High Court Of Kerala
Varkey Jacob L/H Of Late Smt. Lucy Kochuvareed vs. DCIT & Anr.
Section 237, 240, proviso (b)
Asst. Year 1979-80 to 1984-85
P.R. Ramachandra Menon, J.
Writ Petn. No. 19823 of 2006
15th December, 2009
Counsel appeared :
V. Ramachandran with Abeesh Jose, for the Petitioner : P.K.R. Menon & Jose Joseph, for the Respondents
JUDGMENT
P.R. Ramachandra Menon, J. :
Whether the ‘self-assessed tax’ paid by the assessee on 30th March, 1989 in respect of the asst. yrs. 1979-80 to 1984-85, on the basis of the returns filed later on 11th Oct., 1989, (i.e., before the issuance of notice under s. 148 of the IT Act, but sought to be treated as valid returns filed in response to the above notice) has to be refunded to the assessee, on setting aside the assessment order passed by the assessing authority under s. 143(3) of the Act, is the issue involved herein.
The sequence of events reveals that the predecessor-in-interest of the petitioner, late Lucy Kochuvareed was a co- owner of the “Vellanikkara and Thattil Rubber Estate”, which was acquired by the Government of Kerala on 15th March, 1974. Challenging the inadequacy of compensation awarded, the matter was taken up before the Reference Court and also before this Court, whereby the compensation was enhanced, granting interest at the rates stipulated under the amended Land Acquisition Act. The said proceedings became final as per the judgment delivered by this Court on 28th Aug., 1987 in the concerned land acquisition appeal. Total amount awarded by this Court towards interest on the enhanced compensation, for the period from 1st May, 1973 to 28th Aug., 1987, was Rs. 96,56,593, out of which, the deceased Lucy Kochuvareed obtained 2/3 share, i.e., Rs. 64,37,728 which was disbursed to her in three instalments during the year ended on 31st March, 1988, 31st March, 1989 and 31st March, 1990 respectively.
On 30th March, 1989, the assessee (Lucy Kochuvareed) remitted a sum of Rs. 26,58,000 as borne by Ext. P1 challan receipt, wherein the assessment year was mentioned as ‘1989-90’. Subsequently on 7th Oct., 1989, the assessee wrote a letter to the concerned ITO, stating that the assessment year shown as ‘1989-90′ was only a mistake, instead of remitting the amounts by separate challans for ’11’ years and requested the Department to give credit to the ’11’ years commencing from the asst. yrs. 1979-80 to 1989-90, showing the total tax liability as Rs. 26,10,814 and seeking to refund the balance sum of Rs. 47,186. The assessee also requested the Department not to charge any interest, since there was total uncertainty regarding the quantum of enhanced compensation payable and also as to the rate of interest (which became final only on passing the final verdict by this Court in 1987) and further since bulk of the amount towards interest was received only during the previous year ended on 31st March,1989. Immediately thereafter, the deceased assessee filed a series of returns of income for all the ’11’ assessment years as stated above.
The returns so filed on 11th Oct., 1989 in respect of the years 1988-89 and 1989-90 were subsequently amended by filing ‘revised’ returns on 3rd Jan., 1990 and returns on 23rd March, 1990. Exts. P2 and P3 assessment orders were passed in respect of the said assessment years under s. 143(3) by the first respondent, fixing the tax liability, interest payable under the different provisions, the amount of tax already paid from the total amount of Rs. 26,58,000 effected on 30th March, 1989 and the balance payable. Even though the first respondent accepted the returns filed on 11th Oct., 1989 in respect of the asst. yr. 1985-86 onwards, the returns filed in respect of the asst. yrs. 1979-80 to 1984-85 were not accepted as beyond the specified time provided under s. 139 of the IT Act.
