Colonel Ashwani Kumar Ram Singh (Retd.) vs. Principal Commissioner Of Income Tax I

Writ Petition No.8858/2019

1 HIGH COURT OF MADHYA PRADESH: BENCH AT INDORE Writ Petition No.8858/2019 Colonel Ashwani Kumar Ram Singh (Retd.) v/s Principal Commissioner of Income Tax Indore, dated 29.08.2019 Shri Ram Gilda, learned counsel for the petitioner. Ms. Veena Mandlik, learned counsel for the respondent. The petitioner before this Court, a retired Colonel of the Indian Army, has filed this present petition being aggrieved by the order dated 31.03.2019 passed by the Principal Commissioner, Income Tax, Indore rejecting his claim for refund of TDS on exempted disability pension along with interest. The petitioner's contention is that he suffered a war disability, and finally, an order was passed by the Armed Forces Tribunal, Principal Bench, New Delhi on 03.08.2017 holding that the petitioner is entitled for disability pension. The Director General, Personal Service, Ministry of Defence has finally passed an order on 17.11.2017 granting disability pension to the petitioner w.e.f. 01.01.2006 and the aforesaid facts are not disputed. The petitioner submitted an application for refund of tax keeping in view the order passed by the Armed Forces Tribunal, Principal Bench, New Delhi dated 03.08.2017 and subsequent order passed by the Ministry of Defence holding him entitled for disability pension w.e.f. 01.01.2006 with a prayer to refund the tax, which was deducted by way of TDS for the year w.e.f. 2007 – 08 to 2015 – 2016, i.e. for nine years. The petitioner's application was processed by the Chief Commissioner, Income Tax and the same was Writ Petition No.8858/2019

2 partially allowed, allowing the refund for assessment year 2012 – 13 to 2015 – 16. However, in respect of assessment year 2007 – 08 to 2011 – 12, the application has been rejected on the ground that the Chief Commissioner does not have the power to condone the delay beyond six year, meaning thereby, the refund has been allowed in respect of assessment year 2012 – 13 and 2015 – 16 without interest. The petitioner again submitted an application on 08.04.2019 to the respondent / Income Tax Department to condone the delay for the assessment year 2007 – 08 to 2011 – 12 and to grant interest at the rate of 12% on refund for all the years right from assessment year 2007 – 08 to 2015 – 16, however, the same has not been done and he has approached this Court. A reply has been filed by the respondent / Income Tax Department and the refund ordered in the matter has been admitted by the department, however, it has been stated that in light of the statutory provision as contained under Section 119 (2)(b) of the Income Tax Act, 1961, the delay cannot be condoned by the Chief Commissioner of Income Tax and the same has to be condoned by the Central Board of Direct Taxes. Learned counsel for the respondent has stated before this Court that the interest has not been paid in light of the CBDT Circular No.9/2015 dated 09.06.2015, as it is a belated claim made by the assessee. She has placed heavy reliance upon paras – 3 and 6 of the said circular. Heard learned counsel for the parties at length and perused the record. The matter is being disposed of at the Writ Petition No.8858/2019

3 motion hearing stage itself with the consent of the parties. In the present case, the undisputed facts reveal that the petitioner, who is a decorated officer of the Indian Army, after fighting with the enemy through out his career, was forced to fight with his parent organization in the matter of grant of disability pension. Even he fought a battle with Union of India / Ministry of defence as he was being deprived of disability pension in spite of the fact that he suffered disability while on active duty, and finally, the Armed Forces Tribunal, Principal Bench, while passing an order in O.A. No.1134/2016, has allowed the original application and has held that the petitioner shall be entitled for disability pension. Thereafter, the Ministry of Defence, through the Director General Personal Services, has finally passed an order implementing the order passed by the Armed Forces Tribunal holding that the petitioner is entitled for disability pension w.e.f. 01.01.2006. The petitioner, event though, he succeeded in the battle with his own parent organization / Ministry of defence is now being forced to fight another battle with another limb of Government of India i.e. Income Tax Department and it appears that his war is still not over. Undisputedly, it is nobody's case that the petitioner is not entitled for disability pension. The technicalities are coming in his way in the matter of grant of refund. Section 119 of the Income Tax Act, 1961 reads as under:- “119. Instructions to subordinate authorities (1) The Board may, from time to time, issue such orders, instructions and directions to other income- Writ Petition No.8858/2019

