M/S. SRI UMIYA AND CO. HYD. vs. I.T. OFFICER, HYD AND 2 OTHERS

t 348e 1 IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE TWELFTH DAY OF FEBRUARY TWO THOUSANDAND TWENW SIX THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATH! RAO WRIT N NO:5{72 oF 20lo M/s. Sri Um Hyderabad, rya & Co. 42-2311 , Opp K.G. Bus Depot, Patel Nagar, Moula-Ali, Pahher Dayalal Patel S/o.Parbat Patel. by its D 1. The lncome Tax Officer, Ward-11 (4), lncome Tax Towers, A.C. Guards' Hyderabad. 2. The lncome Tax fficer, Range-10 (3), lncome Tax Towers, A.C. Guards' Hyderabad. 3. Commissioner of lncome Tax, Hyderabad-V, lncome Tax Towers, A.C. Guards, Hyderabad. Petition under Article 226 ol the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a Writ, order or direction one in the nature of Mandamus in not refunding the amount of of the certificates by the Forest declaring the action of the Rs.44,1121- collected at source in terms Department under Form 27 D issued to the Respondents during the assessment year 2005-06 as arbitrary, illegal and consequently direct the Respondents to refund the said amount of Rs.44,1121- in the interests of justice. Counse! forthe Petitioner: SRI A.V.A SHIVA KARTHIKEYA Counsel for the Respondents: Ms.BOKARO SAPNA REDDY' SENIOR SC FOR INCOME TAX The Court made the following: ORDER

') IN THE HIGH COURT FOR THE STATE OF TELANGANA AT IIYDERABAD HONOURABLE SRIIUSTICE P.SAM KOSHY AND HON'IiLE SRI JUSTICE SUDDALACHALAPATHI RAO WRIT PETITION .s172oE20t0 DATE:\2-az.nze Between: M/s. Sri Umiya & Co., Rep.by its Partner Dayalal Patel, r/o. Patel Nagar, Moula-ali, Hyderabad. . . .. Petitioner And The Income Tax Officer, Ward-11(4), Itrcome Tax Towers, AC Guards, Llyderabad and two others. ORDER: (per Hon'hle Sri lustice Suddala Chalapathi Rao) The insl:ant writ petition has been filed declaring the action of the responderrts in not refunding the amount of 7 M'L12/ - collected at source in terms of the certificates issued by the Forest Department under Form-27D issued to the respondents during the assessment year 2005-06, as arbitrary, illegal and consequently, to direct the respondents to refund the said amount forthwith in the interest of justice and equity.

2 2. The brief facts of the case are that, the petitioner-M/s.Sri Umiya & Company, Hyderabad, is a dealer in timber and an assessee on the rolls of L't respondent for the assessment year 2005-06, the petitioner has filed return of income on 27.07.2005 admitting an income of t 9,935 / - td claimed a refund of { 3,300 / -. The Assessing Officer issued an intimation under Section 1a3(1) of the Income Tax Act, 1961 (for short, 'Act, 1961') on 29.1'1,.2005, determining the tax payable by the petitioner at { 335/-. The petitioner subsequently realized that during the assessment year in questiory a sum of < 44,112/- was collected at source as income tax from the petitioner by the Forest Department in terms of provisions of Section 206-C (L) of the Act, 196'1, and to inadvertence the claim was not made at the time of filing of ttte return. 3. Further, the petitioner alleged to have filed the representation dated 01.02.2002 enclosir,g the TCS certificates along with Form-27D issued by the Forest Departrnent rqquesting him to grant the refund after rectifying the earlier order under Section 154 of the Act, 1961. Further, as no action was initiated on requests made by the petitioner, the petitioner was advised by the 1't respondent that an application has to A{iude for cirndoning the delay in Form z7-D before the 3'd respondent-assessing authority and the petitioner filed

3 a .) the said application on 01.02.2008 narrating all these facts to direct the L"t to pey the refund by accepting Form-27D by condoning the delay. The 3,d respondent passed orders on 15.04.2008 rejecting the said represerrtation stating that the claim for refund of. 7 44,112/ - is supplementary in nature and the claim of refund of 1 M,112/ - is after completion of processing under Section 143(1) of the Act. 4. In the meanwhile, the file of the petitioner was from transferred to the Income Tax Officer, Range'10(3), Hyderabad i.e. 2"d respondent herein and in the said circumstances the petitioner alleged to have addressed one more representation to the 2"d respondent herrein requesting him to do the needful and grant the refund. Since there was no response from the 2d respondent also, the petitioner add;:essed further representation on 1.0.@.2009 to the 3,4 respondent herein and sought a direction from him to the Assessing Officer to pass appropriate orders in the petition filed under Section 154 for rectification which has been kept pendrng by seeking an opportunity of hearing, but however, the 3rd resPondent oide hts order dated 26.L1,.2009 reiected the said application of the petitioner by stating that, to pass an order under Section L54, the intimation under Section la3(1), dated 29.11.2005, is not corning under the purview of orclers, as such, no instruction can be issued to an

