Torrent Private Limited V. Commissioner of Income Tax

SCA/5857/2004

AI Insights

The case revolves around the challenge by Torrent Private Limited against the order of the Commissioner of Income Tax, which upheld the Assessing Officer's decision denying a refund of dividend distribution tax. The tax was initially paid following the declaration of an interim dividend by Torrent Power Ltd. However, subsequent to the declaration but before the actual payment, an amalgamation scheme was sanctioned by the Gujarat High Court, which retroactively affected the status of the companies involved. The petitioner argued that post-amalgamation, the dividend declared by Torrent Power Ltd. to its shareholders, which included itself, should not be considered as a dividend, and thus, the tax paid should be refunded. The court examined the legal implications of the amalgamation and the timing of the dividend declaration and payment, ultimately siding with the petitioner.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 794502 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 15-01-2013
• Assessment Year: misc
• Other Referred Cases: Kishinchand Chellaram v. Commr. Of Income Tax, Marshall Sons and Co. (India) Ltd. v. Income Tax Officer, Mafatlal Gagalbhai & Co. Pvt. Ltd. v. C.I.T., New Shorrock Spg. & Mfg. Co. Ltd. v. CIT, Saraswati Industrial Syndicate Ltd v. CIT, Haryana, AIR 1991 SC 70
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PAURAMI SHETH
• Assessee Lawyers: SAURABH SOPARKAR; MONAAL DAVAWALA; SWATI SOPARKAR
• Keywords: Amalgamation; Dividend Distribution Tax; Income Tax; Refund
• Section: 264; 115-O; 115-O; 237; 237

Judgement Text

"C/SCA/5857/2004 JUDGEMNT IN THE HIGH COURT OF GUJARAT AT AHMEDABAD SPECIAL CIVIL APPLICATION NO. 5857 of 2004 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MS JUSTICE SONIA GOKANI ================================================================ 1 Whether Reporters of Local Papers may be allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the constitution of India, 1950 or any order made thereunder ? 5 Whether it is to be circulated to the civil judge ? ================================================================ TORRENT PRIVATE LIMITED....Petitioner(s) Versus COMMISSIONER OF INCOME TAX....Respondent(s) ================================================================ Appearance: MR SAURABH N SOPARKAR, SR. ADVOCATE, WITH MR MONAAL J. DAVAWALA & MRS SWATI SOPARKAR, ADVOCATES for the Petitioner(s) No. 1 MS PAURAMI B SHETH, ADVOCATE for the Respondent(s) No. 1 ================================================================ CORAM: HONOURABLE MR.JUSTICE AKIL KURESHI and Page 1 of 16 C/SCA/5857/2004 JUDGEMNT HONOURABLE MS JUSTICE SONIA GOKANI Date : 15/01/2013 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Petitioner has challenged an order dated 26th March 2004 passed by the Commissioner of Income Tax, Ahmedabad in a petition filed by the petitioner under section 264 of the Income Tax Act, 1961 (‘the Act’ for short). Brief facts are as follows: 2. The petitioner is a company registered under the Companies Act. One Torrent Power Limited had on 4th September 1999, declared interim dividend of Rs.53,90,62,550/- and also paid out such sum to three shareholder companies in the following manner: (1) Torrent Investment Pvt. Ltd. Rs.14,37,50,000/- (2) Torrent Ltd. Rs.25,15,62,500/- (3) Torrent Leasing & Finance Ltd. Rs.14,37,50,000/- Total Rs.53,90,62,500/- 3. A scheme for amalgamation was formulated by eight different companies, including Torrent Power Ltd., Torrent Leasing and Finance Ltd. and Torrent Ltd. The said scheme envisaged 1st August 1999 as the effective date from which such amalgamation would take effect. Such scheme was presented before the Gujarat High Court for its sanction. The Gujarat High Court by its order dated 20th June 2000, sanctioned such scheme. According to such scheme, as sanctioned by the Gujarat High Court, eight different companies amalgamated into Torrent Investment Ltd with effect from 1st August 1999. It is stated that the Torrent Investment Ltd is now renamed as Torrent Private Ltd, i.e. the Page 2 of 16 C/SCA/5857/2004 JUDGEMNT petitioner Company. 4. Torrent Power Ltd. had after the effective date of amalgamation, but before the same was actually sanctioned by the Gujarat High Court, declared and paid out total dividend of Rs.53,90,62,500/- to three shareholder companies in the above noted proportion. The said Company had also deposited with the department the dividend distribution tax of Rs.5,92,96,875/-. On the ground that upon amendment of different companies into Torrent Investments Ltd. with effect from 1st August 1999, the dividend declared by Torrent Power Ltd to the three shareholder companies would cease to bear the character of dividend, in the return that the petitioner filed for the assessment year 2000-01, on 30th November 2000, following note was placed: “3. During the year, following companies amalgamated with the assessee-Company: (1) Torrent Ltd. (2) Torrent Power Ltd. (3) Torrent Finance Ltd. (4) Torrent Leasing & Finance Ltd. (5) Torrent Drugs & Chemicals Pvt. Ltd. (6) Torrent Veterinary Products Ltd. (7) Torrent Holdings Ltd. (8) Tide Pharmaceuticals Pvt. Ltd. The aforesaid Scheme of Amalgamation has already been approved by the Hon’ble High Court of Gujarat vide its order dated 20th June 2000. A copy of the said order is enclosed herewith and is forming part of this return. All accounting effects pursuant to this Scheme of Amalgamation have, therefore, been given in the accounts of the Company as the amalgamation is effective from 1st August 1999. 