Law:

Section:

Section 237, read with section 148, of the Income-tax Act, 1961 - Refunds - General - Assessment year 1989-90 - Pursuant to notice under section 148 assessee filed its return of income and claimed refund of amount deposited by it towards advance tax - Assessing Officer found that total income was deductible under section 80HHC and there was no escapement of income and therefore he dropped proceedings, but did not refund amount claimed by assessee - Whether order for dropping proceedings amounted to order of assessment in pursuance of return filed pursuant to notice under section 148 - Held, yes - Whether, therefore, assessee would be entitled to refund of excess amount deposited towards advance tax - Held, yes FACTS The assessee filed a return of income pursuant to notice under section 148 and claimed refund of amount which was deposited by it by way of advance tax. The Assessing Officer held that since the total income was deductible under section 80HHC, there was no escapement of income and, therefore, dropped the proceedings. He, however, did not determine the amount refundable to the assessee. On appeal, the Deputy Commissioner (Appeals) upheld the order of the Assessing Officer and held that section 147 was meant only to bring to charge the escaped amount of income to tax and it was not meant to serve as a foundation of any claim such as refund by an assessee. On further appeal, the Tribunal directed the Assessing Officer to refund the advance tax paid by the assessee. HELD In the instant case, in the return filed in pursuance of notice under section 148, the assessee had not admitted any liability of tax and the refund of the amount which was deposited by way of advance tax was claimed. [Para 7] Under section 237, if the Assessing Officer is satisfied that the amount of tax paid by an assessee for any assessment year exceeds the amount with which he is properly chargeable under the Act for that year, the assessee be given refund of the excess amount. In the instant case, admittedly, no amount had been held chargeable, therefore, the entire amount deposited towards advance tax was in excess and was, thus refundable. [Para 9] In the instant case, order for…

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