1 week ago
₹5.31 lakh ITAT Delhi refund allowed despite missing original return
A taxpayer had not filed an income tax return on time for 2019-20.
Later, the tax department asked the taxpayer to file a return because it had information about large transactions.
The taxpayer filed the return and showed no taxable income.
The taxpayer also said that ₹5,31,680 had already been deducted as tax and should be returned.
Tax officials refused because the refund was requested for the first time in this later return.
The taxpayer appealed to the Income Tax Appellate Tribunal in Delhi.
The tribunal said the law gives people a refund when they paid more tax than they owed.
It ordered the department to return the money with interest.
The tribunal also said there was no specific rule blocking a refund simply because the return followed a Section 148 notice.
A taxpayer claimed a ₹5,31,680 TDS refund in a return filed after receiving a Section 148 notice.
The taxpayer had not filed an original return for assessment year 2019-20 by the due date.
The Assessing Officer and CIT(A) rejected the refund because it was not claimed in a Section 139 return.
ITAT Delhi held that Section 237 creates a substantive refund right when taxes paid exceed the amount legally chargeable.
The tribunal ordered the refund with statutory interest, finding nil taxable income and no specific ban on such claims.
- Who
- A taxpayer from Jor Bagh, New Delhi, and the Income Tax Department; the appeal was decided by ITAT Delhi.
- What
- ITAT Delhi ordered a ₹5,31,680 TDS refund with statutory interest.
- Where
- The case was decided by ITAT Delhi and involved a taxpayer from Jor Bagh, New Delhi.
- When
- The notice was issued on 27 March 2023, and the tribunal heard the appeal on 11 August 2026.
- Why
- The tribunal found that the taxpayer's reassessment resulted in nil taxable income, so the TDS collected exceeded the tax legally chargeable.
Taxpayer and tribunal position
Tax department position
Eligibility for refund
Taxpayer and tribunal position
The taxpayer argued, and ITAT Delhi held, that Section 237 provides a substantive right to a refund when tax paid or collected exceeds the amount properly chargeable.
Tax department position
The Assessing Officer and Commissioner of Income Tax (Appeals) said the refund could not be claimed because the taxpayer had not filed an original return under Section 139.
Effect of a Section 148 return
Taxpayer and tribunal position
The tribunal found no statutory provision specifically prohibiting a refund merely because the return was filed in response to a Section 148 notice.
Tax department position
The CIT(A), relying principally on the Bombay High Court decision in K. Sudhakar S. Shanbhag and the Supreme Court's ruling in Sun Engineering Works Pvt. Ltd., viewed reassessment proceedings as unable to create a new refund right.
Application of precedent
Taxpayer and tribunal position
ITAT Delhi distinguished Sun Engineering Works, saying this refund arose directly from the reassessment's finding of nil taxable income rather than from a new deduction or unrelated issue.
Tax department position
The tax authorities relied on precedent to argue that reassessment proceedings should not be used to introduce a new claim benefiting the taxpayer.
Key facts
- Assessment year
- 2019-20
- Refund amount
- ₹5,31,680
- Tax claimed
- Tax deducted at source (TDS)
- Return filed after
- A notice under Section 148
- Declared business loss
- ₹1.38 crore
- Result of reassessment
- Nil taxable income
- Tribunal direction
- Issue the refund with statutory interest admissible under law
Sources
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