4...... 5. One of the amalgamated company, viz. Torrent Power Limited, got merged with the assessee company pursuant to the aforesaid Scheme of Amalgamation approved under the aforesaid Page 3 of 16 C/SCA/5857/2004 JUDGEMNT High Court order. In the meantime, during the poeriod of apponted date and the effective date, the said Torrent Power Ltd. has declared interim dividend of Rs.53,90,62,550 on which Corporate Dividend Tax (CDT) of Rs.5,92,96,881 has been duly paid under the provisions of Section 115-O and other relevant provisions. However, the Company has been advised that in view of the fact that the companies paying dividend and receiving dividend have already got amalgamated, there is, in effect, no distribution of dividend. There is no event requiring the Company to make CDT and to pay to the treasury of the Government. In view of this, the said CDT of Rs.5,92,96,875/- may forthwith be refunded. This view of the assessee company is also supported by the ratio of the decision in the case of Mafatlal Gagalbhai & Co. reported in 193 ITR 188. Separate formal application is also being moved to claim such refund in this regard.” 5. Additionally, the petitioner also moved an application before the Assessing Officer on 30th July 2001 and claimed refund of the dividend distribution tax already paid by the Company. In such application, the petitioner drew the attention of the Assessing Officer to the above noted note put in the return filed and contended that by virtue of the amalgamation of different companies, the petitioner no longer had the liability to pay the distribution dividend tax under section 115-O of the Act and that, therefore, the amount of Rs.5,92,96,875/- is refundable to the petitioner. 6. The Assessing Officer, however, by his detailed speaking order dated 24.5.2002, rejected such an application. He was of the opinion that the liability to pay tax would arise as soon as the dividend is credited or distributed or deemed to have been paid, credited or distributed to the shareholders. In this context, he referred to the decision of the Apex court in the case of Kishinchand Challaram v. Commr. Of Income Tax, 46 ITR 640. He further recorded that the petitioner had not claimed Page 4 of 16 C/SCA/5857/2004 JUDGEMNT refund in the return of income filed, but only by a note attached to the return. He was of the opinion that the petitioner failed to point out any provision in the Act under which such refund can be granted. He observed that dividend itself was not revoked at any stage. He, therefore, observed that once dividend has been declared/paid, liability to pay tax as per section 115-O arose and tax had to be paid. 7. Against this order of the Assessing Officer, the petitioner presented revision petition under section 264 of the Act before the Commissioner of Income Tax. Such petition was, however, rejected by the impugned order dated 26th March 2004. The Commissioner observed that the petition itself was not maintainable as the same was not filed against the order passed by the Assessing Officer. Mere correspondence between the petitioner and the Assessing Officer cannot be treated to be an order stipulated under section 264 of the Act. Despite such conclusion, he examined the petitioner’s claim on merits and held that the same was not acceptable. He referred to section 115-O of the Act and relied on the decision of the Apex Court in the case of Kishinchand Chellaram (supra) to hold that the liability to pay tax would arise as soon as the dividend was paid, credited or distributed. He observed that the petitioner fully conscious of the amalgamation scheme pending consideration before the High Court had proceeded to declare the dividend. 8. Before us, learned counsel for the petitioner vehemently contended that both the authorities have committed grave error in rejecting the petitioner’s refund application. It was submitted that once the scheme for amalgamation was sanctioned by the High Court, it would become effective from the date so specified in the scheme unless Page 5 of 16 C/SCA/5857/2004 JUDGEMNT the Court in its order had provided otherwise. In the present case, it was pointed out that the High Court’s order dated 20th June 2000 sanctioning the scheme was silent about the date and, therefore, effective date would be the date envisaged in the scheme itself. Counsel submitted that any dividend declared or paid after the effective date of the amalgamation, but before the same was sanctioned would cease to bear the character of dividend since no dividend could be paid by the company to its own self. That being the position, liability to pay any tax under section 115-O would therefore cease. 