Mr. Dushyant Naagar and Mrs. Priya Shankar V. The Commissioner of Income Tax(TDS) and Director General, Central Board of Direct Taxes and State Bank of India and Inorbit Malls (India) Private Limited

WP/11288/2014

AI Insights

The case involves Mr. Dushyant Naagar and Mrs. Priya Shankar, who filed a writ petition against the Commissioner of Income Tax (TDS), the Director General of the Central Board of Direct Taxes, the State Bank of India, and Inorbit Malls (India) Private Limited. The petitioners sought a refund for an excess payment of Rs.5,59,800 made due to a technical error during an online tax payment. The payment was intended as an advance tax on behalf of the vendor for a property purchase, as required under Section 194-IA of the Income Tax Act, 1961. The court found that the excess payment was credited to the account of the Income-tax Department and directed the department to refund the amount to the petitioners.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 794186 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 06-06-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND; M NAGAPRASANNA; SATISH; B KRISHNA
• Assessee Lawyers: ARUN
• Keywords: Advance tax; Excess payment; Refund; Immoveable properties
• Section: 194-IA

Judgement Text

" -: 1 :- IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 06TH DAY OF JUNE, 2014 BEFORE THE HON'BLE MRS.JUSTICE B.V.NAGARATHNA WRIT PETITION NOs.11288-89/2014 (T-IT) BETWEEN: 1.MR. DUSHYANT NAAGAR, SON OF MR.DEVENDRAKANT NAGAR, AGED ABOUT 42 YEARS, RESIDING AT NO.7/8, 1ST MAIN, SHUB ENCLAVE, HARLUR ROAD, OFF.SARJAPUR, BANGALORE-560 102. 2.MRS. PRIYA SHANKAR, WIFE OF MR. DUSHYANT NAAGAR, AGED ABOUT 47 YEARS, RESIDING AT NO.7/8, 1ST MAIN, SHUB ENCLAVE, HARLUR ROAD, OFF.SARJAPUR, BANGALORE-560 102. ... PETITIONERS (BY SRI: ARUN KUMAR.K, ADV.) AND: 1.THE COMMISSIONER OF INCOME TAX(TDS), ROOM NO.59, H.M.T.BHAVAN, 4TH FLOOR, BELLARY ROAD, GANGANAGAR, BANGALORE-560 032. 2.DIRECTOR GENERAL, CENTRAL BOARD OF DIRECT TAXES, NORTH BLOCK, DELHI-110 001. 3.STATE BANK OF INDIA, REP. BY ITS GENERAL MANAGER, HAVING ITS HEAD OFFICE AT ST.MARKS ROAD, BANGALORE-560 001. -: 2 :- 4.INORBIT MALLS (INDIA) PRIVATE LIMITED, REP. BY ITS MANAGING DIRECTOR, A COMPANY REGD. UNDER THE PROVISIONS OF THE INDIAN COMPANIES ACT, 1956, AND HAVING ITS REGD. OFFICE AT PLOT NO. C-30, BLOCK-G, OPPOSITE TO SIDBI, MUMBAI-400 051. ... RESPONDENTS (BY SRI: K.V.ARAVIND FOR R1 & R2, SRI.M.NAGAPRASANNA, ADV. FOR R3, SRI.SATISH.N. AND SRI.B.KRISHNA, ADVs. FOR R4) ***** THESE W.Ps ARE FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE R1 TO REFUND EXCESS PAYMENT OF RS.5,59,800/- [RUPEES FIVE LAKHS FIFTY NINE THOUSAND EIGHT HUNDRED ONLY] TOGETHER WITH INTEREST THEREON FROM 7.10.13 TILL DATE OF REALIZATION AS REQUESTED FOR VIDE ANN-H. THESE PETITIONS COMING ON FOR PRELIMINARY HEARING IN ‘B’ GROUP THIS DAY, COURT MADE THE FOLLOWING:- O R D E R The petitioners have sought a direction to the first respondent to refund a sum of Rs.5,59,800/- together with interest thereon from 07/10/2013, as requested in their representation, which is at Annexure “H” dated 15/10/2013. 2. Briefly stated facts are that the petitioners had purchased an apartment bearing No.6 in building No.2B, -: 3 :- “VIVA”, Thiswadi, Goa, constructed by the fourth respondent, for a valuable consideration of Rs.62,20,000/-, a copy of the sale deed is produced as Annexure “A” in support of his averment. Under Section 194-IA of the Income Tax Act, 1961 (hereinafter, referred to as the “Act”, for the sake of brevity), where a sale consideration exceeds Rs.50,00,000/- (Rupees fifty lakhs), in respect of immoveable properties, the intending purchasers have to deposit a sum equivalent 1% to the sale consideration as an advance tax on behalf of the vendor. In the