4 Assessing officer except under Section 264 of the Act. The said rejection along with non-granting refund claim is assailed in this writ petition. 5. The learned counsel appearing'for the petitioner contends that, under the provisions of sectio nlls4,the Assessing Authority has got power for correction of the Assessment Orders even after issuance of the notice of intimation under section 143 (1) of the Act,l96'1. and the 3'd respondent being a superior authority has every authority to direct the 2"d respondent to act upon the. application of the petitioner for refund vide his applications dated 01,.02.2007 and,10.09.200g by considering the delay application filed along with Form-27D. Further, the learned counsel for the petitioner has also placed reliance in a circular issued aide No.1.4 (XL-35) dated 11.04.1955, wherein the specific instructions were issued in the form of guidelines for the Income Tax Officers on matters pertaining to refund claims by the CBDT. Whereiru the Board has categorically instructed that though specific instructions have been issued from time to time in regard to the attitude of the officers of the Department should adopt in dealing with the assessees in matters affecting their interests. [t was stated that the said instructions were not followed uniformly and thereupon, pursuant to which certain complaints were / i -'4

5 they are prc,mpt in making assessments likely to result into dernands also issued against the income tax officers complaining that though in effecting recovery, but however they are lethargic and indifferent in granting refunds for giving relief due to the assesses under the Act. Vide the said circular, the Board has categorically directed the assessing aulhorities to act upon the refund claims promptly 6- The leerrned counsel also referred to a judgment of thg High Court for the State of Kerala in the case of Parekh Brothers vs. CfIa, the Hon'ble l{igh Court directed the assessing authorities to bear in mind the spirit of the said circular in affording relief to the assessee, as indicated therein, and at least when the matter is brought to their notice, withorrt raising technical objections, the matter should be resolved. That the said circular was also reiterated by the Honjble High Court ol Bombay in the case of Dattatraya Gopal Shette vs. CIfi wherein the High Court of Bombay directed the authorities must carry out their duties in the light of the said circular. The learned counsel contends that though there was a delay in filing the refund claim, however, an application to condone the delay along with Form-27D was also filed before the Assessing Authority and the 1 (1%4) 150 ITR 105 (K,rr) ' lrsae; rso rrn t6o (Bom)

6 authorities to consider the application and refund the claim. It is I I 3.d respondent though vested with authority has failed to direct the urged that the respondent Nos.L to 3 cannot defeat the legitimate claim of the petitioner on flimsy grounds, more so, when the circular and the judgments of the Hon'ble High Courts are binding on the Assessing Authorities. 7. Per contra, Ms. B.Sapna Reddy, learned Senior Standing Counse[ for lncome Tax Department appearing for the respondents would contend that the application is filed at belated stage and that without enclosing the Form-z7D, which is mandatory and that #ter issuance of Section 143(1), the said application for refund claim was made and the 3.d respondent has rightly rejected in refusing to direct the assessing authorities to act upon the said representation of the petitioner fcir refund claim. 8. We have heard Mr. A.V.A. Shiva Karthikeya, learned counsel for the petitioner and Ms. B.Sapna Reddy, learned Senior Standing Counsel for respondents and having given earnest consideration to their submissions, perused the material on record. 9. -Evidently, the circular dated 11.04.1955 along with the judgments in Parekh Brbthers (supra) and Dattatreya Gopal Shetty

7 (supra), the High Courts of Kerala and Bombay respectively, categorically directed the assessing authorities to take appropriate steps on ther respective refund applications by considering them promptly without raising any technicalities. In that view of the matter, the petitioner has already filed an application for refund of the said clainr as early as 01'.02.2007 by enclosing the TCS certificates for grant of refund amount of - M,172/'along with the application for condonation of delay under Form-27D and although the said intimation under Section 143 (1) dated 29.1L.2005 categorically show that the intirrration notice under Section 1a3(1) is an order, the 3d respondent trcing superior authority and appellate authority vested with power urrder Section264 of the Act, ought to have directed the assessing authorities to act upon the representations of the petitioner for refund of the claim dated 01.02.2007 and 10.09.2008. 10. petitioner has :nade out a case for interference by this Court and the proceedings ol'the 3.d respondent dated 26.11.2009 are hereby set aside and tlre 2"d respondent, who is the present Assessing Authority of the petitioner, is directed to consider the claim of the petitioner for refund of the arnount of I 44,1.12/- in pursuance of the application of It In that view of the matter, in our considered view, the the petitioner dated 01.02.2007 and 10.09.2008 filed along with

8 application to condone the detay and Form- 2ZD byverifying the TCS : certificates issued by the Forest Department. 11. However, as much time elapsed since the non-consideration of the refund of the amount, in view of the pendency of the writ petition before this Court since 20'1,0, keeping into the circumstances on hand, w€ make it clear that the petitioner is only entitled to the principal sum of t 44,112/- without there being any further interest on the said amount. 12. with the above directions, the Writ Petition is disposed of. There shall be no order as to costs. Pending miscellaneous applications if any shall stand closed. ,/TRUE COPY'/ SECTION OFFICER \ To, The lncome Tax Officer, Ward-11 (4), lncome Tax Hyderabad. 2.ThelncomeTaxofficer'Range.1o(3),lncomeTax Towers, A.C. Guards, Hyderabad. 3. The commissioner of lncome Tax, Hyderabad-V, lncome Tax Towers' A'C' Guards, HYderabad. 4.oneCCtoSRlA.V.ASH|VAKARTHIKEYA,AdvocatetoPucl 5. ONC CC tO SRI BOKARO SAPNA REDDY' SENIOR SC FOR INCOME TAX loPucl 6. Two CD CoPies A.C. Guards, 1. t ANT BS

/ / HIGH COURT DATED.l'2to2l,2026 ORDER WP.No.51',fZ of 2O1 X{*' ,icG $ 2 3 tlfiB Iil:; ,) * .-) TJ * g*lk+.r DISPOSING OF THE WRIT PETITION WITHOUT COSTS I