Hansa Agencies Pvt L... v. The Commissioner Of ...

H.N Seth, C.J:— Income-tax assessments of petitioner Messrs Hansa Agencies Private Ltd., Jalandhar, for the assessment years 1979–1980 and 1981–1982 were completed on 31st July, 1982, and 26th May, 1984, respectively. Eventually, the assessment for the year 1979–1980 was annulled by the Income-tax Appellate Tribunal vide its order dated 6th May, 1985 and that for the assessment year 1981–1982 was annulled by the Commissioner of Income-tax vide his order dated 31st May, 1985. Dissatisfied the Revenue questioned the validity of the order of the Income-tax Appellate Tribunal annulling the assessment for the year 1979–1980 by means of a reference under section 256(1) of the Income-tax Act, which proceedings are pending before the High Court. It has also questioned the validity of the order of the Commissioner of Income-tax annulling the petitioner's assessment for the assessment year 1981-1982 by means of an appeal, which is pending before the Income-tax Appellate Tribunal.

2. As a result of the annulment of the assessments, the petitioner under section 240 of the Income-tax Act become entitled to the refund of the Income-tax paid by it for the assessment years 1979–1980 and 1981–1982. The petitioner vide its application dated 4th August, 1985, made a claim before the assessing authority for the refund of the income-tax deposited by it for the two assessment years. According to the petitioner, the assessing authority informed it that the said refund had, with the prior approval of the Commissioner of Income-tax been withhold by it under section 241 of the Income-tax Act. Aggrieved, the petitioner has approached this Court for relief under Article 226 of the Constitution.

3. This petition was heard along with Writ Petition No. 4370 of 1986 (Leader Valves Private Ltd., Jalandhar v. Commissioner of Income-tax . Writ Petition No. 4378 of 1986.). Even though the respondents did not file any return in the case, Shri Ashok Bhan, learned counsel for the respondents stated before us that, as in the case of Leader Valves Private Ltd. (Writ Petition No. 4378 of 1986), in this case also the assessing authority has withheld the refund merely for the reason that the order of the Income-tax Appellate Tribunal annulling the petitioner's assessment for the year 1979–1980 and that made by the Commissioner of Income-tax in respect of the petitioner's assessment for the year 1981–1982 are erroneous and the proceedings initiated by the Department for questioning the correctness of the two orders are still pending before the High Court and the Income-tax Appellate Tribunal.

4. For the reasons given by us in over judgment in Writ Petition No. 4378 of 1986 (Leader Valves Private Ltd., Jalandhar v. Commissioner of Income-tax) rendered today, we are of the opinion that the assessing authority is not justified in withholding the refund which had become due to the petitioner as a result of the annulment of the assessments merely for the reason that the proceedings in questioning the validity of the two orders annulling the assessments for the years 1979–1980 and 1981–1982 are pending before appropriate authorities. The petition, therefore, succeeds and is allowed and the respondents are directed not to withhold the refund of the income-tax which has become due to the petitioner as a result of the annulment of its assessments for the years 1979–1980 and 1981–1982 on the ground that the proceedings questioning the validity of the two orders annulling the assessments are pending before the High Court and the Income-tax Appellate Tribunal.

Sd/- M.S Liberhan, J.

R.M.S

Petition allowed.