Mrs. Rama Devi Varma, Sec'bad, Secunderabad V. ITO W-10(3), Hyderabad

ITA 303/HYD/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 1315 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 11 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-02-2013
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 1998-1999
• Appeal Filed On: 28-02-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: AMISHA S GUPT
• Keywords: Retraction; Revised return
• Section: 133A; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B', HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. ASHA VIJAYARAGHAVAN, JUDICIAL MEMBER ITA NO. 303/HYD/2011 ASSESSMENT YEAR 1998-99 MRS. RAMA DEVI VARMA HYDERABAD PAN: ABIPV8513A VS. THE INCOME TAX OFFICER WARD-10(3) HYDERABAD APPELLANT RESPONDENT ASSESSEE BY: SRI K.C. DEVDAS REVENUE BY: SMT. AMISHA S. GUPT DATE OF HEARING: 17.01.2013 DATE OF PRONOUNCEMENT: 22.02.2013 O R D E R PER CHANDRA POOJARI, AM: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE CIT(A) DATED 30.11.2010. 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL: (I) THE ORDER OF THE CIT(A) IN HOLDING THAT THE SUM OF RS. 8,30,409 PAID BY THE APPELLANT ON THE BASIS OF AN INVALID REVISED RETURN WAS NOT REFUNDABLE IS WHOLLY UNSUSTAINABLE IN LAW. (II) THE LEARNED CIT(A) OUGHT TO HAVE CLEARLY HELD THAT THE PAYMENT OF RS. 8,30,409 WHICH WAS VOLUNTARILY PAID BY THE APPELLANT ON THE BASIS OF INVALID RETURN WAS REFUNDABLE WITH INTEREST. (III) THE LEARNED CIT(A) FAILED TO NOTE THAT THE INCOME TAX APPELLATE TRIBUNAL HAD ONLY QUASHED THE ORIGINAL ASSESSMENT AND THEREFORE, THE ENTIRE SUMS PAID OVER THE LEGITIMATE TAX DUE WAS REFUNDABLE AND THEREFORE OUGHT TO HAVE DIRECTED THE REFUND OF RS. 8,30,409 WITH INTEREST. IT A NO. 303/HYD/2011 MRS. RAMA DEVI VARMA ================= 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM CAPITAL GAINS AND O THER SOURCES. RETURN OF INCOME FOR ASSESSMENT YEAR 1998- 99 WAS FILED ON 30-03-99 DECLARING A TOTAL INCOME OF RS. 6 3,440. ACTION UNDER SECTION 133A WAS CARRIED OUT IN THIS C ASE ON 23.08.1999 AFTER FILING OF THE REGULAR RETURN. BAS ING ON THE MATERIAL FOUND IN COURSE OF SURVEY AND SUBSEQUENT E NQUIRIES, THE ASSESSEE CAME FORWARD WITH A SECOND RETURN ON 30.09.1999, REVISING THE INCOME TO RS. 33,05,874. T HE ASSESSEE OFFERED THE ADDITIONAL INCOME IN THE REVIS ED RETURN AS UNDER: (A) CAPITAL GAIN ON SALE OF DIAMOND INVESTED IN HOUSE CONSTRUCTION IN THE ABSENCE OF PROOF. RS. 12,42,432 (B) ADDITIONAL INCOME OF RS. 20,00,000 INVESTED IN HOUSE CONSTRUCTION RS. 20,00,000 TOTAL RS. 32,42,432 4. FROM THE ASSESSMENT ORDER, IT APPEARS THAT THE ASSESSEE AT THE TIME OF FILING THE SECOND RETURN AN D IN COURSE OF ASSESSMENT PROCEEDING, CONFIRMED THE DECLARATION OF ADDITIONAL INCOME WITHOUT RETRACTION. THE ASSESSMEN T WAS COMPLETED ON 30-03-2001 ACCEPTING THE REVISED INCOM E OF RS. 33,05,870 WHICH INCLUDED THE ADDITIONAL INCOME DECL ARED. THERE WAS NO ADDITION TO THE RETURNED INCOME FILED CONSEQUENT TO SURVEY. 