FADA TRADING PRIVATE LIMITED vs. INCOME TAX WARD 9(1), DELHI & ORS.

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W.P.(C)/12044/2023HC DelhiDLHC01036083202313 September 2023Bench: HON'BLE MR. JUSTICE RAJIV SHAKDHER,HON'BLE MR. JUSTICE GIRISH KATHPALIA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition with a direction to the Central Board of Direct Taxes (CBDT) to examine the three alternatives presented by the petitioner: refund of Rs. 40,00,000/-, condonation of delay and permission to file a revised return, or adjustment of the deposit against another AY. The CBDT is to take a decision on the best way forward, pass a reasoned order, communicate it to the petitioner, and hear the petitioner's authorized representative before making any decision. The CBDT is requested to act expeditiously, within ten weeks from the receipt of the order. The court did not decide on the merits of the petitioner's claims but directed the appropriate authority to consider them.

What were the facts?

The petitioner, FADA TRADING PRIVATE LIMITED, inadvertently deposited Rs. 40,00,000/- (in two tranches of Rs. 10,00,000/- and Rs. 30,00,000/-) towards self-assessment tax for Assessment Year (AY) 2019-20, instead of AY 2020-21. The petitioner states it had no tax liability for AY 2019-20 as it incurred losses. The Assessing Officer (AO) corrected the error in the revenue's records to reflect the deposit against AY 2020-21. Subsequently, the petitioner applied to the Principal Chief Commissioner of Income Tax for condonation of delay in filing a revised return to claim a refund. The lack of progress on this application led the petitioner to file the present writ petition.

What were the issues?

1. Whether the petitioner is entitled to a refund of Rs. 40,00,000/-, or permission to file a revised return, or to adjust the deposit against another AY, given the inadvertent error in challan filling? Assessee's Contentions: The petitioner argues that the deposit was made erroneously for AY 2019-20, for which no tax was due. They propose three possible remedies: (i) refund of Rs. 40,00,000/-, (ii) condonation of delay and permission to file a revised return, or (iii) adjustment of the deposit against another AY. The petitioner relies on the fact that the AO corrected the initial error in the records. Revenue's Contentions: The revenue, through its counsel, accepted notice and stated it would argue the matter based on the available record, without filing a counter-affidavit, given the proposed directions.

AI-generated summary — verify with the full judgment below

W.P.(C) 12044/2023

Page 1 of 3

$~47 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of Decision:13.09.2023 + W.P.(C) 12044/2023

FADA TRADING PRIVATE LIMITED

..... Petitioner Through: Mr. Ruchesh Sinha, Mr. Keshav Tril and Ms. Nivedita Jha, Advocates.

versus

INCOME TAX WARD 9(1), DELHI & ORS. ..... Respondents Through: Mr. Kunal Sharma, Jr. Standing Counsel with Ms. Zehra Khan, Mr.Shubhendu Bhattacharya and Ms. Mohini, Advocates.

CORAM:

HON'BLE MR. JUSTICE RAJIV SHAKDHER

HON'BLE MR. JUSTICE GIRISH KATHPALIA

[Physical Hearing/Hybrid Hearing (as per request)]

RAJIV SHAKDHER, J. (ORAL): C.M. No. 47214/2023 1. Allowed, subject to the petitioner filing legible copies of the annexures, at least three days before the next date of hearing. W.P.(C) 12044/2023 2. Issue Notice. 2.1. Mr. Kunal Sharma, learned senior standing counsel, accepts notice on behalf of the respondents/revenue. 3. Given the directions that we propose to pass, Mr. Sharma says that the counter-affidavit need not be filed and he will argue the matter based on the record available presently with the court. Digitally Signed By:VAISHALI CHAUHAN Signing Date:21.09.2023 18:11:22 Signature Not Verified

W.P.(C) 12044/2023

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4.

With the consent of the counsels for the parties, the writ petition is taken up for final hearing and disposal at this stage itself. 5. The principal grievance of the petitioner is that Rs. 40,00,000/- deposited by it (albeit, in two tranches) towards tax was inadvertently captured against under Assessment Year (AY) 2019-20 instead of AY 2020- 21. 5.1 In other words, the petitioner concedes that a mistake was made in filling up the two challans which accompanied the deposit of the self- assessment tax. 5.2 The two tranches in which the self-assessment tax was deposited were Rs.10,00,000/- and Rs. 30,00,000/-. 6. It is also the petitioner’s case that there was no requirement to make a deposit towards the self-assessment tax in AY 2019-20, since it had suffered losses in the relevant period. 7. It appears, at the request of the petitioner, the Assessing Officer (AO) corrected the error in the records of the respondents/revenue and had the deposit made toward self-assessment reflected against AY 2020-21. 8. This step having been taken, the petitioner moved Principal Chief Commissioner of Income Tax for condoning the delay in filing the revised return, so that it could claim refund due to it. 8.1 It is the lack of movement qua this application which has propelled the petitioner to take recourse to the instant writ action. 9. Mr. Ruchesh Sinha, who appears on behalf of the petitioner, says that the respondents/revenue could deal with the petitioner’s requests in one of three ways: (i) First, refund Rs. 40,00,000/- to the petitioner. Digitally Signed By:VAISHALI CHAUHAN Signing Date:21.09.2023 18:11:22 Signature Not Verified

W.P.(C) 12044/2023

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(ii) Secondly, condone the delay and permit the petitioner to file a revised return. (iii) Thirdly, allow the petitioner to adjust Rs. 40,00,000/- deposited by the petitioner for against another AY. 10. Mr Sharma says that the three alternatives referred to above could be examined by the CBDT and appropriate orders would thereafter be passed. 11. Thus, having regard to what is put forth by the learned counsels for the parties before us, the writ petition is disposed of with a direction to the CBDT to examine the three alternatives placed before us by the petitioner. 11.1 The CBDT will, thereafter, take a decision as to what would be the best way forward. The CBDT is requested to pass a reasoned order and have the same communicated to the petitioner. 11.2 Needless to add, before any decision is taken, the CBDT will hear the authorized representative of the petitioner, in that behalf. 12. Since the issue has been hanging fire for nearly one year, the CBDT is requested to take a decision in this matter as expeditiously as possible though not later than ten (10) weeks from the date of receipt of a copy of the order passed today. 13. Parties will act based on the digitally signed copy of the order.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J SEPTEMBER 13, 2023/ MS

Click here to check corrigendum, if any Digitally Signed By:VAISHALI CHAUHAN Signing Date:21.09.2023 18:11:22 Signature Not Verified

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