PURUSOTTAM SUBUDHI V. INCOME TAX OFFICER

WP(C)/18251/2016

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The petitioner, suffering from serious health issues including tuberculosis and the loss of a kidney, was unable to meet the deadline for claiming a tax refund on an ex-gratia amount due to his illness. The petition sought to direct the Principal Commissioner of Income Tax-2 to accept a revised return filed on 20.06.2016 and to refund the tax deducted along with interest. The case referenced a decision by the Bombay High Court, which had allowed a similar refund on the grounds that the petitioner was entitled to it on merits, despite the delay in filing for it. The court in this instance followed the precedent set by the Bombay High Court, noting that the decision had not been challenged by the Income Tax Department.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 676730 (HC-ODISHA)
• Appeal Type: Others
• Pronouncement Date: 13-03-2019
• Assessment Year: misc
• Other Referred Cases: Devdas Rama vs. Commissioner of Income Tax & others
• Laws Referred To: Income Tax Act
• Result in Favour of: Applicant
• Court: HIGH COURT
• Keywords: Condonation of delay; Ex-gratia; Health issues; Income Tax; Refund; Revised return
• Section: 119(2)(b); 10(10C)

Judgement Text

" 4. 13.03.2019 Heard. Admit. On consent of the parties, the matter is taken up today for final disposal. By way of this writ petition, petitioner has prayed for issuance of direction to the Principal Commissioner of Income Tax-2, the Opposite party No.4 to entertain the revised return filed on 20.06.2016, and to recall the order passed to allow the deduction on the ex-gratia of Rs.3,96,777/- and to refund the tax of Rs.1,22,627/- deducted and kept deposited along with interest payable to the petitioner from the date of deposit of the tax. Case of the petitioner is that due to serious illness he could approach the competent authority within the stipulated time for which refund amount could not be claimed in time. Learned counsel for the petitioner relied on averments made at paragraph-9 of the writ petition, which is reproduced as under: “9. That in the process, the petitioner due to his serious illness i.e., due to T.B. and lost his one kidney because of acute health hazards had remained in panic also got disturbed due to various reasons which aggravated terrible mental tension promoted to forget the affairs. The Petitioner got treatment in Apollo Hospital, some of the recent prescriptions enclosed herewith may have the appreciation to consider the health hazards coupled with acute illness. Therefore caused delay to proceed in the matter, but the petitioner had prayed for condonation of delay vide petition dt. 12.08.2016 in compliance to letter of the Income Tax Officer, the Opposite party No.1 dt. 08.08.2016 directed to comply the details made fixing to 12.08.2016. But the Hon’ble Apex Court having excluded the ex-gratia amount beyond the scope of levy tax under the W.P.(C) No. 18251 of 2016 -2- said Exit Option Scheme should have been modified suo moto to grant relief to the petitioner. The copies of the prescriptions and correspondences made for condonation of delay caused the suffering more than six years in the process.” Because of sufferings of the petitioner from Tuberculosis, he lost one of his kidneys and because of acute health hazards he had remained in panic and also got disturbed due to various reasons, which aggravated terrible mental tension prompted to forget the affairs. However, ultimately he could only make an application after coming out of such prolonged illness. In such regard learned counsel for the petitioner has placed reliance on the decision of Bombay High Court in the case of Devdas Rama vs. Commissioner of Income Tax & others (Writ Petition No. 2422 of 2014 disposed of on 15.01.2014), wherein the Bombay High Court in paragraphs- 3 to 7 observed as under: “3 The RBI while making the payment to the petitioner under the Scheme had deducted as tax at source an amount of Rs.1.64,117. However, in his return of income for asst. yr. 2004-05 filed on 15th Oct., 2004 the petitioner did not claim any refund of tax as TDS paid by RBI on his behalf nor was the credit on tax utilized to discharge tax payable on any other income. 4. It was only on 8th May, 2009 that the CBDT issued a circular clarifying that the employees of RBI who had opted for early retirement scheme during the year 2004-05 would be entitled for benefit of exemption under s. 10(10C) of the Act. The Supreme Court also in Chandra Ranganathan & Ors. Vs. CIT (2010) 235 CTR (SC) 365 : (2010) 46 DTR (SC) 95 : (2010) 326 ITR 49 (SC) held that the amounts received by retiring employees of RBI opting for the scheme are eligible for exemption under s. 10(10C) of the Act. In view of the above the petitioner filed a revised return of income on 8th -3- Sept., 2011 claiming benefit of exemption available to the Scheme under s. 10(10C) of the Act which consequently would result in refund of Rs.1.64 lacs paid by RBI as TDS. However, there was no response to the above revised return of income from the respondent-Revenue. 5. The petitioner in the mean time also filed an application with the CIT under s. 119(2)(b) of the Act seeking condonation of delay in filing his application for refund in the form of revised return of income for asst. yr. 2004-05. The respondent Revenue by the impugned order dismissed the application under s. 119(2)(b) of the Act on the ground that in view of Instruction No. 13 of 2006, dt. 22nd Dec., 2006[(2007) 207 CTR (St) 3] by the CBDT an application claiming refund cannot be entertained if the same is filed beyond the period of 6 years from the end of the assessment year from which the application is made. In the affidavit in reply dt. 19th Nov., 2013 the CIT states that he is bound by the above instructions issued by the CBDT and consequently the claim for refund cannot be considered. 6. It is not disputed by the respondent Revenue that on merits the petitioner is entitled to the benefit of refund of TDS as the payment received under the scheme is exempted under s. 10(10C) of the Act. The decision of the apex Court in the matter of Chandra Ranganathan & Ors. (supra) concludes the issue. This is also the view of the revenue as clarified in CBDT Circular dt. 8th May, 2003 [(2009) 23 DTR (St) I : (2009) 223 CTR (St) 317]. The application under s. 119(2) (b) of the Act is being denied by adopting a very hyper technical view that the application for condonation of delay was made beyond 6 years from the date of the end of the asst. yr. 2004-05. In this case the revised return of income filed on 8th Sept., 2011 should itself be considered as application for condonation of delay under s. 119(2)(b) of the Act refund granted. 7. It is to be noted that the respondent- Revenue does not dispute the claim of the petitioner for refund on merits but the same is being denied only on hyper technical view of limitation. It will be noted that on 8the May, 2009 the CBDT issued a circular clarifying and -4- reviewing its earlier decision to declare that the employees of RBI who opted for early retirement scheme under the Scheme will be entitled to the benefit of s. 10(10C) of the Act. Soon after the issue of circular dt 8th May, 2009 by the CBDT and the decision of the apex Court in Chandra Ranganathan (supra) the petitioner filed a revised return of income on 8th Sept.2011 seeking refund of TDS paid on his behalf by RBI.” Last occasion, i.e., on 07.03.2019, we had called upon the learned Counsel for the Income Tax Department to examine as to whether the Bombay High Court judgment is challenged or not and it is stated at the Bar that the same is not challenged. In that view of the matter, following the decision of Bombay High Court in the case of Devdas Rama (supra), we allow the writ petition. Accordingly, we direct the competent authority to consider the case of the petitioner for the refund without entering into technicalities of delay. We make it clear that the aforesaid exercise shall be completed within a period of four weeks from the date of production of a copy of this order. The writ petition is allowed to the aforesaid extent. Issue urgent certified copy of the order on proper application. bct .……..........………… (K.S. Jhaveri) Chief Justice ……………….…….. (K.R.Mohapatra) Judge "