5. THIS ORDER WAS APPEALED AGAINST UP TO THE TRIBUNAL. IN COURSE OF HEARING OF THE APPEAL BEFORE THE TRIBUNAL , THE ASSESSEE TOOK THE PLEA THAT THE ASSESSING OFFICER L ACKED JURISDICTIONAL FOUNDATION IN AS MUCH AS THE ORIGINA L RETURN HAVING BEEN FILED UNDER SECTION 139(4), THERE IS NO QUESTION OF REVISING THE SAME AND, THEREFORE, THE RETURN MAY BE IT A NO. 303/HYD/2011 MRS. RAMA DEVI VARMA ================= 3 TREATED AS NON-EST. IT WAS FURTHER CONTENDED THAT T HE NOTICE UNDER SECTION 143(2) WAS ISSUED TO THE ASSESSEE ON 05-07- 2000 WAS BEYOND TIME AS DUE DATE FOR ISSUANCE OF NO TICE EXPIRED ON 31-03-2000 WITH REFERENCE TO THE ORIGINA L RETURN. THE TRIBUNAL IN ITA NO. 1042/HYD/2002 DATED 22-02-2 008 ACCEPTED THE CONTENTION OF THE ASSESSEE WITH THE OB SERVATION THAT NO ASSESSMENT CAN BE MADE IF NOTICE UNDER SECT ION 143(2) IS NOT SERVED WITHIN THE PRESCRIBED PERIOD A S CONTEMPLATED IN THE PROVISO TO SECTION 143(2). WITH THIS OBSERVATION, THE TRIBUNAL SET ASIDE THE ORDER OF TH E COMMISSIONER (APPEALS) AS ALSO THE ORDER OF THE ASS ESSING OFFICER BEING LEGALLY INFIRM AND OBSERVED THAT ADDI TIONS MADE IN THE ASSESSMENT ORDER WOULD NO LONGER SURVIVE. T HERE IS NO OTHER OBSERVATION OF THE TRIBUNAL. THE MATTER WAS N OT AGITATED BEFORE ANY HIGHER JUDICIAL FORUM BY THE AS SESSEE. 6. IN PURSUANCE TO THE ORDER OF THE TRIBUNAL, THE ASSE SSING OFFICER PASSED CONSEQUENTIAL ORDER ON 1-5-2008. SI NCE THE INCOME SHOWN IN THE RETURNS STOOD DELETED, THE ONLY ISSUE BEFORE THE ASSESSING OFFICER WAS RELATING TO THE RE FUND OF AMOUNT OF TAX OF RS. 8,40,409 PAID BY WAY OF ADVANC E TAX AND SELF ASSESSMENT TAX OUT OF THE TOTAL LIABILITY OF R S. 13,60,972 ON THE RETURNED INCOME FILED CONSEQUENT TO SURVEY. IN THE CONSEQUENTIAL ORDER, THE ASSESSING OFFICER FOLLOWIN G THE DECISION OF THE APEX COURT IN THE CASE OF CIT V. SH ELLY PRODUCTS (2003) (261 ITR 367) (SC), OPINED THAT THE ASSESSEE IS NOT ENTITLED TO REFUND OF ADVANCE TAX AND SELF A SSESSMENT TAX AS THE SAME REPRESENTED ADMITTED LIABILITY OF T HE TAX PAYER. THE ASSESSING OFFICER WAS FAIR ENOUGH TO REF UND THE POST ASSESSMENT COLLECTION OF RS. 2,00,000 WITH INT EREST AS THE ASSESSMENT STOOD ANNULLED. AGAINST THE REFUSAL OF THE ASSESSING OFFICER TO ISSUE REFUND OF SELF ASSESSMEN T TAX AND IT A NO. 303/HYD/2011 MRS. RAMA DEVI VARMA ================= 4 ADVANCE TAX, THE ASSESSEE IS IN APPEAL BEFORE US. T HE ASSESSEE HAS ALSO PLACED RELIANCE ON THE DECISION O F SHELLY PRODUCTS (SUPRA) TO PRESS HER CLAIM. 7. THE CONTENTION OF THE ASSESSEES COUNSEL IS THAT TH E RETURN FILED BY THE ASSESSEE WAS INVALID RETURN. B EING SO, TAX PAID BY THE ASSESSEE IN TERMS OF THAT RETUR N IS TO BE REFUNDED. FOR THAT PURPOSE HE RELIED ON THE JUDGEMENT OF KARNATAKA HIGH COURT IN THE CASE OF CI T V. MICRO LABS LTD. (348 ITR 75) WHEREIN HELD THAT: '(II) THAT THE ASSESSEE HAD NOT PAID THE TAX ALONG WITH THE INCOME DECLARED IN THE BLOCK RETURN. IT WAS ONLY BY WAY OF ADJUSTMENT OF TAX PAID UNDER THE VOLUNTARY DISCLOSURE OF INCOME SCHEME