would such petition not be premature? Instead of replying to said notice from the Commissioner, the petitioner filed a fresh on 13.4.2009. Such petition at one stage was dismissed by Page 11 of 22 HC-NIC Page 11 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT the Commissioner as delayed. The High Court however, asked the Commissioner to put the petitioner to notice and then decide the question of limitation. Thereupon, the petitioner elaborated the grounds of delay contending interalia that the intimation under section 143(1) of the Act dated 31.3.2005 was served on the petitioner for the first time on 27.3.2009. Prior to such date, the company was not served with any such intimation. Along with refund order, no such intimation was attached. Thus there is no delay in filing the revision petition. Even if it is taken that such order of intimation was served on or before 11.5.2005, according to the petitioner, late filing of the revision petition was due to good and sufficient cause. The Commissioner has power to condone such delay.
18. From the above it can be seen that after the petitioner received the refund order which obviously would have been done before 11.5.2005, since the petitioner had credited the refund amount in its account on such date, the first attempt to seek revision of such order was made only on 29.12.2008. Section 264 of the Act pertains to the Commissioner's power of revision. Under subsection(1) of section 264, the Commissioner would have the power to revise any order other than an order to which section 263 applies, which is passed by an authority subordinate to him either of his own motion or on an application filed by the assessee. Subsection(3) of section 264 provides that in case of an application for revision by the assessee, such application must be made within one year from the date on which the order in question was communicated to him or the date on which he otherwise came to know of it, Page 12 of 22 HC-NIC Page 12 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT whichever is earlier. Under proviso to subsection(3), the Commissioner has power to condone delay, if he is satisfied that assessee was prevented by sufficient cause from making the application within such period.
19. Two things thus become clear. One is that the period of limitation would commence from the date on which the order under revision was communicated to the assessee or the date on which he otherwise came to know of it, whichever is earlier. Second aspect is that the Commissioner has the power to condone delay beyond the period of one year, provided, he is satisfied that the assessee was prevented by sufficient cause from making application within such period. In the present case, as noted, the assessee was at any rate served with the order of refund atleast by 11.5.2005. From such date in terms of subsection(3) of section 264, period of limitation would begin to run. In fact, the Commissioner has placed reliance on the report of the Assessing Officer which suggested that not only the refund order but also the intimation under section 143(1) of the Act was dispatched for service to the petitioner. He noted that the practice of the department invariably is to accompany the order of refund with intimation. He therefore, found it difficult to believe the version of the petitioner that only the order of refund was served and not intimation under section 143(1) of the Act. There is nothing on record to overrule these findings of fact. In any case, even without the service of intimation, the petitioner had sufficient knowledge about the acceptance of return as far back as in May 2005. The first attempt to file revision petition, made in December 2008, Page 13 of 22 HC-NIC Page 13 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT was thus merely grossly belated. The only explanation that the petitioner offered was that since the intimation was served much later, there was no delay at all. However, if it was presumed that the limitation began to run from May 2005, what prevented the petitioner from filing the revision petition earlier, there is no explanation at all. The petitioner merely referred to the power of the Commissioner to condone the delay for good and sufficient cause being shown, but did not elaborate, in the present case, what such good and sufficient cause was. The Commissioner in our opinion therefore, committed no error in holding that the petitioner had failed to show sufficient cause for condoning the delay.
Question (2)
20. Regarding question no.2, this issue pertains to maintainability of the revision petition. As noted, under subsection(1) of section 264, the Commissioner has the power to revise any order other than an order to which section 263 of the Act applies, passed by an authority subordinate to him by calling for record of the proceedings and make such inquiry or cause such inquiry to be made and subject to the provisions of the Act, pass such order, not being an order prejudicial to the assessee, as he thinks fit. It was undoubtedly true that reference under sub section(1) of section 264 is to any order passed by an authority subordinate to the Commissioner. Thus clearly the revisional power of the Commissioner under sub section(1) of section 263 are not confined to the orders of assessment. However, when subsection(1) uses the term "any order", surely, it is not meant to cover even mere Page 14 of 22 HC-NIC Page 14 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT administrative orders, without there being any element of deciding any rights of the parties. In this context, we may examine the nature of order under section 143(1) of the Act.
21. Division Bench of Kerala High Court in case of K.V. Mankaram and Co. (supra) held and observed that proceeding under section 143(1)(a) does not result in an order of assessment. For the purpose of sections 154, 246 and 264, the proceeding under section 143(1)(a) is treated as an order by the assessing authority. The intimation given under section 143(1)(a) cannot be treated to be an order of assessment but is only deemed to be such for the limited purpose of sections 246 and 264 of the Act. Except intimation, no other order is contemplated under section 143(1)(a). Under section 246 also a clear distinction is made between an intimation and an order of assessment.
