AROON K. BASAK VS UNION OF INDIA, 2000 PTD-DELHI-HIGH-COURT-INDIA 2541 (1998)

Income-tax---

----Refund--Deduction of tax at source---Assessment barred by time-- Assessee claiming refund of tax deducted at source after deducting from TDS the amount of tax legitimately payable by assessee---Justified---Indian Income Tax Act, 1961.

The assessee was appointed Director-General of the Associated Chamber of Commerce and Industry of India. He was paid an ex gratia amount of Rs.5,50,000 by his employer who deducted Rs.3,29,501 on account of income-tax at source. The assessee claimed that out of the above amount an amount of Rs.2.88 lakhs was due and payable to the assessee as the remaining amount related to tax which was legitimately payable by the assessee. The assessee claimed refund of the amount of Rs.2.88 lakhs as the assessment had become barred by limitation on March 31, 1994, and no demand on account of Income-tax had been created against him. On a writ petition, the Department contended that they were still prepared to make an assessment where after refund, if any, may be quantified:

Held, that inasmuch as the assessment had already become barred by time the amount claimed, namely, Rs.2.88 lakhs, was liable to be refunded to the assessee alongwith interest statutorily payable.

Kumkum Sen for Petitioner.

Ms. Geetanjali Bhushan for Respondent No. 1.

R. D. Jolly and Ms. Preinlata Barisal for Respondents Nos.2 to 4

JUDGMENT

Heard finally.

Rule D.B.

The petitioner, a chartered accountant by profession, was appointed Director-General of Association, New Delhi---Respondent No.4, for a term of five years. The petitioner left the service with effect from November 30, 1988. The petitioner was paid an ex gratia amount of Rs.5,50,000 by his employer. On this amount as also on a few other payments made to the petitioner the employer had deducted an amount of Rs.304,953 and a further amount of Rs.24,548 on account of income-tax by way of TDS and deposited the same with the Reserve Bank of India, New Delhi, vide income-tax deduction certificate (Annexure-A). There is some controversy whether a return of income-tax is filed or not before the appropriate Assessing Officer. The fact remains that the assessment has gone barred by time on March 31, 1994, by reference to section 153 of the Income-tax Act. Inasmuch as no demand on account of income-tax has been created against the petitioner, the amount of TDS is liable to be refunded to the petitioner.

It is submitted by learned counsel for the petitioner and as has been set out in the petition itself that out of the amount of tax so deducted, an amount of Rs.2.88 lakhs is only due and payable to the petitioner as the remaining amount relates to tax which was legitimately payable by the petitioner. As to these figures as such there is no dispute.

The prayer for refund was contested on behalf of the respondents solely on the ground that the respondents are still prepared to make an assessment, whereafter the refund, if any, may be quantified. However, there is no justification behind such defence. Inasmuch as the assessment has already gone barred by time, in our opinion, the amount claimed by the petitioner is liable to be refunded to him.

It is directed that the amount of Rs.2.88. lakhs shall be refunded to the petitioner within a period of one month from today along with interest statutorily payable to the petitioner under section 244A of the Income-tax Act, 1961.

The petition be treated as disposed of accordingly.

Dasti to both the parties.

M.B.A./4179/FC`Order accordingly.