Law: Income Tax Act, 1961

Section: 140,240

Income-tax----Refund---Section 240 would apply only where refund becomes due as a result of an order passed in appeal or other proceeding under Indian Income-­tax Act---Return filed and tax paid by assessee---No order of assessment within period of limitation---No claim by assessee that tax had been paid in excess---Amount paid as tax could not be refunded---Indian Income Tax Act, 1961, Ss, 140A & 240. Under section 240 of the Income Tax Act, 1961, the liability for refund of any amount which becomes due to the assessee must be in consequence of any order passed in appeal or other proceeding under the Act. The tax payable on the basis of the returns filed by the assessee is treated as "assessed tax". It is not at all made dependent on any regular assessment being made, though in the event of regular assessment, the amount paid under subsection (1) of section 140A is deemed to have been paid towards the regular assessment. Therefore, by no stretch of imagination, can the tax paid and collected under section 140A be described as a mere ad hoc or interim payment which can be said to fail in the absence of a regular assessment. Held, that in the instant case, the petitioner claimed refund not as a result of any order passed in appeal or other proceeding. It was not the case of the petitioner that in the return filed by the petitioner, the petitioner claimed refund of excess tax paid. The petitioner's claim was based on the fact that he had filed his return and paid the taxes but no order of assessment had been passed within the time provided under the Act. In such a situation, the taxable income shown in the return, so filed by the petitioner, shall be treated as admission of the petitioner and lie same shall be binding on him unless he files a revised return claiming some non-taxable income and on that basis refusing the liability for tax payment. The petitioner was not entitled to refund of this Court. By the Court: Section 153(1)(a)(iii) has not provided that the return filed by the petitioner shall be deemed to have been an order of assessment of income-tax accepting the return of the assessee. In many matters under the law and otherwise an assessee is…

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