1986-VIL-388-BOM-DT

Equivalent Citation: [1987] 165 ITR 151, 56 CTR 47, 28 TAXMANN 321

BOMBAY HIGH COURT

Date: 07.03.1986

SURESH B. JAIN

Vs

AN SHAIKH, 16TH INCOME-TAX OFFICER AND OTHERS

BENCH

Judge(s)  : PENDSE 

JUDGMENT

PENDSE J.-The petitioner had filed his return for the assessment year 1982-83 and the Inspecting Assistant Commissioner passed an assessment order assessing the income at Rs. 60,60,234 and the petitioner paid an amount of Rs. 4,29,000 by way of tax. The petitioner then preferred an appeal against the assessment order before the Commissioner of Income-tax (Appeals) and the appeal was allowed. The Income-tax Officer gave effect to the appellate order and revised the total assessable income of the petitioner for the assessment year 1982-83 as per the directions given by the Commissioner of Income-tax (Appeals). The revised assessment order was passed and the total income of the assessee was computed at Rs. 21,948, on which the tax liability was only Rs. 2,294. Accordingly, the petitioner was entitled to the refund of the amount of Rs. 4,26,706.

While forwarding the revised assessment order for the assessment year 1982-83, the Income-tax Officer also simultaneously issued a notice for the finalisation of the proceedings of the assessment for the assessment year 1983-84. The petitioner thereupon addressed a letter dated May 31, 1985, to the Commissioner of Income-tax requesting that the refund should be granted forthwith and the pendency of the assessment for the assessment year 1983-84 should not delay handing over the refund certificate. The refund was not given to the petitioner and that gave rise to the filing of the present petition under article 226 of the Constitution of India in this court on July 8, 1985. The petition was duly admitted on July 15, 1985, and the hearing was expedited. The petition was admitted by me, as the respondents, in spite of adjournment, could not explain why the refund was not given.

The respondents have not filed any return in answer to the relief sought by the petitioner, but Shri Joshi, learned counsel for the petitioner, pointed out the reason why the respondents did not give the refund due for the assessment year 1982-83. Shri Joshi invited my attention to the order dated June 28, 1985, passed by the 16th Income-tax Officer, completing the assessment of the petitioner for the assessment year 1983-84. The order recites that the petitioner is liable to pay the tax amount of Rs. 7,47,732 and out of the above demand, Rs. 4,26,090 is adjusted against the refund for the assessment year 1982-83. Shri Joshi complains that though this order was passed on June 28, 1985, it was not disclosed to the court at the time of admission of the petition. Shri Joshi further submits that, in any event, it is not permissible for the Income-tax Officer to adjust the amount of refund due in respect of the earlier assessment order without giving prior notice and an opportunity of being heard to the petitioner. Shri Joshi relies upon the provisions of section 245 of the Income-tax Act, 1961, which reads as under:

" 245. Where under any of the provisions of this Act, a refund is found to be due to any person, the Income-tax Officer, Appellate Assistant Commissioner, Commissioner (Appeals) or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section."

A mere perusal of this section makes it clear that the Income-tax Officer may, in lieu of payment of refund, set off the amount to be refunded against the sum payable by the person, but only after giving intimation in writing to such person of the proposed action. Shri Devadhar, learned counsel appearing on behalf of the respondents, had to concede that the Income-tax Officer did not give any intimation to the petitioner before making adjustment while passing the assessment order for the assessment year 1983-84. In my judgment, the action of the Income-tax Officer is wholly illegal and the respondents were clearly in error in not refunding the amount of Rs. 4,26,090 to the petitioner forthwith.

Accordingly, the petition succeeds and the rule is made absolute and the respondents are directed to refund the amount of Rs. 4,26,090 to the petitioner within a period of two weeks from today. The respondents shall ensure that the refund order is actually handed over to the petitioner before the expiry of two weeks. The respondents shall pay the costs of the petition.

 

 

 

DISCLAIMER: Though all efforts have been made to reproduce the order accurately and correctly however the access, usage and circulation is subject to the condition that VATinfoline Multimedia is not responsible/liable for any loss or damage caused to anyone due to any mistake/error/omissions.