VITP PVT LTD., MADHAPUR, HYDERABAD AND 1, vs. ASST.COMMISSIONER OF INCOME TAX, HYDERABAD AND 1,
What did the High Court hold?
The High Court, in view of the various orders and subsequent rectification and modification orders, noted that an amount of Rs. 52,65,029 was admittedly recovered from the petitioner's bank account in June 2006. The respondent-Department itself found the actual recoverable amount to be only Rs. 8,58,465. Therefore, an amount of Rs. 44,06,564 stood refundable from the amount recovered in June 2006. The Court found no quarrel from either side regarding this finding. The Court decided to dispose of the writ petition by remanding the matter back to the Assessing Officer to recalculate the entire accounts in terms of the observations made, specifically regarding the amount refundable to the petitioners and the interest payable thereon at 0.5% from 01.06.2006. The calculated amount is to be adjusted against any outstanding dues of the petitioner, including the amount payable for Assessment Year 2003-04, which was admitted to be Rs. 8,58,465. This exercise is to be completed within six weeks.
What were the facts?
The petitioners, UTI Bank Ltd. and its authorized signatories, filed a writ petition challenging an order dated 31.03.2006 passed by the Assistant Commissioner of Income Tax (ACIT) under Sections 201(1), 201(1A), 194J, and 195 of the Income Tax Act, 1961, along with a notice dated 11.05.2006 for attachment of a bank account. They also sought the return of Rs. 52,65,029 allegedly recovered illegally. Pending the petition, the ACIT passed an order on 10.03.2017 under Sections 201(1), 201(1A), and 254 of the Act, determining the petitioner's liability at Rs. 8,58,465. The department had already recovered Rs. 52,65,029 and, after adjustment, Rs. 44,06,564 was refundable. Subsequent recalculations by the department led to varying refund amounts, with an outstanding demand of Rs. 4,12,24,180, which was later found to be based on an erroneous calculation of Rs. 29,54,369 for Assessment Year 2003-04, the correct admitted amount being Rs. 8,58,465.
What were the issues?
1. Whether the writ petition is maintainable in light of the subsequent orders and recalculations by the Income Tax Department concerning the disputed tax demand and refund. Assessee's Contention: The petitioners initially challenged the order and attachment, seeking the return of Rs. 52,65,029. The core of their grievance is the recovery of an amount that was later found to be largely refundable, and the subsequent delays and recalculations in settling the matter. They rely on the fact that the admitted recoverable amount is significantly less than what was initially recovered. Revenue's Contention: The revenue, through its learned Senior Standing Counsel, has been involved in passing various orders and recalculations. While not explicitly stated as a formal argument, their actions reflect an attempt to determine the correct tax liability and refund, albeit with several modifications and rectifications.
Which sections of the Income-tax Act were involved?
Section 201(1),Section 201(1A),Section 194J,Section 195,Section 254,Section 226
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
The Court made the following ORDER t
'.,/ THE HONOT]RABLE SzuJUSTICE P'SAM KOSHY ANT) THE HoNoI,RABLE snirusrrcn' NARSING RAo NANDTKONDA WRIT P ON No E,'IITI .168910F 2006 ORDER, (Ptr Hon Heard Mr' record. 5lt Sri .ltistic,: P \o, K^r,-r7 C.V. Narasimham' leame<l counsel tbr the 2 petitioners and Ms' B' Sapna Reddy' ieamed Senior Standing Counsel for Income -l'ax De1:a$tucnt' appear lg for resPondcnts Pcrused thc Initialty, the presenl writ petition wirs filed chaltenging the rmpugnecl order dated 3l'03'200b passetl by respondent No l undel bank account. Sections 201(t) and 20i(iAl read vrith Sectiorr tg(ic' 194J and I95 of the lncome Tax Act, 1961 (for short'the Act') ar-rd also clttashment of Notice clated i l'05'2006 issLred by respotident No 1 uhdei Scctiorr 216 (3)o l- the Act itt respcct of tire dispuiecl tar' 'l hc l'etitioners had also sought for relief of retutn of au amoutrt oi Rs'52'(15'029i- allegedly to have bccn recovered illegalty from the petitioneL's [-iTl
Pending the petition' respo'rdent No'3 had passed an order on 10.03.2017 under Scctions 201(l) and 201(lA) read with Section 254 of the Act. holding that the amount payable by thc petitioner in fact --_'--------7
