Bombay High Court
Group M Media India Pvt. Ltd vs The Union Of India And 4 Others on 15 October, 2016
Bench: M.S. Sanklecha
2067-16-wp=.doc
IN THE HIGH COURT OF JUDICATURE AT BOMBAY
ORDINARY ORIGINAL CIVIL JURISDICTION
WRIT PETITION NO. 2067 OF 2016
M/s. Group M. Media India Pvt. Ltd.
Mumbai .. Petitioner
v/s.
The Union of India & Ors. .. Respondents
Mr. R.V. Easwar, Senior Counsel a/w Mr. Harsh Kapadia i/b Paras Savla
for the petitioner
Mr. N.C. Mohanty for the respondent
CORAM : M.S. SANKLECHA &
S.C. GUPTE, J.J.
DATED : 15 th OCTOBER, 2016.
ORAL JUDGMENT : (Per M.S. Sanklecha, J.)
1. By consent of the parties, petition is taken up for final disposal at
the stage of admission.
2. This petition under Article 226 of the Constitution of India
challenges the inaction / failure on the part of the Assessing Officer in
processing the return of income under Section 143(1) of the Income
Tax Act, 1961 (the Act) and granting refund consequent thereto in
accordance with Section 143 (1D) of the Act. This petition relates to
Assessment Year 2015-16.
Uday S. Jagtap 1 of 10
2067-16-wp=.doc
3. Briefly, the facts leading to this petition are as under :-
(a) On 29th November, 2015, the petitioner filed its return of income
for the Assessment Year 2015-16 under Section 139 of the Act. In its
return, the petitioner declared an income of Rs.144.48 crores and
claimed a refund of Rs.27.24 crores.
(b) On 12th April, 2016, the Assessing Officer issued a notice under
Section 143(2) of the Act to the petitioner relating to the subject
assessment year.
(c) On 27th April, 2016, the petitioner requested the Assessing
Officer to process its return of income for the subject Assessment Year
in terms of Section 143(1) of the Act and grant the consequent refund
due. The petitioner had annexed Form 30 claiming a refund of
Rs.27.24 crores to the above communication.
(d) In the absence of any positive response, the petitioner filed
further representations dated 1 st June, 2016 inter alia requesting the
Assessing Officer to process the return of income under Section 143(1)
and grant a consequent refund. This also failed to elicit any response
from the Assessing Officer.
(e) Thereafter, the petitioner met the Assessing Officer on 6 th June,
2016 for expediting the process of the refund claim. At that time, the
Uday S. Jagtap 2 of 10
2067-16-wp=.doc
petitioner was informed of Central Board of Direct Taxes (CBDT)
Instruction No.1 of 2015, which seemed to fetter the exercise of his
discretion under Section 143(1D) of the Act. The petitioner by its letter
dated 6th and 24th June, 2016 inter alia pointed out to the Assessing
Officer that the Delhi High Court, in an order dated 11 th May, 2016, had
quashed Instruction No.1 of 2015 in the case of Tata Teleservices Ltd.
Vs. Central Board of Direct Taxes & Anr. W.P. (C) No.12304/2015
and CM 32604/2015.
(f)
Thereafter, on 12th August, 2016, the petitioner made a further
representation to the Assessing Officer as well as to the Principal
Commissioner of Income Tax, City-12, inter alia seeking the processing
of its return in terms of Section 143(1) of the Act and consequent
refund in respect of its return filed for A.Y. 2015-16.
4. The Assessing Officer yet did not respond to the petitioner's
demand for refunds. Thus, the present petition seeking a mandamus to
the Assessing Officer to process the return of income under Section
143(1) of the Act and consequent refund, if due, is filed.
5. The respondent Revenue has responded to the petition by filing
an affidavit-in-reply dated 7th September, 2016 of Mr. Rishi Kumar,
Uday S. Jagtap 3 of 10
2067-16-wp=.doc
Assistant Commissioner of Income Tax. In the affidavit-in-reply, it is
pointed out that the reason for not processing the petitioner's return of
income under Section 143(1) of the Act and considering the refund due
consequent thereto under Section 143(1D) of the Act was CBDT
Instruction No.1 of 2015 dated 13th January, 2015. In this case, notice
under Section 143(2) of the Act has been issued on 12 th April, 2016.
