Law:

Section:

Section 240 of the Income-tax Act, 1961 - Refunds - On appeal, etc. (Invalid return) - Assessment year 1992-93 - Assessee filed his return and paid tax plus interest on total admitted tax - Therafter, assessee filed revised return and paid a sum of Rs.2.75 lakhs including interest as admitted tax - Declaration of income furnished by assessee under revised return was declared to be invalid, hence, assessee claimed refund of tax and interest paid on revised return under section 240 - Whether on examination of proviso (b) to section 240, it is axiomatic that 'return' contemplated in said section has to be a valid return - Held, yes - Whether since tax and interest amount offered by assessee was based on an invalid return, and that return itself was non est in eye of law, then there was no basis for authorities to withhold said tax collected - Held, yes - Whether thus authorities were to refund said amount considering original return as return furnished and amount whatever was paid in excess under original return had to be refunded subsequent to annulment of assessment by authorities - Held, yes [Paras 19, 24 & 26] [In favour of assessee] FACTS â–  The assessee filed his return on 31-8-1992 declaring total income of Rs. 57,810 and paid tax at Rs. 9,216 plus interest of Rs. 302. â–  Therafter, the assessee filed revised return on 30-12-1993 and paid a sum of Rs.2.75 lakhs including interest as admitted tax subsequent to the department detecting the said transaction which was not declared in the original return. â–  The Assessing Officer, considering the said revised return filed by the assessee, framed the assessment under section 143. â–  On appeal, the Commissioner (Appeals) held that a revised return filed by the assessee under section 139(5) subsequent to the discovery of the said undisclosed income by the Income-tax department cannot be treated as a valid return under section 139(5) and, accordingly, allowed the appeal directing the Assessing Officer to proceed with section 148. â–  On further appeal, the Tribunal confirmed said order and held that the revised return filed by the assessee on 30-12-1993 is an invalid return,…