Income Tax Ordinance (XXXI of 1979)---

----S. 102(1)---Refund---Responsibility of Department to make refund within prescribed time---Delayed refund---Compensation---Provision of S.102(1) dots not require the making of an application or request as a condition for payment of the amount of income-tax found to be refundable---Payment Of compensation by department in case of delayed payment.

Section 102(1) of the Ordinance XXXI of 1979 does not required the making of an application or request as a condition for payment of the amount of income-tax found to be refundable. The provision places a responsibility on the department to make payment of the amount found to be due as a refund within three months of the date on which the refund becomes due and, if there is a failure on the part of the department in the payment of the amount within the aforesaid prescribed period, compensation at rate of 15 per cent per annum of the amount of refund becomes payable as additional payment for delayed refund.

Jawaid A. Siddiqui for Petitioner.

Shaikh Haider for Respondents.

Date of hearing: 14th November, 1991.

JUDGMENT

NASIR ASLAM ZAHID, J.---The petitioner is the widow of Hasan Mirza, an income-tax assessee who died on 28-4-1990. Prior to his demise, by letter dated 29-6-1989, of the concerned Income-tax Officer (respondent No.1), deceased Hasan Mirza was informed that a sum of Rs.3,51,082 was refundable to him for the assessment year 1981-82. The case of the petitioner is that during his lifetime, the deceased, and after his death, the petitioner, has been requesting the Income-tax Department to make payment of the aforesaid amount but the department has failed to do so. In the circumstances, the petitioner (the widow) filed this Constitutional petition, inter alia, seeking the payment of the aforesaid amount with compensation. In the counter-affidavit filed by respondent No.l it has not been denied that the aforesaid amount was due to the deceased as refund of income-tax but the plea that has been taken it that without the production of a succession certificate the department could not make payment of the amount. We, therefore, find that there is no dispute about the amount which was refundable to the deceased and now to the person holding a succession certificate.

2. The other relief that has been claimed in this petition is about payment of compensation on account of delay in the payment of the refundable amount. Section 102 (1) of the Income-tax Ordinance, 1979, is as follows:--

"102. Additional payment for delayed refunds.--(1) Where a refund due, or deemed under subsection (5) of section 99 to be due, to an assessee is not paid within three months of the date on which it becomes due, there shall be paid to the assessee a further sum by way of compensation at the rate of 15 per cent per annum of the amount of refund from the expiration of the said three months up to the date on which the refund order is made."

3. In this case, the deceased was informed by letter, dated 29-6-1989 that, for the assessment year 1981-82, he was entitled to the refund of Rs.3,51,082. Under section 102(1) of the Income Tax Ordinance, this amount should have been paid to the deceased within three months i.e. by 29-9-1989. Although the case of the petitioner is that requests were made by the deceased as well as by her for payment of the aforesaid amount, in our view, section 102(1) of the Ordinance does not require the making of an application or request as a condition for payment of the amount of income-tax found to be refundable. The provision places a responsibility on the department to make payment of the amount found to be due as a refund within three months of the date on which the refund becomes due and, if there is a failure on the part, of the department in the payment of the amount within the aforesaid prescribed period, compensation at the rate of 15 per cent per annum of the amount of refund becomes payable as additional payment for delayed refund.

4. In this case, as observed earlier, three months period provided under section 102(1) of the Ordinance expired on 29-9-1989 and from that date the department became liable for payment of additional amount at the rate of 15 per cent of the amount refundable. However, the deceased died on 28-4-1990 and thereafter payment could not be made by the department either to the petitioner as widow or any other legal representative in the absence of a succession certificate issued by a competent Court. Admittedly, neither the petitioner nor any other legal heir of the deceased has so far obtained a succession certificate. In the circumstances of this case, we are of the view that apart from the sum of Rs.3,51,082 admittedly due as refund to the deceased, the department is also liable to make payment of an additional sum at the rate of 15 per cent per annum on the aforesaid amount from 30--9-1989 to 28-4-1990.

5. Mr. Jawaid Siddiqui, learned counsel for petitioner (widow), states that either the petitioner or some other legal heir of deceased Hasan Mirza will obtain a succession certificate for the amount in question. Mr. Shaik Haider states that the department is ready to make payment of the amount refundable as also the additional compensation for the aforesaid period. It is directed that the amount of Rs.3,51,082 plus compensation at the rate of 15 per cent per annum on the aforesaid amount for the period from 30-9-1989 to 2-4-1990 will be deposited by the Income-tax Department with the Nazir of 8 this Court within one month from today and, as soon as the said amount is deposited, the Nazir will invest the same in Special Savings Certificate. The amount so deposited with profits will be paid to the petitioner or other person obtaining succession certificate from a competent Court entitling him to recover such amount. This Constitutional petition stands disposed of in the above terms with no order as to costs.

M.BA./F-177/K?????????????????????????????????????????????????????????????????????????????????? Order accordingly.