VASCO SALES AND MARKETING CORPORATON vs. DEPUTY COMMISSIONER OF INCOME TAX,
What did the High Court hold?
The High Court condoned the delay in filing the application for refund, even though it was due to the petitioner's fault. Following the precedent set in Pala Marketing Co-op. Society Ltd. v. Union of Indian and Ors. (2008 (1) KLJ 561), the Court held that delay in refund applications should be liberally considered. The matter was remitted to the Chief Commissioner of Income Tax (third respondent) to reconsider the refund application afresh on its merits. The Chief Commissioner was directed to pass appropriate orders within three months from the date of receiving a copy of the judgment. The operative direction was to reconsider the refund claim and pass orders, effectively granting relief by allowing a fresh consideration.
What were the facts?
The petitioner, Vasco Sales and Marketing Corporation, is challenging orders (Exts.P13 and P16) from the Deputy Commissioner and Chief Commissioner of Income Tax, respectively, rejecting their claims for refund of advance income tax paid for assessment years 1996-97 and 1997-98. The petitioner admits that returns for these years were not filed voluntarily but only in response to notices under Section 148 of the Income Tax Act. For AY 1996-97, the return was filed on June 30, 1998, showing a total income of Rs. 2,520/- against advance tax paid of Rs. 1,26,451/-. For AY 1997-98, the return was filed on February 29, 2000, declaring a loss of Rs. 3,98,599/-. The claims for refund were rejected by the authorities.
What were the issues?
1. Whether the High Court can entertain a writ petition challenging the rejection of refund claims for advance tax paid for assessment years 1996-97 and 1997-98, where the returns were filed belatedly and the claims for refund were also made belatedly. Assessee's Contention: The petitioner argues that the delay in filing returns and refund applications, though due to their fault, should be liberally condoned, causing genuine hardship if not. They rely on the High Court's judgment in Pala Marketing Co-op. Society Ltd. v. Union of Indian and Ors. (2008 (1) KLJ 561) which held that delay in filing refund applications needs to be condoned by the Board under Section 119(2)(b) to process the application on merit. Revenue's Contention: The respondents state that the returns were filed only in response to notices under Section 148 and that the claims for refund were filed belatedly without valid reasons, thus justifying their rejection as per the Income Tax Act.
Which sections of the Income-tax Act were involved?
Section 148,Section 119(2)(b),Section 239,Section 139(1),Section 139(4)
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
JUDGMENT The petitioner firm is an assessee under the Indian Income Tax Act. Exts.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 97-98 is under challenge in this writ petition. This writ petition is filed with the following prayers: a) to call for the records leading to Exts.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 under Section 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 30-6-1998 and the total income was only Rs.2520/-. A total amount of Rs.1,26,451/- was paid as advance tax.
Therefore the assessing authority dropped the proposal for imposing
W.P.(C)No.24109 OF 2005 :: Page numbers :: penalty. 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 29-2- 2000 declaring a loss of Rs.3,98,599/-. Since the request for refund of the advance tax was rejected by the Chief Commissioner, 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 fild only in response to notice issued under Section 148 of the Income Tax Act. In as much 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 2008 (1) KLJ 561 (Pala Marketing Co-op. Society Ltd. v. Union of Indian and Ors.) 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:
W.P.(C)No.24109 OF 2005 :: Page numbers :: “Chapter XIV is mainly oriented to ensure assessment and recovery of tax to protect the interest 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 under Section 239 of the Act. In other words, if delay is not condoned by the Board under Section 119(2)(b), such application cannot be processed under Section 139(1) or 139(4) of the Act. I am therefore, of the view that in order to consider belated return for refund on merit, delay has to be necessarily condoned by the Board under Section 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 merits in accordance with law and pass appropriate orders within three months from the date of receipt of a copy of this judgment. Writ petition is disposed of. B.P.RAY, JUDGE jes
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- Adj Agri International LLP, Rajkot vs The Income Tax Officer, Ward-1(1)(1), RajkotITA 1198/RJT/2026[2018-19]Status: Disposed21 Oct 2026AY 2018-19
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