Vasco Sales and Marketing Corporation vs Deputy Commissioner of Income Tax and Others

B.P. Ray, J.—The petitioner firm is an assessee under the Indian income tax Act. Exhibits P13 and P16 orders of the first and third respondents rejecting the petitioner''s claim for refund of the advance income tax paid for the assessment years 1996-97 and 1997-98 is under challenge in this writ petition. This writ petition is filed with the following prayers:

(a) to call for the records leading to exhibits P13 and P16 and quash the same by the issuance of a writ of certiorari or other appropriate writ, order or direction;

(b) to issue a writ of mandamus directing the respondents to order refund as claimed by the petitioner.

Learned counsel for the petitioner submits that for the assessment years 1996-97 and 1997-98, the petitioner firm could not file the returns under the Indian income tax Act and the returns were filed only after notice u/s 148 of the Act. Even after the notice, the petitioner firm could not file the returns and extension of time was requested. The return for 1996-97 was filed on June 30, 1998, and the total income was only Rs. 2,520. A total amount of Rs. 1,26,451 was paid as advance tax. Therefore, the assessing authority dropped the proposal for imposing penalty. The petitioner applied for refund of the tax which was rejected by the Chief Commissioner. Similarly, for the assessment year 1997-98 also, there was delay in filing the return. The return was ultimately filed on February 29, 2000, declaring a loss of Rs. 3,98,599. Since the request for refund of the advance tax was rejected by the Chief Commissioner, the petitioner filed this writ petition.

Heard both sides and perused the materials available on record.

I have gone through the statement filed on behalf of the respondents wherein it is categorically stated that the returns for the assessment years in question were not filed by the petitioner voluntarily but filed only in response to notice issued u/s 148 of the income tax Act. Inasmuch as the claim of refund having been filed belatedly without any valid reasons, the authorities had to reject the claim as laid down in the income tax Act.

Learned counsel for the petitioner has relied upon a judgment of this honourable court reported in Pala Marketing Co-op. Socy. Ltd. Vs. Union of India (UOI) and Others, wherein it is stated that the failure to condone the delay causes genuine hardship to the assessee. The relevant portion of the judgment reads as follows (pages 179-180 of 311 ITR 179):

Chapter XIV is mainly oriented to ensure assessment and recovery of tax to protect the interests of the Revenue. On the other hand, Chapter XIV provides for refund and an application in this regard can be entertained only if it is filed within the time limit prescribed u/s 239 of the Act. In other words, if delay is not condoned by the Board u/s 119(2)(b), such application cannot be processed u/s 139(1) or 139(4) of the Act. I am, therefore, of the view that in order to consider belated return for refund on the merit, delay has to be necessarily condoned by the Board u/s 119(2)(b) of the Act.

Considering the entire facts and circumstances of the case and following the decision cited above, I am of the view that the delay even though due to the fault of the petitioner, should liberally be condoned. Therefore, I condone the delay in filing the application for refund and remit the matter to the third respondent/Chief Commissioner of Income Tax to reconsider the application afresh on the merits in accordance with law and pass appropriate orders within three months from the date of receipt of a copy of this judgment. The writ petition is disposed of.