Income Tax Refund Can't Be Denied To Taxpayer For Discrepancy In Form 26AS Filed: Delhi High Court
While observing that tax was duly deducted by the Land Acquisition Collector but was not disclosed for some reasons and hence the credit was not reflected in Form 26AS, the Delhi High Court held that the assessee/ petitioner cannot be penalized for the mere reason that the Form 26AS suffered from a discrepancy.
Therefore, condoning the delay u/s 119 of the Income tax Act, the High Court quashed an order, by which the Revenue Department had rejected the Assessee's application to submit a revised return for the relevant AY.
The High Court also directed the Department to take on board the revised return to be filed by the Assessee.
Section 119(2)(b) of the Income tax Act allows condonation of delays in filing returns, whereby the CBDT authorizes authorities to accept claims post expiry, with specific monetary limits.
Referring to Section 237, the High Court pointed that assessee is entitled to place its case before the AO by providing all material particulars, so that a prayer for refund may be processed.
The Division Bench of Delhi High Court comprising Justice Yashwant Varma and Justice Ravinder Dudeja observed that “where amount of tax paid or treated as paid for and on behalf of the assessee if found to be in excess of that which is chargeable, the assessee would become entitled to claim a refund”. (Para 17)
The provision for refund and review is in line with the constitutional imperatives of Article 265 of the Constitution, added the Bench.
Facts of the case
The Assessee, an individual, received compensation under the Land Acquisition Act. Since tax was deducted on compensation but did not reflect in Assessee's Form 26AS, the Assessee preferred a writ seeking an appropriate direction for the Land Acquisition Collector to accord credit of TDS of Rs.1.68 lacs against the total enhanced compensation of Rs. 18.59 lacs. The writ was allowed with a direction, and in consonance of the same, the Land Acquisition Collector issued a revised Form 16A in respect of TDS which already stood deducted. The assessee thereafter filed an application for submitting a revised return, which was rejected. Hence, the assessee approached the High Court.
Observations of the High Court
The Bench found that the AO had rejected the assessee's application on the ground that as per CBDT Circular No. 09/2015, an application for condonation of delay can't be entertained beyond six years from the end of the AY for which such an application or a claim may be made.
Finding that the CBDT Circular does not provide for any determinate date, the Bench stated that the assessee was ultimately accorded relief by various writ courts many years after the dispute had arisen.
It would thus be wholly inequitable to enforce a time frame as contemplated under the CBDT Circular and deny relief which is otherwise liable to be accorded to assessee, added the Bench.
Even though the petition had been preferred after an expiry of six years, the Bench clarified that the petitioner would be entitled to be accorded permission to file an amended tax return.
Thus, the High Court allowed Assessee's petition and directed that the return may be duly placed before the concerned AO for processing the prayer for refund in accordance with Section 227.
Counsel for Petitioner/ Assessee: Advocates Ram Kumar, Sushil Kumar and K. K. Nangia
Counsel for Respondent/ Revenue: Advocates Puneet Rai, Ashvini Kumar, Rishabh Nangia, Sanjay Kumar Pathak, K. K. Kiran Pathak, Sunil Kumar Jha, M. S. Akhtar and Mayank Arora
Case Title: Hari Kishan Sharma vs. Govt of NCT of Delhi
Case Number: W.P.(C) 915/2019