AND THE REFUND DUE TO THE ASSESSEE FOR THE OTHER ASSESSMENT YEARS THAT THE DEMAND FOR TAXES HAD BEEN SATISFIED. PAYMENT OF TAXES VOLUNTARILY IS DIFFERENT FROM ADJUSTING THE REFUND WITHOUT REFERENCE TO THE ASSESSEE. IT COULD NOT BE HELD THAT THE ASSESSEE HAD PAID TAXES AND, ACCORDINGLY, THE REFUND DENIED IN TERMS OF THE PROVISO TO SECTION. THE COMMISSIONER (APPEALS) EXCEEDED HIS JURISDICTION TO DENY THE REFUND. THE ASSESSEE WAS ENTITLED TO THE REFUND.' 8. THE LEARNED DR SUBMITTED THAT THE ORIGINAL RETURN WAS FILED UNDER SECTION 139(4) ON 30.3.1999 SHOWING A TOTAL INCOME OF RS. 63,440 FROM CAPITAL GAIN AND OT HER SOURCES. CONSEQUENT TO SURVEY, THE ASSESSEE CAME FORWARD WITH A SECOND RETURN ON 30.9.1999 SHOWING A TOTAL INCOME OF RS. 32,42,432. 9. THE DR SUBMITTED THAT WHAT THE ASSESSEE HAS PAID IS ON THE TRUE INCOME WORKED OUT BY HER AFTER SURVE Y AS PER THE PROVISIONS OF THE ACT. THERE WAS NEVER ANY RETRACTION TO THE DECLARATION OF INCOME AND LIABILI TY THEREON. EVEN THE ASSESSEE PAID TAX AFTER THE IT A NO. 303/HYD/2011 MRS. RAMA DEVI VARMA ================= 5 COMPLETION OF ASSESSMENT. THIS WOULD INDICATE THAT SHE WAS ALWAYS AWARE OF HER TRUE INCOME AND TAX LIABILI TY OF TAX. AS OBSERVED BY THE APEX COURT, THE TAX IS PAI D AS PER THE PROVISIONS OF THE ACT AND FINANCE ACT AND T HE SAME IS NOT DEPENDENT UPON THE ASSESSMENT MADE OR ASSESSMENT BEING ANNULLED. THE ONLY EXCEPTION IS T HAT WHERE ANY ADDITIONAL DEMAND IS RAISED IN AN ASSESSM ENT THE SAME IS LIABLE TO BE REFUNDED WHEN THE ASSESSME NT IS ANNULLED. THIS HAS BEEN DONE BY THE ASSESSING O FFICER AS POST ASSESSMENT COLLECTION TO THE TUNE OF RS. 2,00,000 HAS BEEN REFUNDED. 10. WE HAVE HEARD BOTH THE PARTIES AND ALSO GONE THROUGH THE ABOVE FINDINGS OF THE JUDGEMENT OF HIGH COURT CITED SUPRA. IT IS DELIVERED ON ENTIRELY DIF FERENT SET OF FACTS. IN THAT CASE ASSESSEE NOT PAID TAX AL ONG WITH THE INCOME DECLARED IN THE BLOCK RETURN. IT I S ONLY BY WAY OF ADJUSTMENT OF TAX UNDER THE VDIS AND THE REFUND DUE TO THE ASSESSEE FOR THE OTHER ASSESSMENT YEARS THAT ARE ADJUSTED AGAINST THE SO CALLED DEMAN D. IN THE PRESENT CASE, THE ASSESSEE PAID THE TAX IN T ERMS OF THE RETURN VOLUNTARILY FILED BY HIM THOUGH IT WA S INVALID RETURN. BEING SO, THE CIT(A) IS JUSTIFIED IN DISMISSING THE CLAIM OF THE ASSESSEE BY OBSERVING T HAT THE ASSESSEE IS NOT ENTITLED FOR REFUND OF SELF- ASSESSMENT TAX PAID. WE TAKE SUPPORT FROM THE JUDGEMENT OF ALLAHABAD HIGH COURT IN THE CASE OF SA RAYA SUGAR MILLS LTD. VS. ITO & ORS (226 ITR 475) (ALL). IN THAT CASE THE ASSESSEE FILED A RETURN OF INCOME FOR THE ASSESSMENT YEAR 1977-78 DECLARING AN INCOME OF RS. 21,17,906. IN RESPECT OF THIS INCOME, THE TAX DEDUC TED AT SOURCE WAS RS. 2,513, ADVANCE TAX PAID WAS RS. 11,4 5,000 IT A NO. 303/HYD/2011 MRS. RAMA DEVI VARMA ================= 6 AND SELF-ASSESSMENT TAX DEPOSITED UNDER SECTION 140 A WAS RS. 96,267. THUS A TOTAL OF RS. 12,43,780 HAD BEEN PAID AS TAX IN RESPECT OF THE RETURNED INCOME. AN ASSESSMEN T ORDER WAS