It is the admitted case of the petitioner that the deceased assessee could not file the returns in respect of the asst. yrs. 1979-80 to 1984-85 within the time as specified under s. 139. It is stated that the assessing authority had issued notice under s. 148 of the IT Act on 4th July, 1980; despite which no return was filed, since she believed that she had no taxable income. Thereafter on 15th July, 1983, the assessing authority issued notice under s. 142(1) for commencing an enquiry for making assessment which was replied by the petitioner as per letter dt. 28th July, 1983 stating that, her main source of income was interest receivable on the additional compensation, if any, that was to be allowed by the High Court of Kerala (where the matter was pending consideration) and hence that she was not in a position to file the returns till the proceedings before the High Court were got finalized. Accordingly, time was sought for, to file the returns, on different occasions (according to the petitioner she was granted time till 24th Oct., 1989 as stated in para 5 of the writ petition). It was after finalisation of the proceedings before this Court in the land acquisition appeal, that she chose to file the returns on 11th Oct., 1989 for the ’11’ asst. yrs. 197980 to 1989-90, though the returns in respect of the asst. yrs. 1979-80 to 1984-85 were belated.
The assessing authority who did not accept the returns in respect of the asst. yrs. 1979-80 to 1984-85 being time- barred, issued fresh notice under s. 148 of the IT Act on 18th Jan., 1990. Instead of filing fresh returns, the deceased assessee, as per Ext. P4 series letters dt. 20th Feb., 1990, requested the assessing authority to treat the returns already filed by her on 11th Oct., 1989 as valid returns in response to the notice issued under s. 148 of the IT Act. Finally, the first respondent passed the final orders under s. 143(3) on 31st Dec., 1990 for the asst. yrs.
1979-80 to 1984-85 as borne by Ext. P5 series, whereby, the first respondent held that interest was liable to be paid under different heads and after giving credit to the amount of tax already paid on 30th March, 1989, the balance amount was demanded, which was challenged by filing different writ petitions before this Court. Pursuant to the direction given by this Court to pursue the statutory remedy, the assessee preferred appeals before the CIT. After considering the facts and figures, the appellate authority, also placing reliance on the dictum laid down by the Division Bench of this Court in Writ Appeal No. 1648 of 2002; held that the assessment orders passed under s. 143(3), r/w s. 147 for the asst. yrs. 1979-80 to 1984-85, were not correct or sustainable; the liability having been extinguished by way of limitation which hence could not be reopened, invoking the extended limitation contained in the amended provisions. Accordingly, Ext. P5 series orders, refixing the tax liability, also by way of adding interest under different heads, were annulled. Pursuant to Ext. P6 appellate order, the second respondent passed Ext. P7 series orders giving effect to the appellate order and cancelling Ext. P5 series orders, declaring that the ‘returns’ already filed by the assessee on 11th Oct., 1989 would stand unchanged; thus showing the balance of tax payable as ‘nil’. The petitioner has approached this Court challenging Ext. P7 to the extent the Departmental authorities have not chosen to refund the amount of tax paid by the deceased assessee on 30th March, 1989. It is contended that the course followed is not correct in the absence of any ‘valid return’ as on the date of filing the same on 11th Oct., 1989; that no tax was paid along with the return filed on 11th Oct., 1989; that no valid proceedings could have been taken against the assessee in respect of the belated period, when Ext. P5 series orders passed by the assessing authority were annulled by the appellate authority vide Ext. P6 and hence that the Department could not have validly levied, imposed or collected any tax, thus seeking to refund the sum of Rs. 17,23,123 with interest as prescribed.
The respondents have filed a counter affidavit rebutting the various averments and allegations raised by the petitioner, also pointing out that, though notice under s. 148 and other relevant provisions of law were admittedly issued on 4th July, 1980 and 15th July, 1983, no return was filed but for sending a reply dt. 28th July, 1983 stating that the matter could not be finalized because of the proceedings pending before the High Court of Kerala and thus seeking for further time as conceded in para 7 of the writ petition. It is also conceded in the very same para that, in response to the subsequent notice dt. 18th Jan., 1990 issued by the Department under s. 148 of the IT Act, the assessee, vide Ext. P4 series letters dt. 20th Feb., 1990, had requested the ITO to treat the returns already filed on 11th Oct., 1989 as the ‘valid returns’ in response to the notice. The contention of the petitioner that the remittance made on 30th March, 1989 vide Ext. P1 challan was only in respect of the year ‘1989-90′ that too by mistake, has been sought to be rebutted by producing Ext. R1(a) letter dt. 7th Oct., 1989 written by the assessee, seeking to have the amount credited towards the tax liability for ’11’ years commencing from 1979-80 to 1989-90 as stated therein. The petitioner has reiterated the contentions by filing the reply affidavit; in response to which, the Department has filed a statement dt. 11th June, 2009 and an additional statement dt. 24th June, 2009 through the standing counsel (along with petitions seeking to accept the same) asserting that the course pursued by the Department in issuing Ext. P7 is very much correct and proper and that the assessee who had remitted the tax voluntarily and filed the returns is estopped from contending that the filing of the returns and remittance of the tax was not valid or proper.
