Devdas Rama Mangalore vs. CIT 26 [2014] 41 taxmann.com 508 (Mumbai)

Section 119 – Revised return of income to be considered as application for condonation which consequently results in refund of legitimate tax

Devdas Rama Mangalore vs. CIT 26 [2014] 41 taxmann.com 508 (Mumbai)

The petition was filed by a Senior Citizen challenging the order passed by the Assessing Officer by dismissing the application for condonation of delay under section 119(2)(b) of the Income-tax Act, 1961 ("the Act") for claiming refund of tax paid. This application was filed by the petitioner seeking refund of tax deducted at source (TDS) by Reserve Bank of India (RBI) on the payment made to him in the year 2004 when he opted for the Optional Early Retirement Scheme (Scheme). The RBI while making the payment to the petitioner under the Scheme had deducted as tax at source an amount of 

Rs. 1,64,117/-. However, in his return of income for assessment year 2004-05 filed on 15th October, 2004 the petitioner did not claim any refund of tax as TDS paid by RBI on his behalf nor was the credit on tax utilised to discharge tax payable on any other income. Being aware of the CBDT Cir dated 8-5-2009 and in view of Apex Court decision in the case of Chandra Ranganathan and Ors. vs. Commissioner of Income Tax 326 ITR 49 held that the amounts received by retiring employees of Reserve Bank of India opting for the scheme are eligible for exemption under section 10(10C) of the Act. In view of the above the petitioner filed a revised return of income on 8th September 2011 claiming benefit of exemption available to the Scheme under section 10(10C) of the Act which consequently would result in refund of Rs. 1.64 lakhs paid by RBI as TDS. However, there was no response to the above revised return of income from the respondent-revenue. Further the Peitioner filed an application with the Commissioner of Income Tax under section 119(2)(b) of the Act seeking condonation of delay in filing his application for refund in the form of revised return of income for assessment year 2004-05. The respondent revenue by the impugned order dismissed the application under section 119(2)(b) of the Act on the ground that in view of Instruction No. 13 of 2006 dated 22 December, 2006 by the CBDT an application claiming refund cannot be entertained if the same is filed beyond the period of 6 years from the end of the assessment year from which the application is made. By filing a Writ Petition in High Court, the Hon’ble court allowed the Writ Petition and held that the application under section 119(2)(b) of the Act was being denied by adopting a very hyper technical view that the application for condonation of delay was made beyond 6 years from the date of the end of the assessment year
2004-05. The court also held that the revised return of income which was filed on 8th September, 2011 should itself be considered as an application for condonation
of delay under section 119(2)(b) of the Act and the refund was granted to the Petitioner.