State Bank of Indore vs Commissioner of Income Tax

B.A. Khan, J.—The assessee has filed this application u/s 256(2) of the Income Tax Act, 1961, to refer four questions stated therein to be questions of law for the opinion of this court. Learned counsel for the assessee, Mr. Mahajan, however, pressed in service only question No. 1 and sought reference by the Tribunal on this question which reads as follows :

"(i) Whether, on the facts and circumstances of the case, the learned Tribunal was justified in holding that issue of denial of refund u/s 141A of the Income Tax Act, could not be raised and the appellate order of the Commissioner of Income Tax (Appeals) passed against the assessment order dated March 24, 1986 for the assessment year 1983-84 and dated March 27, 1983, for the assessment year 1984-85 had become final ?"

The facts leading to the filing of this application are that the assessee-bank filed a return of income on June 30, 1983, declaring income of Rs. 1,08,23,388 along with the application for refund in Form No. 30 claiming refund of Rs. 26,47,308. The Assessing Officer allegedly failed to make assessment u/s 141A within six months from the date of filing of the return and refund the claim. He, however, completed the regular assessment on March 24, 1986, u/s 143(3) determining the total income at Rs. 1,81,98,929. On appeal the Commissioner of Income Tax (Appeals) granted partial relief to the assessee, vide order dated March 16, 1983, and while giving effect to this order the Assessing Officer determined the same at Rs. 46,619 as refundable which was set off by charging interest u/s 220(2) at Rs. 2,69,763 and the balance payable was determined at Rs. 2,23,144 which was adjusted against refund for the assessment year 1984-85. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) for non-issue of refund of Rs. 26,47,308 and Rs. 46,619 u/s 141A and charging interest u/s 220(2) and consequently raising a demand of Rs. 2,23,144 and adjusting the same against the refund for the assessment year 1984-85. This appeal was rejected and the matter was carried in appeal to the Income Tax Appellate Tribunal, on the plea that the Revenue had denied the refund to the asses-see in contravention of the mandatory provisions of Section 141A. Reliance in this regard was placed on B.K. Khanna and Co. Vs. Union of India and others, , and a judgment of the Gujarat High Court. But it did not carry conviction with the Tribunal holding that assessment order dated March 24, 1986, had become final on the point and that denial of refund u/s 141A could not be raised. The Tribunal accordingly affirmed the order of the Commissioner of Income Tax (Appeals).

The Revenue (sic) felt aggrieved and filed an application u/s 256(1) calling for a reference of four questions stated to be questions of law for the opinion of this court which was rejected on the ground that no referable question arose in the matter.

Heard learned counsel and examined the record. Considering that the provisions of Section 141A were attracted to the situation and that the assessee was also relying upon some judgments of the High Courts, we deem it appropriate to require the Tribunal to submit a statement of case on the questions stated above. The application is disposed of accordingly to the extent indicated above.