- \-- was Rs.g,-59,4651_ and nor Rs.52,6i,029/_ as was earlier. The Department' meanwhile had already recovered the aforementioned amount o1. Rs.52.65,02 9/_ and after ad.f usting the amount of Rs.8.58.465,-, rhe anrounr would corne ro Rs.44,06.564l_. The said .amount ou3hr to had becn eirher \refunded to the petitioner or ought to had been adiusted against an-r of the dues pending against the petitioner lbr the subsequent years. The writ petition now stands confined onlv on the said claim of the pctitioner. Meanwhile, the respondents had nor.v again come up r.r,ith the recalculation done as would bc evident liorn the Rectificarion order dated l2.Ol.2[1g, wherein the Departnrent has again passed an order calculating the total amount relundable cornirrg to Rs.gq.j0.549l_. i.e.. an amount of Rs.52,65.029L which rvas earlier recor,er.,J und i)rt.r.rt on the said amount (4) 0 5% for thc period of, I40 months from July 2006 to January. 201t8. Subsequenth,. there u.as _\.et another rdcalculation made by the l)epartnrent and wherein the [)epartment has reached to the conclusion that the refund arnount payable to the petitioner comes to Rs. I ,01 .87.113 I /-. whereas. there is an ourstanding demand against the petitioner cf an amounr ol Rs.4.12.24.1g0l_. The calculation of Rs.4,42.24.780/- is on the basis of the outsranding demand shown as Rs.29,54,369/- that u,as saicl to bc the oulslanding amount fbr the -1,.F /' I SA
3 Assessment Year 200i-04' This amount of Rs'29'54'369/- again was found to be an eroneous calculation for the reason that the actual amount admine<1ly comes tQ only Rs'8'58'4651 instead of Rs.29,54,369i- \
Considering the various orders and the subsequent rectilication and modilication orders passed' what is clearty reflected lrom the documents is that admitledty' an amount of Rs'52'65'029/- was recovered from the bank account of the petitioner way back in June' 2006. Irrom the saitl amount' the actual amount recoverable from the petitioner was tbund to be onry Rs.g,5g,465r as per the respondent- Department itselt" Thus' an amount of Rs'44'06'5641 stood refundable to the petitioner liom the amount that was recovered in June, 2006 It is this amount on which interest has to b; paid to the petitioners @ O'5%,stafiing tiom 0l'06'2006 onwards arid whatever the amount comes to' that amount needs to be adjusted against any of the outstanding anlount tying against the petitioner if any' So far as the said hnding is concerned' there does not seem to be any quarrel on either side i.e., by the learned counsel for the petitioner as also by the leamecl Standing Counsel lor Income Tax Department' \ \\ I
\ Officer. r.r,ho in tum shall se of the writ the Assessing recalculate the r.vhole accounts of fhe rn ferms of the obsen,ations nrade in the preceding I due and that was the previous paragraphs so far as the an was re ru n d a b r e ro rhe r ";::t :' " t,n i,,t ]li..l r^ r'
In view of the abor petition at this junctur" ."'* " are inclined to dispo mining the mafier back to petitioners ch Gl amount payable after adjusting the dues payable fur the Assessment y ear 2003_04, an aniounr of Rs.g.5g,465l_. Let lnlerest also be calculated on the said anrount and suitable adjustments tre made on the outstanding dues ol thc petitioner. Let this whole e::ercise be completed within an outer_ lirnit of six (06) weeks lronr tlre date of receipt of a cop_r ol.r h is order.
The Writ petition. accordingh.. stands dislrosed of. There shall be no order as to costs. ConseqLrentlv. miscellaneous petrrrons pending. ifhny, shall stand closed S l.e ., To //' SWAMY ISTRAR SECTION OFFICER Hyderabad, Ayakar
The Assistant CommiSsioner of Income Tax, Circle (2), Bhavan, Basheerbagh, Hyderabad-500 004
The Assistant Commissioner of lncome Tax, Range-15, Hyderabad, Ayakar Bhavan, Basheerbagh, Hyderabad-500 004
The Assistant Commissioner of lncome Tax, TDS Circle - 2(1), HYderabad lncome Tax Tower A.C. Guards Masab Tank HYderabad 500004
The DePutY Commissioner of lnCome Tax, TDS Circle 2(1 ) Hyderabad lncome lax I ower A.u Guards Masab Tank HYderabad 500004. The Commissioner of Income Tax, TDS HYderabad lnco me Tax Tower A C Guards Masab Tank HYderabad 500004 Q6 7 One CC to SRI C.V.NARAStMHAlrr'l, Advocate [OPUC] One CC to Ms, B.SAPNA REDDY, LEARNED SENIOR STANDING COUNSEL FOR INCOME T E SA
Two CD CoPies AX DEPARTMENT. Advocate IOPUCI
HIGH COURT DATED:26 tO6t2OZs ORDER WP.No.16891 of 2006 DISPOSING OF THE W.P WITHOUT COSTS. i; 16 StP 206 \. '\l ' .;o., .. :i t. '.i--..--.--',.: ,;-7 r'rR illf S k \ ,i \'l a ,-. , / Ir-; \ i4 ) \ 6' i
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