M/S TAPI PRESTRESSED PRO LTD V. COMMI OF INCOME TAX andORS

CW/11803/2016

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The case revolves around a dispute concerning the refund of a security deposit amounting to Rs. 24,01,949/- which was erroneously deposited by the Executive Engineer, RUSDIP, with the Income Tax Department under the head of Income Tax (TDS) instead of refunding it to the petitioner, M/s. Tapi Prestressed Products Ltd., after the completion of a contract. The petitioner completed the contracted work and was entitled to the refund of the security deposit. Despite multiple communications and a legal notice, the refund was not processed, leading to the filing of this writ petition. The court found that the petitioner should not bear the consequences of the erroneous deposit and directed the refund along with interest, while allowing Respondent No. 3 to seek a refund from the Income Tax Department.

• Counselvise Citation: [2017] 140 COUNSELVISE.COM (IT) 750971 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 08-02-2017
• Assessment Year: misc
• Laws Referred To: Companies Act, Income Tax Rules, 1962
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: NIKHIL SIMLOTE
• Assessee Lawyers: NAMITA PARIHAR
• Keywords: Income Tax; Refund; Security Deposit; TDS; Erroneous deposit
• Section: 31A(3A)

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR S. B. Civil Writ Petition No. 11803 / 2016 M/s. Tapi Prestressed Products Ltd. Through authorised representative G.P. Sharma son of Shri Chhote Lal Sharma, Aged 55 years, Technical Project Manager, 45, Mission Compound, Ajmer Road, Jaipur Petitioner Versus 1. Commissioner of Income Tax(T.D.S.), Room No. 312, New Central Revenue Building, Statue Circle, Jaipur, Rajasthan. 2. The State of Rajasthan through Finance Secretary, Government of Rajasthan, Secretariat, Bhagwant Das Road, Jaipur. 3. The Executive Engineer, RUSDIP, 859, Jawahar Nagar, Ghana Road, Bharatpur. Respondents. _____________________________________________________ For Petitioner(s) : Ms. Namita Parihar. For Respondent No. 1 : Mr. Nikhil Simlote on behalf of Mr. R.B. Mathur. _____________________________________________________ HON'BLE MR. JUSTICE MOHAMMAD RAFIQ Order 08/02/2017 This writ petition has been filed by the petitioner M/s. Tapi Prestressed Products Ltd. inter alia with the prayer that the respondents be directed to refund amount of Rs. 24,01,949/- to the petitioner-company within interest @ 12% p.a. Learned counsel for the petitioner submitted that the petitioner is a company incorporated under the provisions of Companies Act. Petitioner-company was granted a contract by Respondent No. 3, Executive Engineer, RUSDIP, for commissioning of the pipes as per tender document. According to the petitioner, (2 of 4) [CW-11803/2016] it has completed the entire work and a certificate of completion of work was also issued to it on 02.09.2014. Thereafter, when the petitioner approached the respondents-authorities for refund of the security deposit, it was informed that security amount of Rs. 24,01,949/- was wrongly deposited by Treasury Officer in the Income Tax Department in the head of Income Tax(TDS). This was the amount of security deposited by the petitioner and was to be refunded to the petitioner-company after completion of the work. When the petitioner demanded refund of aforesaid amount, Respondent No. 3 wrote a letter on 23.12.2013 to the Treasury Officer, Bharatpur that the aforesaid amount was inadvertently deposited with the Income Tax Department towards TDS and steps be taken to secure refund of the amount through Accountant General(Accounts), Jaipur, but nothing happened. Thereafter, the petitioner served a legal notice through its advocate on Respondent No.3 on 04.12.2015. The petitioner has also placed on record copy of letter dated 22.03.2016 issued by the Office of the Principal Chief Controller of Accounts, Central Board of Direct Taxes, New Delhi to the Commissioner of Income Tax(T.D.S.), Jaipur directing to refund the amount to the petitioner-company. In response thereto, a letter was sent by Income Tax Officer(T.D.S.) to Respondent No. 3 on 29.03.2016 advising that they should submit a claim for refund in prescribed format through T.D.S. Traces. But so far no claim of refund has been submitted by Respondent No. 3. Learned counsel for Respondent No.1 opposed the writ petition and submitted that the respondent-Income Tax (3 of 4) [CW-11803/2016] Department has rightly advised Respondent No. 3 because as per Rule 31A(3A) of the Income Tax Rules, 1962, a claim for refund, for sum paid to the credit of the Central Government under Chapter SVII-B, shall be furnished by the deductor in Form 26B electronically under digital signature in accordance with the procedures, formats and standards specified under sub-rule (5). Till date, Respondent No. 3 has not submitted refund claim. Even though, the petitioner cannot be blamed for the aforesaid erroneous deposit, but the deposit was inadvertently made by Respondent No. 3 and refund of the same can only be claimed by Respondent No. 3 and not by the petitioner. Despite service of Respondent No. 3 and showing name of their counsel in the Cause List, no one has appeared on behalf of Respondent No. 3, but reply to writ petition has been filed by Respondent No. 3 and a copy thereof has been furnished to learned counsel for the petitioner. It has been contended therein that Respondent No. 3 has made all the efforts to get refund of security amount deposited by the petitioner with it, however, due to unclear directions of Respondents No.1 and 2, Respondent No. 3 has not been able to get the aforesaid amount refunded. It is further contended that Respondent No. 3 issued Security Deposit Refund Order No. RUSDIP/IPIU/BPR/2013-14/2012-14 dated 05.06.2013 wherein an amount of Rs. 61,11,231/-(including the security deposit amount of Rs. 24,01,494/-) was directed to be refunded to the petitioner. Respondent No. 3 came to know about the aforementioned error only on 12.06.2013, when the Refund Bill was submitted with the Treasury, Bharatpur. It is contended (4 of 4) [CW-11803/2016] that vide Office Order No. RUSDIP/IPIU/BPR/2013-14/2044 dated 12.06.2013, Respondent No. 3 refunded remaining amount of the petitioner amounting to Rs. 37,09,282/-. Be that as it may, deposit of the security amount towards T.D.S with the Income Tax Department was erroneously made by Respondent No. 3 and the petitioner cannot be made to suffer for the same. Writ petition is, therefore, liable to be allowed and is according allowed. Respondent No. 3 is directed to pay to the petitioner aforesaid amount of Rs. 24,01,949/- along with interest @ 6% per annum within a period of three months. However, it would be open to Respondent No. 3 to claim refund of the same as per prescribed procedure from the Income Tax Department. Stay application stands disposed off. (MOHAMMAD RAFIQ)J. Manoj "