9. In this context, counsel relied on a decision of the Apex Court in the case of Marshall Sons and Co. (India) Ltd. v. Income Tax Officer, 223 ITR 809. Counsel also relied on a decision of the Bombay High Court in the case of Mafatlal Gagalbhai and Co. Pvt. Ltd. v. C.I.T., 193 ITR 188 wherein under similar circumstances, it was observed that if by operation of law, the declaration of dividend becomes illegal, inoperative or invalid during the previous year itself, it is possible to conceive of a situation in which an assessee would be entitled to say that no income by way of dividend accrued to him during the previous year. Counsel also relied yet another decision of the Bombay High Court in the case of New Shorrock Spg. & Mfg. Co. Ltd. v. CIT, 208 ITR 765 in which it was observed that amalgamation was effected in the same previous year in which the dividend was declared. The company receiving dividend had ceased to exist by virtue of the orders of amalgamation passed by the two High Courts. Such company was amalgamated in the company paying the dividend. Such income, therefore, could not be taxed as income in the hands of the assessee company. Page 6 of 16 C/SCA/5857/2004 JUDGEMNT 10. On the other hand, learned counsel Ms.Sheth for the Department opposed the petition contending that under section 115-O of the Act, liability to pay dividend distribution tax arose the moment the dividend was paid, declared or distributed. In the present case, once such liability was crystallized, by virtue of any subsequent event, such liability would not get extinguished. Counsel further submitted that in any case, there was no provision under which the petitioner could seek refund of tax already paid. She, in short, supported the orders passed by the Revenue authorities. She also placed heavy relied on the decision of Kishinchand Chellaram (supra). 11. Having thus heard the learned counsel for the parties, we may observe at the outset that the Commissioner committed a serious error in, on one hand, holding that the revision petition was not maintainable and thereafter proceeding to decide the issues on merits and coming to the conclusion that even on merits, the claim of the petitioner was not tenable. If an authority under the Act comes to the conclusion that certain proceedings were not maintainable before him, the only course open would be to dismiss the same as being not competent. Once he concludes that he does not have the competence to allow a revision petition, he is equally not competent to reject the same on merits. In other words, the Commissioner could not have examined the merits of the petitioner’s claim unless he himself was convinced that the revision petition was maintainable. His dual stand that the revision petition was not maintainable and further that on merits also, the petitioner had no arguable case, in law is self-contradictory. Only an authority competent to entertain certain proceedings, be it in original, appellate or revisional nature, can hand down a decision on merits. Page 7 of 16 C/SCA/5857/2004 JUDGEMNT 12. Even otherwise, we are intrigued why the Commissioner felt that the revision was not maintainable. We may recall that the petitioner had moved an application to the Assessing Officer seeking refund of the dividend distribution tax already paid. Such application was rejected by the Assessing Officer by a detailed speaking order. Merely because such application was not in a formal format, the same would not change the character of the application being one seeking refund under the Act. Likewise, the Assessing Officer, after hearing the petitioner made a detailed speaking order dealing with the petitioner’s claim for refund. Such order also cannot be simply brushed aside as one being correspondence between the assessee and the Assessing Officer. Essentially, the Assessing Officer on 24th May 2002, passed an order rejecting the petitioner’s claim for refund. Such order was certainly amenable to revision at the hands of the Commissioner under section 264 of the Act. Section 263, as is well known, empowers the Commissioner to call for and examine the record of any proceedings under the Act and if he considers that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may pass such orders as the circumstances of the case justify. Likewise, section 264 of the Act pertains to revision of other orders. Sub-section (1) thereof provides that in the case of any order other than an order to which section 263 applies passed by an authority subordinate to the Commissioner, he may on his own motion or on an application by the assessee for revision call for the record of any proceeding under the Act in which any such order has been passed and may pass such order as he thinks fit. In