Mr. V. Ramachandran, learned senior counsel appearing for the petitioner submits that the returns filed on 11th Oct., 1989 in respect of the asst. yrs. 1979-80 to 1984-85 were admittedly beyond the time as stipulated under s. 139 of the IT Act; that no tax was paid on the date of filing the returns; that on the date of effecting the Ext. P1 payment, no return was in existence and further since no return was filed simultaneously remitting the tax, there was no valid return and as such, the Department could not have imposed, levied or collected any tax under any circumstance. Ext. P5 series orders passed by the assessing authority having been rightly set aside by the appellate authority, as per Ext. P6 order, the amount already remitted on 30th March, 1989, to the extent ithas been appropriated vide Ext. P7, is liable to be refunded to the petitioner, submits the learned senior counsel.
Mr. P.K. Ravindranadha Menon, the learned senior counsel appearing for the respondents seeks to sustain Ext. P7 series orders based on the contents of the counter affidavit and the statements filed subsequently, stating that the relevant provisions of law and the judicial precedents do not support the case of the petitioner and that neither Ext. P6 appellate order setting aside Ext. P5 assessment orders and refixing the tax liability charging interest under different heads, nor the decision rendered by the Division Bench of this Court in Writ Appeal No. 1668 of 2002 does come to the petitioner’s rescue and hence that the tax paid by the deceased assessee, as assessed and shown in the returns filed by her, is not liable to be refunded. Reference is also made to the proviso (b) to s. 240 of the IT Act (which however was brought into force only from 1st April, 1989) in support of the said contention, pointing out that the Ext. P6 appellate order was passed only on 21st Nov., 2005.
It is conceded by both the sides that interest payable on the compensation pursuant to the land acquisition proceedings taken by the Government of Kerala was got quantified and became final only on passing the judgment by this Court in the concerned land acquisition appeal in the year 1987 and the said amounts were disbursed to the assessee in three instalments, during the year ending on 31st March, 1988, 31st March, 1989 and 31st March, 1990. It is beyond doubt that the said amounts, though disbursed in a particular year/years is liable to be distributed for the different years concerned, in view of the declaration of law in this regard by a Full Bench of this Court in Peter John (Decd.) vs. CIT (1986) 51 CTR (Ker)(FB) 83 : (1986) 157 ITR 711 (Ker)(FB) and by the apex Court in Sankari Manickyamma vs. CIT (1990) 84 CTR (SC) 164 : (1990) 181 ITR 400 (SC). The case of the petitioner is that the assessee, despite the receipt of s. 148 notice dt. 4th July, 1980 and s. 142(1) notice dt. 15th July, 1983, could not file any return, as the main source of the income was from the ‘interest’ to be obtained on enhancement of the compensation; for which, proceedings were pending consideration before this Court, as explained in the reply dt. 28th July, 1983 submitted before the Department.
It is also an admitted fact that the proceedings became final only pursuant to the verdict passed by this Court in the land acquisition appeal in 1987 and it was accordingly, that the deceased assessee, who got the interest disbursed by way of three instalments in the year ending on 31st March, 1988, 31st March, 1989 and 31st March, 1990 chose to pay a sum of Rs. 26,58,000 as per Ext. P1 challan; followed by filing the returns for the different asst. yrs. from 1979-80 to 1989-90 on 11th Oct., 1989. There was absolutely no case for the deceased assessee (after the judgment and decree obtained from this Court in the land acquisition appeal), that she was not liable to file any return or to pay any tax. The dispute arose only when the returns in respect of the asst. yrs. 1979-80 to 1984-85 were not accepted, leading to Ext. P5 series orders passed under s. 143(3), casting huge liability upon the assessee under different heads; which in turn were subjected to challenge in appeal leading to Ext. P6 order annulling the assessment orders (placing reliance on the dictum in Varkey Jospeh’s case in Writ Appeal No. 1668 of 2002). It was in the said circumstance, that the petitioner put up a ‘new case’ that the tax remitted under Ext. P1 challan, to the extent as now claimed in the writ petition, is liable to be refunded; contending that the returns submitted by the deceased assessee on 11th Oct., 1989 were ‘not valid returns’ and hence no tax could have been levied, imposed or collected by the Department in any manner.