Therefore, in terms of the above Instruction, the return of income
cannot be processed. In support, reliance is placed by the Revenue on
the following paragraphs in Instruction No.1 of 2015 dated 13 th
January, 2015:-
"4. Considering the unambiguous language of the relevant
provision and the intention of law as discussed above, the
Central Board of Direct Taxes, in exercise of the powers conferred
on it under Section 119 of the Act hereby clarifies that the
processing of a return cannot be undertaken after notice has
been issued under sub-section (2) of section 143 of the Act. It
shall, however, be desirable that scrutiny assessments in such
cases are completed expeditiously.
5. This may be brought to the notice of all concerned for
strict compliances."
6. Mr. Easwar, learned Senior Counsel appearing for the petitioner
points out that Instruction No.1 of 2015 dated 13 th January, 2015
Uday S. Jagtap 4 of 10
2067-16-wp=.doc
issued by the CBDT has been quashed by the Hon'ble Delhi High Court
in Tata Teleservices Ltd. (supra). Therefore, the Assessing Officer
cannot now place reliance upon it to disregard the statutory duty cast
upon him in terms of Section 143(1) and 143(1D) of the Act. Further
attention was drawn to the decisions of this Court in Commissioner of
Income Tax Vs. Smt. Godavaridevi Saraf, 113 ITR 589 and
Commissioner of Income Tax Vs. Valson Dyeing Bleaching and
Printing Works, 259 ELT 33 wherein it is held that where a provision
of law was declared ultra virus by the competent Court then the same
will be binding on all Authorities administering the Act all over the
Country. This so long as there is no contrary decision on that point.
The Assessing Officer is, therefore, obliged to ignore Instruction No.1 of
2015 dated 13th January, 2015 and decide the petitioner's application to
process the refund under Section 143(1) of the Act and consider the
applicability of sub-section 1(D) of Section 143 of the Act to the facts of
the present case for the purpose of grant of refund.
7. Mr. Mohanty, learned Counsel appearing for the respondent
Revenue does not dispute that the decision of the Delhi High Court is
the only decision on the issue of validity of instruction no.1 of 2015
dated 13th January, 2015 and based on this decision, the Assessing
Uday S. Jagtap 5 of 10
2067-16-wp=.doc
Officer would be required to act independent of the above instruction.
However, he contends that the Assessing Officer has time to process
the petitioner's return of income in terms of Section 143(1) of the Act
till 31st March, 2017. Thus, it is submitted that no mandamus can be
issued before 31st March, 2017 directing the Assessing Officer to
process the return of income under Section 143(1) of the Act.
8. Before us, Mr. Mohanty does not dispute the fact that in view of
the Delhi High Court decision in Tata Teleservices Ltd. (supra),
Instruction No.1 of 2015 dated 13 th January, 2015 of the CBDT would
not fetter the Assessing Officer in any manner from exercising his
discretion to process the return of income under Section 143(1) of the
Act and considering the grant of refund under Section 143(1D) of the
Act. The petitioner before the Delhi High Court was not granted
refund, pending scrutiny assessment in view of Instruction No.1/2015
dated 13th January, 2015. The Delhi High Court held that the
instruction issued is without jurisdiction. This for the reason that
although Section 119 of the Act does empower the CBDT to issue
instructions for the proper administration of the Act, this power is
hedged in by limitations as provided in the proviso to Sections 119(1)
and also 119(2) of the Act, i.e. the CBDT cannot direct an Assessing
Uday S. Jagtap 6 of 10
2067-16-wp=.doc
Officer to dispose of a case in a particular manner nor can the
instructions be prejudicial to the assessee. Therefore, the circulars /
orders / instructions issued by the CBDT under Section 119 of the Act
would be binding upon the Revenue only to the extent they are
beneficial to the assessee. Such Instructions, if not beneficial to the
assessee, cannot prevail over the Act. In the above view, the Delhi
High Court held that Instruction No.1 of 2015 dated 13 th January, 2015
issued by the CBDT is unsustainable in law and, therefore, set it aside.
