Alkem Laboratories Limited vs The Commissioner Of Income Tax ...
2023 Latest Caselaw 3821 Patna

          IN THE HIGH COURT OF JUDICATURE AT PATNA
                       Civil Writ Jurisdiction Case No.20009 of 2021
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Alkem Laboratories Limited, a Limited Company incorporated under the Companies Act, 1956, having its office at Exhibition Road, Patna G.P.O., P.S. Gandhi Maidan in the town and District of Patna through its Regional Director, Ashok Kumar, son of Late Lalan Kumar Singh aged about 57, resident of F- 145, P.C. Colony, Kankarbagh, Patna- 800020 PO and PS- Kankarbagh, District- Patna.

... ... Petitioner/s Versus

1. The Commissioner of Income Tax (TDS), Bihar Central Revenue Building (Annexe), Beer Chand Patel Marg, Patna.

2. The Joint/ Additional Commissioner of Income Tax TDS Range, Central Revenue Building (Annexe), Beer Chand Patel Marg, Patna.

3. The Assistant Commissioner of Income Tax (TDS), Patna, Central Revenue Building (Annexe), Beer Chand Patel Marg, Patna.

4. CPC (TDS), Aaykar Bhawan, Sector- 3, Vaishali, Ghaziabad- 201010 (UP).

... ... Respondent/s ====================================================== Appearance :

For the Petitioner/s : Mr. Ajay Kumar Rastogi, Sr. Advocate Ms. Smriti Singh, Advocate Mr. Parijat Saurav, Advocate For the Respondent/s : Mrs. Archana Sinha, Sr. Standing Counsel of Income Tax Department Mr. Alok Shahi, Advocate ====================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE PARTHA SARTHY ORAL JUDGMENT (Per: HONOURABLE THE CHIEF JUSTICE) Patna High Court CWJC No.20009 of 2021 dt.18-08-2023

Date : 18-08-2023

1. Whether the amendments made to the Income Tax

Act, 1961 and the circular issued regulating the period in which

a Refund Application is to be filed would result in the

frustration of the claim of refund made by the assessee, is the

question raised in the writ petition.

2. The assessee, the petitioner herein, is concerned

with the demand made for various years and the refund for the

Assessment Year 2010-11 relatable to the Financial Year 2009-

10.

3. Shri Ajay Kumar Rastogi, learned Senior Counsel

specifically referred to Section 200A of the Income Tax Act

which was brought into the statute as on 01.04.2010; which

provided a specific period for processing of statements of tax

deducted at source; which is till the expiry of one year, from the

end of the financial year in which the statement is filed. The

statement of the TDS deducted in the financial year 2009-10,

was filed by the assessee in the year 2010-11 and hence the

department could have sent an intimation on or before

31.03.2011. No such intimation was sent and later on the

assessee was informed of a demand of Rs. 19.29 lakhs for the

various assessment years starting from 2007-08 to 2021-22 as Patna High Court CWJC No.20009 of 2021 dt.18-08-2023

seen from Annexure-7 series; intimation of outstanding demand.

The assessee even now, despite the date for sending an

intimation under Section 200A having expired only prays for

setting off the demand as against the refund claim which is

permissible under Section 245 of the Act. It is submitted that as

of now the department requires that Form 26B has to be filed,

which Form was introduced only under sub-rule (3A) of Rule

31-A of the Income Tax Rules, effective from 19.02.2013. In

fact, there was no such rule prescribed or the filing of a form

mandated any time before 2013 and not at all for the relevant

assessment year 2010-11. The circular of the department

wherein a specific time has been prescribed to file an

application for refund making a claim of refund, as produced at

Annexure-B in the supplementary counter affidavit filed by the

respondents is alleged to be in contravention of the statutory

provision.

4. The learned Senior Counsel refers to Karimtharuvi

Tea Estate Ltd. v. State of Kerala; (1966) 60 ITR 262 (SC) to

urge that any amendment brought out to the Income Tax Act as

on the 1st of April of a financial year would apply to the

assessments for that year and any amendment brought in after

the first day of April would not apply to the assessment carried Patna High Court CWJC No.20009 of 2021 dt.18-08-2023

out in that year, even if the assessment is made after the

amendment came into force. Hence, the amendment made on

the first day of April of any financial year applies to the

assessment of the prior financial year also, which would be

carried out in the financial year in which the amendment is

enforced as on 1st of April. Kerala Financial Corporation &

Others v. CIT; (1994) 210 ITR 129 (SC) is relied on to contend

that a circular issued under Section 119 cannot be one detracting

from the provisions of the Act and also cannot override the

provisions of the Act. Reliance is also placed on CIT v. Hero

Cycle Pvt. Ltd.; (1997) 228 ITR 463 (SC) to put forth the well

healed proposition that circulars though binding on the

department officials, it would not bind the appellate authorities,

the Tribunal, the Courts or even the assessee itself.