the present case, order dated 24.5.2002 passed by the Assessing Officer was certainly one to which the Commissioner’s revisional powers under section 264(1) apply. Page 8 of 16 C/SCA/5857/2004 JUDGEMNT 13. Coming to the merits of the petitioner’s claim, we may recall that a total dividend of Rs.53,90,62,500/- was paid by one Torrent Power Ltd to three different companies, namely, Torrent Investment Pvt. Ltd., Torrent Ltd. and Torrent Leasing and Finance Ltd. Torrent Power Ltd., Torrent Ltd. and Torrent Leasing and Finance Ltd. merged in Torrent Investment Ltd. with effect from 1st August 1999 under a scheme for amalgamation sanctioned by the Gujarat High Court by order dated 20th June 2000. In the return of income filed by the transferee company, a detailed note to this effect was filed pointing out that distribution dividend tax was already paid which, by virtue of such merger of companies, was required to be refunded. 14. By now it is well settled that a merger or amalgamation scheme once sanctioned by the competent court would take effect from the date of the order envisaged in the scheme itself unless, of course, the court sanctioning such scheme otherwise provides. In the case of Marshall Sons and Co. (India) Ltd. (supra), the Apex Court observed as under : “Every scheme of amalgamation has to necessarily provide a date with effect from which the amalgamation/transfer shall take place. The scheme concerned herein does so provide viz. January 1, 1982. It is true that while sanctioning the scheme it is open to the Court to modify the said date and prescribe such date of amalgamation/transfer as it thinks appropriate in this facts and circumstances of the case. If the Court so specifies a date, there is little doubt that such date would be the date of amalgamation/date of transfer. But where the Court does not prescribe any specific date but merely sanctions the scheme presented to it - as has happened in this case - it should follow that the date of amalgamation/date of transfer is the date specified in the scheme as \"the transfer date\". It cannot be otherwise. It must be remembered that before applying to the Court under Section 391(1) a scheme has to be framed and such scheme has to contain a date of amalgamation/transfer. The proceedings before the Court may take Page 9 of 16 C/SCA/5857/2004 JUDGEMNT sometime; indeed, they are bound to take some time because several steps provided by Sections 391 to 394-A and the relevant Rules have to be followed and complied with. During the period the proceedings are pending before the Court, both the amalgamating units, i.e., the Transferor Company and the Transferee Company may carry on business, as has happened in this case but normally provision is made for this aspect also in the scheme of amalgamation. In the scheme before us, clause 6(b) does expressly provide that with effect from the transfer date, the Transferor Company (Subsidiary Company) shall be deemed to have carried on the business for and on behalf of the Transferee Company (Holding Company) with all attendant consequences.” In the case of Saraswati Industrial Syndicate Ltd v. CIT, Haryana, AIR 1991 SC 70, the Apex Court on the question of amalgamation of two companies observed as under : “Two companies may join to form a new company, but there may be absorption or blending of one by the other, both amount to amalgamation. When two companies are merged and are so joined as to form a third company or one is absorbed into one or blended with another, the amalgamating company loses its entity.” The effect of this legal proposition would be that by virtue of deeming fiction of amalgamation relating back to the date envisaged in the scheme, transaction of payment of dividend by the transferor company to other three companies would not retain the character of dividend. As held and observed by the Bombay High Court in the cases of Mafatlal Gagalbhai and Company Pvt. Ltd. (supra) and New Shorrock Spg. & Mfg. Co. Ltd., a company cannot pay dividend to its own self. In the case of Mafatlal Gagalbhai & Co. Pvt. Ltd. (supra), the facts were that the assessee company had declared dividend and paid to another company which was a major shareholder of the assessee company. Even Page 10 of 16 C/SCA/5857/2004 JUDGEMNT before declaration of dividend, negotiations were going on for amalgamation of both the companies. Both the companies, therefore, presented a scheme for amalgamation before the High Court. The High Court sanctioned the scheme under an order dated 6th January 1969. Under the order of the Court, amalgamation was to take effect from 1st April 1968. In this context, the High Court considered the question whether the Tribunal erred in holding that a sum of Rs.2,14,000/- declared as dividend on 2nd September 1968 was liable to be taxed as income in the hands of the assessee company. In this context, the High Court observed that the assessee company ceased to be a shareholder of the jute company with effect from 1st April 1968. It is trite law