22. In case of Assistant Commissioner of Incometax v. Rajesh Jhaveri Stock Brokers P. Ltd. reported in (2007) 291 ITR 500 (SC), the Supreme Court observed that acknowledgment under section 143(1) is not done by an Assessing Officer, but mostly by ministerial staff. It cannot be stated that by such intimation, assessment is done.
23. Learned Single Judge of Karnataka High Court in case of Avasaraja Automation Ltd.(supra), held that with amendment under section 143 of the Act with effect from 1.6.1999, intimation under section 143 of the Act would no longer be deemed to be an order for the purpose of section 264 and, therefore, for the assessment year 20012002 and Page 15 of 22 HC-NIC Page 15 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT onwards, against any such intimation, revision under section 264 of the Act would not be maintainable.
24. We may also note that an explanation was added below section 143 by the Finance Act 2 of 1991 with effect from 1.10.1991 which reads as under :
"Explanation : An intimation sent to the assessee under subsection(1) or subsection (1B) shall be deemed to be an order for the purposes of section 264."
25. This explanation came to be deleted with effect from 1.6.2009 when section 143 itself underwent major changes. It can thus be seen that during the period when under subsection(1) of section 143, the Assessing Officer had the power of making prima facie adjustments, the legislature provided for an explanation that an intimation sent to the assessee under subsection(1) would be deemed to be an order for the purposes of section 264 with effect from 1.6.1999. Such explanation has been deleted giving a clear indication that such deeming fiction would no longer apply. In other words, as long as the Assessing Officer had the power to make prima facie adjustments while processing the returns of the assessee under section 143(1) of the Act, by a deeming fiction, it was considered as an order for the purpose of section 264 of the Act and, therefore, revisable. Once with amendment of section 143, such powers were rescinded, it was thereafter, no longer necessary to provide for any refund against a mere intimation under section 143(1) and a corresponding change was therefore, made by deleting the explanation and withdrawing the deeming fiction. We therefore, accept Page 16 of 22 HC-NIC Page 16 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT the view of the Commissioner that against the intimation under section 143(1) of the Act, the revision petition was not maintainable.
26. However, before concluding this issue, we must refer to the decisions cited by the counsel for the petitioner. In case of C. Parikh & Co. (supra), facts were that for the assessment year 19661967, the petitioner firm had submitted return of income declaring income of Rs.58,353/, which was based on gross total profit at 10% against 7% disclosed in the earlier year. The Assessing Officer in the scrutiny assessment noted that the gross profit rate had increased but, nevertheless, in absence of complete quantity details and check on closing stock, made a lumpsum addition of Rs.1000/ to the book results disclosed by the petitioner. After the order of assessment was passed, the petitioner upon examination of books of accounts found that there was difference in the balance sheet. The assessee detected a mistake in totalling of the purchases which led to an error of Rs.20,000/. The petitioner therefore, made an application to the Commissioner under section 264 of the Act and requested for correction of such mistake. The Commissioner held that such mistake could not be corrected in exercise of revisional powers. It was in this background, the Court held that no such restriction as read by the Commissioner exist under subsection(1) of section 264 of the Act. It was held that once it was found that there was a mistake in making the assessment, the Commissioner had the power to correct it under section 264(1) of the Act. Significantly, this decision focuses on the question whether whose Page 17 of 22 HC-NIC Page 17 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT mistake it was, of the assessee or of the Assessing Officer, which can be corrected by the Commissioner in revisional powers and did not concern the question whether an intimation under section 143(1) of the Act was open to revision under section 264 of the Act.
27. In case of Ramdev Exports (supra), brief facts were that for two assessment years, 19961997 and 19971998, the petitioner had filed returns of income. The return for the assessment year 19961997 was processed after scrutiny. The return for the assessment year 19971998 was accepted under section 143(1) of the Act. After the assessments were over, the assessee filed revision application before the Commissioner concerning both the years submitting that the assessee was entitled to deduction under section 80HHC of the Act, but such deduction was not claimed. Under such revision petition, the assessee requested the Commissioner to grant such deduction. Since the Commissioner refused, the assessee filed the petition. In such background, the Division Bench of this Court referring to and relying upon the decision in case of C. Parikh & Co. (supra) and other similar decisions, held that the Commissioner ought to have examined the claim of the petitioner, even though no such claim was made before the Assessing Officer. In this case, once again the question of maintainability of a revision petition against a mere intimation under section 143(1) of the Act, did not arise. As noted, for the assessment year 19961997, the assessment was framed after scrutiny. For the year 19971998, explanation to section 143 would apply, making even the intimation deemed to be an order Page 18 of 22 HC-NIC Page 18 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT for the purpose of section 264 of the Act.