5. Mrs. Archana Sinha, learned Senior Standing

Counsel appearing for the Income Tax Department asserts that

the circular, Annexure-B is applicable to the case of the assessee

and a refund claim ought to have been made within two years

from the end of the financial year in which the return was filed;

which expired on 31.03.2012. It was long after, in 2015 that the

claim was raised. It is argued that Section 200A is not applicable

to the assessee; especially relying on the explanatory note, Patna High Court CWJC No.20009 of 2021 dt.18-08-2023

annexed along with the supplementary counter affidavit which,

by clause 7.4 specifies that the amendment has been made

applicable with retrospective effect from 01.04.2009 and will

accordingly apply in relation to the Assessment Year 2011-12

and subsequent assessment years. The learned Senior Standing

Counsel also relies on Paragraphs 4 and 5 of the counter

affidavit, to further buttress the above contention of

inapplicability of Section 200A for the relevant year.

6. After giving our thoughtful consideration to the

arguments raised, the records and the provisions pointed out, we

are of the opinion that the applicability of Section 200A need

not be dealt with at all; for it being irrelevant to decide the issue.

Section 200A speaks of processing of statements of tax

deducted at source. It delineates the process by which the

statement of tax deducted at source, filed under Section 200A,

has to be processed and speaks of an intimation to be sent to the

deductor as per clause (e). Clause (f) of Section 200A (1) also

mandates that the amount of refund to the deductor in pursuance

of such determination under clause (d), shall be granted to the

deductor. It is the proviso which mandates the intimation to be

sent within one year from the end of the financial year in which

the statement is filed. In fact, this is the limitation on the Patna High Court CWJC No.20009 of 2021 dt.18-08-2023

department's right to send an intimation on expiry of the same;

which provision cannot frustrate the claim of a valid refund

applicable to the assessee. If, as submitted by the Revenue,

Section 200A is not applicable to the relevant year, there is

nothing preventing the Assessing Officer from processing the

statement filed under Section 200 and allowing the refund; on a

request made by the assessee. The very procedure for processing

of statement of tax deducted at source and an intimation along

with a refund, without even a claim from the assessee is brought

in under Section 200A. In that circumstance, the amounts

capable of being refunded could also be adjusted as against the

demand raised, which is far lesser.

7. In so far as sub-rule (3A) of Rule 31A is concerned,

admittedly, the same was brought in only on 19.02.2013 along

with Form 26B. The assessee even now is ready to file an

application under Form 26B; however, the department asserts

that such an application cannot be filed without first satisfying

the demand made under Annexure-7 series. The assessee on the

other hand submits that when far more amounts are due from

the department to the assesee, the department could enable filing

of Form 26B so that the refund can be processed and the

demands set off along with any interest payable to the Patna High Court CWJC No.20009 of 2021 dt.18-08-2023

department from the refunded amounts. The only rider would be

in so far as the department also being made liable to pay the

interest due on the refund.

8. Annexure-B is a circular issued by the Board which

as has been declared in the cited decisions is not binding on this

Court or even the assessee. There can be no prescription of a

limitation period in the circular, which is not available in the

statute or the rules framed thereunder.

9. In the totality of the circumstances, we are of the

opinion that the entire problem could be resolved if the

department avails of the provision under Section 245 of the

Income Tax Act. Having found that there is no limitation for

making a claim of refund; even now the assessee could make an

application and when the refund is processed there can be a set

off made of the amounts remaining due from the assessee for the

various assessment years, from the amounts directed to be

refunded. On the above reasoning, we direct the department to

either enable filing of Form 26B or in the alternative permit the

assessee to make a claim for refund in the physical mode which

shall be considered on the basis of the statement made under

Section 200 regarding the tax deducted at source. The refund

being processed and permitted, the department should set off the Patna High Court CWJC No.20009 of 2021 dt.18-08-2023

amounts due as evident from the demand raised for the various

assessment years from 2007-08 to 2021-22 as per Annexure-7

series.

10. The writ petition is allowed with the above

directions.

(K. Vinod Chandran, CJ)

(Partha Sarthy, J) P.K.P./-

AFR/NAFR
CAV DATE
Uploading Date          21.08.2023
Transmission Date