that a company cannot hold shares of its own company. As a natural corollary, it cannot receive dividend out of its own profits. The High Court eventually held as under : “Evidently, dividend is made taxable as the income of the previous year in which it is declared. The dividend income, thus accrues as income of the previous year in which it is declared as distinct from income of the day on which it is declared. If something happens during the previous year due to which the declaration of dividend is cancelled and the amount paid as dividend is directed to be treated as loans or payment of a part of capital, it is possible to conceive that, at the end of the year, there will not be accrual of income by way of dividend despite a factual declaration. Similarly, if, by operation of law, the declaration of dividend becomes illegal, inoperative or invalid during the previous year itself, it is possible to conceive of a situation in which an assessee would be entitled to say that no income by way of dividend accrued to him during the previous year. What is important is that something factual or legal should have happened during the previous year in which the dividend is declared.” Likewise, in the case of New Shorrock Spg. & Mfg. Co. Ltd. (supra), facts were that the assessee company had on 25.5.72 declared its Page 11 of 16 C/SCA/5857/2004 JUDGEMNT dividend for the year 1971. One Mafatlal Gagalbhai and Co. Pvt. Ltd. holding shares in the assessee company received dividend in respect of its holdings in the assessee company. On 27th October 1972, a proposal was initiated for amalgamation of Mafatlal Gagalbhai and Co. Pvt. Ltd. with the assessee company. Petitions for such purpose were filed before the Bombay High Court and the Gujarat High Court. By the orders passed on 24th September 1973 and 26th September 1973, the said High Courts sanctioned the amalgamation scheme. Under both these orders, amalgamation came into effect from 1st April 1972. In the assessment year 1973-74, the assessee company was sought to be taxed in respect of the dividend income received by Mafatlal Gagalbhai and Co. Ltd. The contention of the assessee was that Mafatlal Gagalbhai and Co. Ltd. having ceased to exist with effect from 1st April 1972, by virtue of the orders of amalgamation, the assessee company could not be taxed for the dividend distributed in favour of Mafatlal Gagalbhai & Company. The Bombay High Court referring to and relying upon the decision of Mafatlal Gagalbhai and Co. Pvt. Ltd. (supra) ruled in favour of the assessee. The decision in the case of Kishinchand Chellaram (supra) of the Apex Court was distinguished. 15. Before us, the situation is very similar. Certain dividend was declared and paid by one of the companies which ultimately merged with the assessee company along with other companies. Before the date of declaration and payment of dividend, scheme for amalgamation was framed. By virtue of the decision of the High Court, such scheme was sanctioned with no variation in the effective date. Thus, the date of amalgamation which actually took effect was prior to the date on which dividend was declared and paid. In that view of the matter, we have no hesitation in holding that by virtue of such subsequent developments, the Page 12 of 16 C/SCA/5857/2004 JUDGEMNT payment of dividend could no longer retain the character of dividend paid by Torrent Power Ltd since there cannot be payment of dividend by one company to its own self. 16. Our attention was also drawn to a decision of Division Bench of this Court dated 13/16th July 2012 in Special Civil Application No.9980 of 2001 in case of Cadila Healthcare Ltd. In the said case, question of payment of sales tax on the sales made by the transferor company to the transferee company between effective date as envisaged in the amalgamation scheme till the date the High Court sanctioned such scheme. In that context, referring to the decision of the Apex Court in the case of Marshall Sons & Co. (India) Ltd. (supra), Division Bench of this Court held that such transfers would cease to be sales between two independent entities but would be treated as branch transfers. It was observed as under : “20. As already noted, the term 'sale' has been defined under section 2(23)of the Act. Upon the High Court sanctioning the scheme for amalgamation, the effective date of amalgamation would be the date mentioned in the scheme, namely, 1st June 1995. Such legal fall out must be given its full implication for all purposes including for the purposes of the Act. If, therefore, in eye of law from 1st June 1995, the transferor companies did not exist, and by virtue of the order of the High Court sanctioning the scheme relating back to the date envisaged in the scheme, ceased to have any legal existence, any transfer from the transferor to the transferee companies must be treated as branch transfer. This was also the view expressed by the Bombay High Court in the case of National Organic Chemicals Industries Ltd. (supra). In the said