The sum and substance of the pleadings and materials on record is that the proceedings originally taken by the Department to have the assessment effected by issuing the statutory notices on 4th July, 1980 and 15th July, 1983 were got stalled by the assessee, by filing petitions for extension of time, referring to pendency of the land acquisition proceedings before this Court, contending that the main income was by way of ‘interest’ obtainable on enhancement of the compensation by the High Court in the said proceedings. Admittedly, the proceedings became final only in the year 1987; whereby a sum of Rs. 64,37,728, being the share of the deceased assessee, was disbursed to her by way of three instalments in the years ended on 31st March, 1988, 31st March, 1989 and 31st March, 1990. It was only on finalization of the quantum as above, that the deceased assessee volunteered to pay the sum of Rs. 26,58,000 towards the tax liability on 30th March, 1989 as borne by Ext. P1. Though the assessment year was shown in Ext. P1 challan as ‘1989-90′, it was subsequently sought to be corrected vide Ext. R1(A) dt. 7th Oct., 1989, to have it apportioned in respect of the ’11’ different assessment years from 1979-80; followed by the returns filed on 11th Oct., 1989. It was without mentioning anything about Ext. R1(A) letter written by the deceased assessee, that the petitioner chose to mould the writ petition, wrongly stating that Ext. P1 payment was only in respect of the asst. yr. ‘1989-90’. The course and conduct pursued by the petitioner in filing the writ petition, without disclosing the entire facts, cannot but be deprecated.
Incidentally, it is to be noted that the appellant/petitioner in Writ Appeal No. 1668 of 2002 (referred to by the petitioner and relied on by the appellate authority in Ext. P6 order) was a ‘lessee’ of the very same rubber estate
‘Vellanikara Estate’ acquired by the Government for establishing the agricultural university, as involved herein. The compensation awarded to the said lessee was finally enhanced in land acquisition Appeal No. 247 of 1980 preferred before this Court, as per judgment dt. 28th Jan., 1987. On receipt of the award amount including interest, the said lessee filed returns on 3rd Jan., 1990. The Department accepted the returns for the period from 1985-86 and in respect of the returns for the asst. yrs. 1979-80 to 1984-85, notice was issued under s. 148 of the IT Act, to reopen the assessment and orders were passed under s. 143(3), also charging interest under ss. 139(8) and 217 of the IT Act. The case put forth by the lessee before this Court was that, there was no justification for reopening the assessment invoking the ‘amended’ provisions of law and that the assessment could have been only under s. 147(b) of the Act. There was no case for the said lessee that the amount paid by him as tax as per the returns ought to have been refunded. After discussing the relevant provisions of law and the binding judicial precedents, it was held by a Division Bench of this Court that, the assessment orders issued, where the liability already stood extinguished, could not be reopened, invoking the extended limitation period in the amended provisions. The said decision does never say that the amount paid by the petitioner by way of tax in respect of the income returned is liable to be refunded.