MADE DETERMINING ITS INCOME AT RS. 38,58,904. T HE TRIBUNAL HELD THAT THE ASSESSMENT WAS BARRED BY TIM E AND THE ASSESSMENT WAS ACCORDINGLY ANNULLED. AFTER THE ANNU LMENT OF THE ASSESSMENT, THE ASSESSEE ASKED THE ASSESSING OF FICER TO REFUND THE WHOLE AMOUNT OF RS. 12,43,780 PAID BY IT BUT THE ASSESSING OFFICER DID NOT DO SO. INSTEAD, HE INITI ATED PROCEEDINGS UNDER SECTION 147 READ WITH SECTION 148 FOR MAKING A REASSESSMENT. THE PETITIONER FILED A WRIT PETITION OBJECTING TO THE INITIATION OF PROCEEDINGS UNDER SE CTION 147/148. HOWEVER, THE ASSESSMENT WAS COMPLETED OVER RULING THE PETITIONER'S OBJECTION. THE PETITIONER PREFERR ED APPEALS AND ULTIMATELY THE TRIBUNAL QUASHED THE REASSESSMEN T HOLDING THAT THE ASSESSEE HAVING FILED A RETURN OF INCOME, PROCEEDINGS UNDER SECTION 147(A) COULD NOT BE TAKEN AGAINST THE ASSESSEE. THE ASSESSEE CLAIMED THAT THE ASSESSMENT HAVING BEEN QUASHED, THERE REMAINED NO LIABILITY TO INCOME -TAX ON THE ASSESSEE AND, THEREFORE, IT WAS ENTITLED TO THE REFUND OF THE PREPAID TAX. 'HELD, (I) THAT IT WAS NOT THE ASSESSEE'S CASE THAT ACCORDING TO THE PROVISIONS OF THE INCOME-TAX ACT AND THE FINANCE AC T, 1977, THE SUM OF RS. 12,43,780 WAS NOT THE AMOUNT PROPERLY CHARGE ABLE FROM IT UNDER THE PROVISIONS OF THE ACT FOR THE RELEVANT YE AR AND THAT THERE WAS ANY EXCESS. THE CONTENTION OF THE ASSESSEE THAT THE WHOLE AMOUNT OF PRE-PAID TAXES WAS REFUNDABLE TO IT WAS NOT TENA BLE. (II) THAT AS REGARDS THE AMOUNTS, IF ANY, PAID BY T HE ASSESSEE IN PURSUANCE OF THE TWO ASSESSMENT ORDERS THE LIABILIT Y TO REFUND THE SAME WAS NOT DENIED BY THE REVENUE AND IT HAD CLAIM ED THAT THE REFUNDS DUE TO THE ASSESSEE HAD BEEN ADJUSTED IN AC CORDANCE WITH THE PROVISIONS OF SECTION 241 OF THE ACT. IF THERE IS A NY CONTROVERSY WITH REGARD TO THE ADJUSTING OF THE REFUND OR THE EXTENT THEREOF, IT WAS PERMISSIBLE TO THE ASSESSEE TO LAY ITS CLAIM BEFORE THE ASSESSING OFFICER WHO SHALL DECIDE THE SAME BY A SPEAKING ORD ER IN ACCORDANCE WITH LAW PREFERABLY WITHIN TWO MONTHS OF THE MAKING THEREOF.' IT A NO. 303/HYD/2011 MRS. RAMA DEVI VARMA ================= 7 11. WE ALSO PLACE RELIANCE ON THE FULL BENCH JUDGEMENT OF GUJARAT HIGH COURT IN THE CASE OF SAURASHTRA CEM ENT AND CHEMICAL INDUSTRIES LTD. V. ITO (194 ITR 659) (GUJ). FURTHER, THE FINDING OF THE CIT(A) IS IN CO NFORMITY WITH THE JUDGEMENT OF SUPREME COURT IN THE CASE OF SHELLY PRODUCTS CITED SUPRA. 12. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(A) AND GROUND RAISED BY THE ASSESSEE IS DISMISSED. 13. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN OPEN COURT ON 22 ND FEBRUARY, 2013. SD/- (ASHA VIJAYARAGHAVAN) JUDICIAL MEMBER SD/- (CHANDRA POOJARI) ACCOUNTANT MEMBER HYDERABAD, DATED 22 ND FEBRUARY, 2013 TPRAO COPY FORWARDED TO: 1. MRS. RAMA DEVI VARMA, C/O. M/S. SEKHAR & CO., CHARTERED ACCOUNTANTS, 133/4, R.P. ROAD, SECUNDERABAD. 2. THE INCOME TAX OFFICER, WARD-10(3), HYDERABAD. 3. THE CIT(A)-VI, HYDERABAD. 4. THE CIT-V, HYDERABAD. 5. THE DR B BENCH, ITAT, HYDERABAD.