28. In case of Assam Roofing Ltd. (supra), the Division Bench of Gauhati High Court for the return of assessment year 20022003 did hold that even an intimation under section 143(1) of the Act shall be subject to revision under section 264. To come to such a conclusion, however, the Court relied solely upon the decision of this Court in case of C. Parikh & Co. (supra) which, as noted, pertained to a question whether a claim not made by the assessee in the return and not processed before the Assessing Officer, could be granted in a revision petition by the Commissioner. The decision of this Court in case of C. Parikh & Co. (supra) did not concern the question of maintainability of revision petition against an intimation under section 143(1) of the Act when such provision did not include the power of prima facie adjustments.
29. Likewise, the Delhi High Court in case of Vijay Gupta (supra), also has placed heavy reliance on the decision of Gauhati High Court in case of Assam Roofing Ltd. (supra) and of this Court in case of S.R. Koshti v. Commissioner of Income Tax reported in (2005) 276 ITR 165, besides relying on the decision in case of C. Parikh & Co. (supra). We have perused the decision of this Court in case of S.R. Koshti (supra) which did not concern this question at all. The Delhi High Court in this case of Vijay Gupta (supra) also noted that before the Commissioner, the petitioner had challenged not only the intimation under section 143(1) of the Act but also rejection of application under section 154. Thus this decision is clearly Page 19 of 22 HC-NIC Page 19 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT distinguishable.
30. For such reasons, we hold that even on question (2), the Commissioner did not commit any error.
Question (3)
31. This brings us to the last issue, namely, despite the impugned order of the Commissioner being correct on both counts, can the petitioner still seek refund of the alleged excess tax paid? We may recall in this context, counsel for the petitioner had placed heavy reliance on section 237 of the Act and the decision of Bombay High Court in case of Bhartiya Engineering Corporation (P) Ltd (supra), to contend that department cannot retain the tax not due to it. Section 237 of the Act provides that if any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf, or treated as paid by him or on his behalf, exceeds the amount which he is properly chargeable under the Act, he would be entitled to refund of excess. This provision however, would not mean that at any point of time, the assessee can approach the Assessing Officer and claim to have paid excess tax. A return filed by the assessee goes through the process of assessment. Such assessment could be after scrutiny or the return can be accepted without any contest by a mere sending of intimation to the assessee. The assessee cannot simply ignore all other statutory provisions of rectification, revision and appeal, to contend that at any point of time, if he is able to demonstrate that there has been an excess payment of tax, the Assessing Officer is obliged to refund the same. Such an argument would ignore the provision Page 20 of 22 HC-NIC Page 20 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT under section 242 of the Act which provides that in a claim under Chapter XIX pertaining to refund in which section 237 is also included, it shall not be open for the assessee to question the correctness of any assessment or other matter decided which has become final and conclusive or ask for a review of the same and the assessee shall not be entitled to any relief on such claim, except refund of tax wrongly paid or paid in excess. Against the return filed by an assessee, before 1.6.1999, a revision petition was maintainable. If a claim which was not made, had to be raised, it was possible for the assessee to file a revised return. We are prepared to accept that even during the assessment, if the assessee points out that there is palpable error in the petitioner's own assessment of his tax liability, the Assessing Officer is duty bound to address to such an issue and cannot take a technical stand. However, once the return is filed, which is processed with or without scrutiny, any claim for refund can arise only if such order of assessment is revised or set aside. In terms of section 154 of the Act, it may have been possible for the assessee to seek rectification of intimation under section 143(1) of the Act but when the assessee rather belatedly sought revision which was not maintainable, it cannot maintain the claim for refund dehors such proceedings. There is an additional reason why we cannot accept the stand of the petitioner and it is this. In the return filed, the assessee offered to tax a sum of Rs.1.18 crores by putting a note that "The same has been disallowed and will be claimed when actual payment with necessary documents will be made as the company is still in the process of negotiating the same." The claim of expenditure putforth by the Page 21 of 22 HC-NIC Page 21 of 22 Created On Sat Sep 10 00:00:28 IST 2016 C/SCA/2514/2011 JUDGMENT Assessing Officer would be open to verification by Assessing Officer during the assessment before the same can be granted in terms of section 37 of the Act. If the assessee was following mercantile system of accounting, such claim could be processed on the basis of accrual. These aspects had to be examined before such claim could have been allowed. The assessee itself harbored an opinion that since the expenditure is still under the process of negotiation, the liability had not accrued during the previous year relevant to the assessment year 20032004. All these aspects had to be examined before it could be held that the claim of deduction of expenditure was required to be granted. This is therefore, not a case where an apparent clear cut error of airthematical, typographical or clerical nature has crept in which has robbed the assessee of a rightful claim. This is a case where the assessee wanted to shift its stand from the liability not having accrued to having crystalized. Not allowing refund under such circumstances would not shake the credibility of the department.
32. For such reasons, petition fails and is dismissed.
(AKIL KURESHI, J.) (A.J. SHASTRI, J.) raghu Page 22 of 22 HC-NIC Page 22 of 22 Created On Sat Sep 10 00:00:28 IST 2016