As observed hereinbefore, the amount remitted as per Ext. P1 challan, mentioning the year of assessment as ‘1989-90′, was later sought to be distributed in respect of ’11’ assessment years from 1979-80 to 1989-90 as stated in Ext. R1(A) letter dt. 7th Oct., 1989 written by the deceased assessee; simultaneously requesting that no ‘interest’ might be levied, in view of the nature and pendency of the proceedings which became final only on quantification of the amount payable including the ‘rate’ of interest as per the judgment and decree passed by the High Court of Kerala in the year 1987. After getting the proceedings initiated by the Department stalled, refering to the pendency of the proceedings before this Court and after remitting the tax voluntairily on finalization of the said proceedings (on the basis of the exact income obtained by way of interest), followed by filing of the necessary returns and also after requesting the Department vide Ext. P4 series letters dt. 20th Feb., 1990 to treat the returns already filed on 11th Oct., 1989 as valid returns in response to the notice dt. 18th Jan., 1990 issued by the Department under s. 148 of the IT Act, the petitioner is estopped from contending that the payment effected by the assessee was not voluntary and that no amount could have been appropriated by the Department in respect of the tax admitted and shown as due for the different assessment years as requested by the assessee herself in Ext. R1(A) letter dt. 7th Oct., 1989 and as shown in the returns filed on 11th Oct., 1989. The petitioner cannot be permitted to blow hot and cold simultaneously and the contention raised to the contrary does not appear to be palatable to this Court. Somewhat a similar situation as to the sustainability of the course pursued by the Department arose for consideration of the Division Bench of the Calcutta High Court in Iqbal Singh Atwal vs. CIT (1983) 34 CTR (Cal) 179 : (1984) 147 ITR 599 (Cal) where the assessee failed to file returns within the time provided under s. 139(4), when notice was issued under s. 148. In response to the said notice, the assessee requested that the return already filed might be treated as the return filed in pursuance to the notice under s. 148. The Department accordingly effected the assessment on the basis of such returns filed earlier. The proceedings taken in this regard were declared as valid and very much sustainable. Obviously, the said decision was rendered, following the verdict in similar lines passed by a Division Bench of the Madras High Court in K.S. Ratnaswami vs. Addl. ITO (1963) 48 ITR 568 (Mad). Then the remaining question is only regarding the scope of Ext. P6 appellate order setting aside Ext. P5 series assessment orders. As observed hereinbefore, Ext. P6 has only set aside the assessment made by the Department and not the returns filed by the assessee. The tax suffered by the assessee on the income returned voluntarily, by way of self-assessment has not been ordered or intended to be refunded vide Ext. P6 appellate order. More so, in view of the specific stipulation provided as per ‘proviso (b)’ to s. 240 of the IT Act. True the said provision was brought into force only w.e.f. 1st April, 1989. But, the returns were admittedly filed subsequently on 11th Oct., 1989; which were requested to be treated as valid returns in response to the notice issued under s. 148(1) as per Ext. P4 series letters dt. 20th Feb., 1990. In other words, the said ‘proviso’ had taken its breath and was very much live even on the date of filing the returns and very much on the date of passing Ext. P6 appellate order. This Court had an occasion to consider whether refund of the tax paid on ‘self assessment’ could be ordered to be refunded. After discussing the relevant provisions of law, it was held by this Court in E. Philip Joseph vs. ITO & Ors. (1998) 149 CTR (Ker) 166 : (1998) 234 ITR 846 (Ker) that no such refund of tax paid on ‘self assessment’ could be ordered under any circumstance. The legal position has become crystalclear by virtue of the decision rendered by the apex Court in CIT vs. Shelly Products & Anr. (2003) 181 CTR (SC) 564 : (2003) 261 ITR 367 (SC) holding that the assessee is not entitled to have refund of tax paid on self-assessment.
17. Admittedly, the deceased assessee made a ‘self assessment’ of tax and remitted the same as per Ext. P1 challan; which was later sought to be distributed in respect of the different assessment years as stated in Ext. R1(A) letter dt. 7th Oct., 1989. This is in conformity with the figures given in the returns filed by her voluntarily on 11th Oct.,
1989. Filing of return itself is a mode of ‘assessment’ of tax, though by way of self-assessment. The deceased assessee admittedly having effected ‘self assessment’ and paid the tax amount, it is no more open to contend that the said amount paid voluntarily by the deceased assessee, is to be refunded to the petitioner; merely since the subsequent proceedings taken by the Department also charging interest for the delay under different heads happened to be annulled by the appellate authority vide Ext. P6. As per Ext. P6, only the assessment orders passed by the Department have been annulled and it has not set aside the ‘self- assessment’ made by the deceased assessee and has not ordered any refund of tax already remitted by her in respect of the different assessment years as stipulated and requested by the assessee herself. The case set forth by the petitioner, raising hypothetical contentions, contrary to the admitted facts and figures, does not hold any water at all. No premium can be given to anybody for his/her own deeds or misdeeds and acts or omissions.
In the above facts and circumstances, absolutely no interference is called for. The writ petition fails and it is dismissed accordingly.
[Citation : 325 ITR 507]