instant case, accordingly, a sum of Rs.62,200/- was to be deducted and paid to the vendor of the petitioners within the prescribed time. The petitioners in fact, deposited that amount by uploading Form No.26-AS. The said deposit was made on 17/09/2013 on the web portal of the third respondent – Bank and through the bank account of the petitioner bearing No.10209764954. While effecting the said payment of account of certain technical glitches, the payment was made ten times of Rs.62,200/-, which according to the petitioners was an excess payment. The petitioners immediately intimated the third respondent – Bank and also informed the Income-tax Department about -: 4 :- it. Thereafter, they made several requests both oral and in writing, seeking refund of the excess payment of Rs.5,59,800/-, as there were debit entries in the bank account of the petitioners and hence, according to the petitioners, the amount was credited in the account of the Income-tax Department. There being no response from the Department to the request made by the petitioners, the petitioners have filed this writ petition seeking a direction for refund to the excess payment made by them. 3. I have heard the learned counsel for the petitioners and the learned standing counsel for respondent Nos.1 and 2 and learned counsel for the Bank and perused the material on record. The counsel for the Bank has supported the case of the petitioners. 4. The difficulty expressed by the learned counsel for the respondent-Department was that the excess payment effected by the petitioners would have been reflected in the accounts of the fourth respondent and therefore, it would be difficult to reverse those entries at this stage and further, the petitioners would have to seek their remedy vis-à-vis the fourth respondent. It was -: 5 :- stated that these transactions having been made electronically, the Department would have no control over the same and it is only at the stage when the returns of the fourth respondent are submitted and assessed, there could be reversal of the entries. However, the fact remains that the actual credit of these amounts have been made in the name of the Income-tax Department. There would be no credit entry in respect of the fourth respondent. Fourth respondent if at all could have taken advantage of these entries shown in Annexure “B”, which is Form No.26-AS, but that would not in any way result in excess payment being made by the petitioners if credited to the account of the fourth respondent. The excess sums are in fact, with the Department. All that the petitioners are seeking is refund of the excess payments. In this regard, the difficulty expressed by the learned standing counsel for the Department is also taken note of. Therefore, while directing the Income-tax Department, to refund the excess amount paid by the petitioners as per Annexure “B” – Form No.26-AS, the Department is also directed to note and to make necessary changes vis-à-vis the excess payments made in the account of the fourth -: 6 :- respondent. Further, fourth respondent is also directed not to reflect the payment at Sl.Nos.2 to 10 of Annexure “B” in its returns to be filed insofar as the transaction at Annexure “A” is concerned. The excess payment lying in the credit of first respondent is directed to be refunded to the petitioners within a period of four weeks from the date of receipt of the certified copy of this order. 5. It is needless to observe that in view of this direction, both the first respondent and fourth respondent would not reflect the credit made at Sl.Nos.2 to 10 in Annexure “B” in the returns of the fourth respondent as well as in the records of the first respondent. 6. With the aforesaid observations and directions, the writ petitions stand disposed of. Sd/- JUDGE. *mvs "