4 tax authorities as it may deem fit for the proper administration of this Act, and such authorities and all other persons employed in the execution of this Act shall observe and follow such orders, instructions and directions of the Board: Provided that no such orders, instructions or directions shall be issued- (a) so as to require any income- tax authority to make a particular assessment or to dispose of a particular case in a particular manner; or (b) so as to interfere with the discretion of the 2 Deputy Commissioner (Appeals)] 3 or the Commissioner (Appeals)] in the exercise of his appellate functions. (2) Without prejudice to the generality of the foregoing power,- (a) the Board may, if it considers it necessary or expedient so to do, for the purpose of proper and efficient management of the work of assessment and collection of revenue, issue, from time to time whether by way of relaxation of any of the provisions of sections 5 139], 143, 144, 147, 148, 154, 155, 6 sub- section (1A) of section 201, sections 210, 211, 7 234A, 234B], 234C], 271 and 273 or otherwise, general or special orders in respect of any class of incomes or class of cases, setting forth directions or instructions (not being prejudicial to assessees) as to the guidelines, principles or procedures to be followed by other income- tax authorities in the work relating to assessment or collection of revenue or the initiation of proceedings for the imposition of penalties and any such order may, if the Board is of opinion that it is necessary in the public interest so to do, be published and circulated in the prescribed manner for general information; (b) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order, authorise 8 any income- tax authority, not being a Deputy Commissioner (Appeals) or Commissioner (Appeals)] to admit an application or claim for any exemption, deduction, refund or any other relief under this Act after the expiry of the period specified by or under this Act for making such application or claim and deal with the same on merits in accordance with law. (c) the Board may, if it considers it desirable or expedient so to do for avoiding genuine hardship in any case or class of cases, by general or special order Writ Petition No.8858/2019

5 for reasons to be specified therein, relax any requirement contained in any of the provisions of Chapter IV or Chapter VIA, where the assessee has failed to comply with any requirement specified in such provision for claiming deduction thereunder, subject to the following conditions, namely:- (i) the default in complying with such requirement was due to circumstances beyond the control of the assessee; and (ii) the assessee has complied with such requirement before the completion of assessment in relation to the previous year in which such deduction is claimed: Provided that the Central Government shall cause every order issued under this clause to be laid before each House of Parliament.]” It is true that the Commissioner of Income Tax is empowered to condone a delay up to six years and beyond that, the Central Board of Direct Taxes is empowered to condone the delay and in those circumstances, the application submitted by the petitioner for refund of tax for the assessment year 2007 – 08 to 2015 – 16 has been partially allowed and refund has been ordered only in respect of assessment year 2012 – 13 to 2015 – 2016 without interest. Heavy reliance has been placed upon a circular issued by the Central Board of Direct Taxes dated 09.06.2019. Reliance has been placed by the learned counsel for the respondent upon paras – 3 and 6 of the CBDT circular. The aforesaid paragraph reads as under:- “3. No condonation application for claim of refund / loss shall be entertained beyond six years from the end of the assessment year for which such application / claim is made. This limit of six years shall be applicable to all authorities having powers to condone the delay as per the above prescribed monetary limits, including the Board. A condonation application should be disposed of within six months from the end of the month in which the application is Writ Petition No.8858/2019