case, this precisely was the issue presented before the High Court. A Division Bench of the High Court ruled that the Company loses its corporate personality from the date declared by the competent authority under the Companies Act. In case of amalgamation of a company, the High Court being the competent authority, when the High Court sanctions the scheme for amalgamation and declares Page 13 of 16 C/SCA/5857/2004 JUDGEMNT the effective date from which such amalgamation would operate, from such date, the corporate personality of the company gets destroyed. On such principle, the Bombay High Court ruled that no sales tax was payable on the transfer by the transferor company to the transferee company during the period when the scheme for amalgamation was framed till the same was sanctioned by the High Court. We may notice that the statutory provisions arising for consideration in the Bombay High Court contained in the Maharashtra Sales Tax Act in all material purposes are similar to the provisions arising in the Gujarat Sales Tax Act. 17. In the case of Kishenchand Chellaram (supra), the Apex Court did observe that under the Income Tax Act, liability to pay tax attaches as soon as a dividend is paid, credited or distributed or is so declared and further that once a company declares its dividend, it cannot alter the character of credit by passing subsequent resolutions. Such observations were made in the context of the facts of the assessee having once declared dividend subsequently passed a resolution to treat such amount as credit in the accounts of the shareholders. In the present case, however, situation is substantially different. It was not the Company’s own volition by which it desired to change the character of payment of dividend to any other nature. It was because of the subsequent developments, which however, had the effect from the date anterior to the date of payment of dividend and by virtue of which such payment ceased to retain the character of dividend. Any other view would effectively nullify the effective date of amalgamation of companies. 18. Counsel for the Revenue, we may recall, placed reliance on the provisions of section 115-O of the Act. It is undoubtedly true that sub- section (1) of section 115-O starts with a non-obstante clause and provides that notwithstanding anything contained in any other provisions of the Act, in addition to the income chargeable to tax in Page 14 of 16 C/SCA/5857/2004 JUDGEMNT case of a domestic company, there shall be tax on any amount declared, distributed or paid by such company by way of dividend or interim dividend. Sub-section (3) thereof further provides that the principal officer of the domestic company and the company shall be liable to pay tax on distributed profits to the credit of the Central Government within fourteen days from the date of declaration of any dividend or distribution or payment of any dividend whichever is earliest. Sub-section (1) of section 115-O of the Act thus is a charging section and pertains to collection of tax on declaration, distribution or payment of dividend by a domestic company. Sub-section (3) does nothing beyond prescribing the date within which such tax must be credited to the Central Government. Neither of these two provisions or anything else contained in section 115O of the Act, in our opinion, would change the position. In the present case, we are concerned with a situation under which after certain dividend was declared and tax thereon was actually paid, by virtue of the High Court sanctioning the amalgamation scheme, which took effect from a date anterior to the declaration of the dividend would change the very character of such payment and such payment ceased to enjoy the character of dividend. In that view of the matter, the petitioner was perfectly justified in seeking refund of the tax already paid. We may recall that in the return filed, the petitioner had filed a detailed note explaining such position. Claiming refund, a separate application was also filed which unfortunately came to be rejected by the Assessing Officer. The Assessing Officer contended that there was no provision under which such refund can be claimed. Section 237 of the Act, however, provides that if any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under the Act for that year, he shall be entitled Page 15 of 16 C/SCA/5857/2004 JUDGEMNT to a refund of the excess amount. The case of the petitioner would, thus, be clearly covered under the said statutory provisions. 19. In the result, the petition is allowed. The impugned order dated 26.3.2004 passed by the Commissioner of Income Tax confirming the order of the Assessing Officer is quashed. Resultantly, the respondent shall refund to the petitioner a sum of Rs.5,92,96,881/- with statutory interest as applicable. This shall be done preferably within a period of three months from the date of receipt of a copy of this order. Rule is made absolute accordingly. (AKIL KURESHI, J.) (MS SONIA GOKANI, J.) (vjn) Page 16 of 16 "