It must also be pointed out that the Revenue is not disputing the
decision of the Delhi High Court in Tata Teleservices Ltd. (supra) either
on facts or in law. Therefore, in view of the decision of this Court in
Godavaridevi Saraf (supra), the officers implementing the Act are
bound by the decision of the Delhi High Court and Instruction No.1 of
2015 dated 13th January, 2015 has ceased to exist. Therefore, no
reference to the above Instruction can be made by the Assessing Officer
while disposing of the petitioner's application in processing its return
under Section 143(1) of the Act and consequent refund, if any, under
Section 143(1D) of the Act. Needless to state that the Assessing Officer
would independently apply his mind and take a decision in terms of
Section 143 (1D) of the Act whether or not to grant a refund in the
facts and circumstances of the petitioner's case for A.Y. 2015-16.
Uday S. Jagtap 7 of 10
2067-16-wp=.doc
9. The only contention on behalf of the Revenue to oppose the
petition is that as the Assessing Officer has time available to process
the refund till 31st March, 2017, no mandamus can be issued till 31 st
March, 2015. We repeatedly asked of Mr. Mohanty, the learned
Counsel for the Revenue, if there was any reason why the return could
not be processed before 31st March, 2017. No reasons are forthcoming
from the Revenue as to why the Assessing Officer will not able to
dispose of the application for refund or process the return under
Section 143(1) of the Act before 31st March, 2017. This conduct /
stand of the Assessing Officer, to say the least, is most disturbing in the
context of the fact that the petitioners have been seeking refund since
April, 2016. First, he does not deem it proper to inform the petitioner
in writing why he cannot deal with the application and after the
petitioner moves the Court, the stand taken is that no direction can be
given to him till 31st March, 2017 which is the last date to process the
return under Section 143(1) of the Act. This attitude on the part of the
Assessing Officer is preposterous.
10. The action of the officer on the ground urged seems to be in
complete variance with the higher echelons of administration of the
Uday S. Jagtap 8 of 10
2067-16-wp=.doc
tax administration being an assessee friendly regime. In fact, the
CBDT has itself issued Instruction No.7/2012, dated 1st August, 2002
wherein they have specifically directed the officers of the Revenue to
process all returns in which refunds are payable expeditiously.
Similarly, as late as in 2014 in the Citizen's Charter issued by the
Income Tax Department in its vision statement states that the
Department aspires to issue refunds along with interest under Section
143(1) of the Act within 6 months from date of electronically filing the
returns. In this case, the return was filed on 29 th November, 2015, yet
there is no reason why the Assessing Officer has not processed the
refund and taken a decision to grant or not grant a refund under
Section 143(1D) of the Act. This attitude on the part of the Assessing
Officer leaves us with a feeling (not based on any evidence) that the
Officers of the Revenue seem to believe that it is not enough for the
assessee to please the deity (Income Tax Act) but the assessee must also
please the priest (Income Tax Officer) before getting what is due to him
under the Act. The officers of the State must ensure that their conduct
does not give rise to the above feeling even remotely.
11. Lastly, we must for the benefit of the Revenue reiterate that our
powers under Article 226 of the Constitution are very wide for the
Uday S. Jagtap 9 of 10
2067-16-wp=.doc
purpose of doing justice. The powers of a Court under Article 226 of
the Constitution of India are not limited only to prerogative writs but
also to issue any direction or order for doing justice. Therefore, Article
226(1) of the Constitution empowers the Court to issue directions,
orders or writs, including writs in the nature of habeas corpus,
mandamus, certiorari or any of them. Therefore, in view of the conduct
of the Assessing Officer, we are compelled to direct the Assessing
Officer to consider and process the petitioner's representation dated
12th August, 2016 and dispose of the same as expeditiously as possible
within a period of 8 weeks from today.
12. The Petition is allowed in above terms. No order as to costs.
(S.C. GUPTE, J.) (M.S. SANKLECHA, J.)
Uday S. Jagtap 10 of 10