6 received by the competent authority, as far as possible. 6. A belated application for supplementary claim of refund (claim of additional amount of refund after completion of assessment for the same year) can be admitted for condonation provided other conditions as referred above are fulfilled. The powers of acceptance / rejection within the monetary limits delegated to the Pr.CCsIT/CCsIT/Pr.CsIT/ CsIT in case of returns claiming refund and supplementary claim of refund would be subject to the following further conditions: (i) The income of the assessee is not assessable in the hands of any other person under any of the provisions of the Act. (ii) No interest will be admissible on belated claim of refunds. (iii) The refund has arisen as a result of excess tax deducted/collected at source and/or excess advance tax payment and/or excess payment of self-assessment tax as per the provisions of the Act.” Meaning thereby, there is a power with the Central Board of Direct Taxes to condone the delay. There appears to be no justification in forcing the petitioner to file an application before Central Board of Direct Taxes. Once the power is there and it was not the petitioner, who was at fault in the matter, this Court, in the peculiar facts and circumstances of the case, is of the considered opinion that the delay can be condoned by this Court also, and therefore, the delay in filing the application for refund of tax is hereby condoned. It is not a case where the assessee was sleeping over his right, it is a case where the assessee was fighting with the department for his legitimate right of grant of disability pension, as he was disabled officer and his original application was allowed only on 03.08.2017 and the order was passed by the Ministry of Defence on 17.11.2017 granting him disability pension w.e.f. Writ Petition No.8858/2019

7 01.01.2006 and with quite promptitude he has submitted an application for refund of tax. This Court in the case of Colonel Madan Gopal Singh Negi v/s CIT (II) (W.P. No.29017/2018) vide judgment dated 28.02.2019, in similar circumstances has held as under:- “In the considered opinion of this Court, as the income of the petitioner was exempted, the department does not have any other choice except to refund the amount and the disabled Army Officer cannot be made to run from pillar to post on account of various technicalities as stated in the writ petition. This Court is aware of its limitation of not Travelling and Traversing into the prohibited territory of “Legislating through Court orders” however this Court feels duty bound to state the obvious, more so when the “Call of Duty” of a Judge inspite him to Underline the requirement of brushing aside the “Administrative Technicality” while Dispensing Justice. Our Army Soldiers, Naval Officials and Fighter are Day and Nights protecting Our Territorial Borders from Enemy Infiltration and Attacks and even while putting their life to the greatest risk, are keeping all Citizens safe and Secure and making Our life free from all such Dangers, where they don't think of “Technicalities” while Fighting with Enemies at the Front, as to whether pulling the Trigger of their Gun would invite a “Court of inquiry” and from this practicalperspective this Court wants to express its concern for not putting too much of technicalities in such matters by those who are invested with Administrative Powers to deal and decide the affairs of the Personnel of Indian Armed Forces. The Court records and reiterates its absolute commitment to adherence of Rule of Law in its strictest terms, without carving out any exception to it, however it intends to convey its concern for the welfare of the “War Heros” who marvels at the Borders and within the Country, should not be unnecessarily Harassed or Troubled, for Technical adherence to some archaic administrative procedures having no thoughtful purpose sought to be achieved, while denying Legitimate Relief to the Members of the Armed Forces.” Writ Petition No.8858/2019

8 In light of the aforesaid and in the considered opinion of this Court, as this Court has already condoned the delay, the respondent is directed to process the claim of the petitioner and to grant a refund for which he is lawfully entitled within a period of sixty days from the date of receipt of certified copy of this order. In the matter of grant of interest, the CBDT circular will not come in way of the petitioner, as the petitioner is not at fault in the matter. The respondent shall also pay the interest in respect of the entire amount right from 2007 – 08 to 2015 – 16, as the statute i.e. Income Tax Act, 1961 does not debar an assessee, keeping in view the peculiar facts and circumstances of the case, for grant of interest. With the aforesaid, the present writ petition stands allowed. No order as to costs, Certified copy, as per rules. (S.C. SHARMA) J U D G E (SHAILENDRA SHUKLA) J U D G E

Ravi Digitally signed by Ravi Prakash Date: 2019.09.03 17:22:52 +05'30'