T.R. Senthil Kumar ORDER
T.R. Senthil Kumar, Member (J)
1. This appeal is filed by the Assessee as against the appellate order dated 14-02-2023 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as "NFAC"), arising out of the assessment order passed under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year (A.Y) 2011-12.
2. The brief facts of the case is that the assessee is a religious Trust duly registered u/s. 12A of the Act vide order dated 11.12.1979. For the Assessment Year 2011-12, the assessee Trust has not filed the original Return of Income within the due date as prescribed u/s. 139(1) of the Act. Therefore the assessee filed an application dated 28.03.2014 u/s. 119(2)(b) of the Act before CIT-III, Vadodara to accept the belated Return of Income and condone the delay in filing the above return and issue refund of TDS amount, that application was pending disposing. In the meantime, the assessee case was reopened by issuing a notice u/s. 148 dated 28.03.2018. In response, the assessee Trust filed its Return of Income with Audit Report in Form 10B on 26.04.2018 declaring Nil income and claiming refund on TDS. The Assessing Officer found that the source of income of the Trust was interest income and donation. The assessee Trust has shown gross receipt of Rs. 1,26,65,692/- and has applied income of Rs. 1,30,73,719/- for Revenue expenditure towards objects of the Trust. Thus the A.O. verified the details and accepted the Nil income filed by the assessee, but has not issued refund of Rs. 2,60,900/- being TDS from interest income.
3. Aggrieved against the same, the assessee filed an appeal before Ld. NFAC and claimed issuance of refund as per Section 237 of the Act and relying upon on various case laws. However the appeal filed by the assessee was dismissed on the ground that the assessee failed to file regular Return of Income within the prescribed time limit u/s. 139(1) of the Act. So the return filed in response to notice u/s. 148 is treated as the return filed by the assessee Trust for the first time. The reopening of assessment is made for the benefit of the Revenue and not for the benefit of the assessee and therefore relying upon the Apex Court Judgment in the case of CIT vs. Sun Engineering Works Pvt. Ltd. MANU/SC/0707/1992 : 64 taxmann.com 442 denied the refund due to the assessee. Further the Ld. NFAC held that it has no power to condone the delay in filing the original Return of Income u/s. 119(2)(b) of the Act. Thus the appeal filed by the Assessee was dismissed.
4. Aggrieved against the same, the assessee is in appeal before us raising the following Grounds of Appeal:
1. Order issued by Learned (A) is bad in law as well as on facts
2. Learned CIT (A) erred in confirming the order of learned Assessing Officer and not granting refund of Tax deducted at source of Rs. 260900 considering proceedings u/s 147 are for benefits of revenue. He ought to have granted the refund of Tax deducted at source CIT (A) erred in parting a remark that Jurisdiction to considering the facts of a case.
3. Learned condone delay in filing of return u/s 119 (2) of the Income Tax Act, is not either vested in the CIT (A) nor has been delegated to CIT (A) u/s 1192(2) of the Income Tax Act. Assessee had only stated a fact that Assessee's application made to Commissioner of Income Tax-III, Vadodara on 27.03.2014 u/s 119(2)(b) is still pending. Assessee had not approached CIT (A) for condonation of delay.
5. None appeared on behalf of the assessee, a detailed written submission filed on behalf of the assessee Trust.
6. Per contra Ld. Sr. D.R. Ms. Saumya Pandey Jain appearing for the Revenue supported the order passed by the Lower Authorities.
7. We have given our thoughtful consideration and perused the materials available on record. It is not in dispute that in pursuance of the u/s. 148 notice dated 28.03.2018, the assessee filed its Return of Income on 26.04.2018 along with Audit Report in Form 10B with Profit and Loss and Balance sheet. In the return, the assessee claimed Nil income as the assessee trust was enjoying the benefit of Section 12A from 11.12.1979 onwards. This return resulted in a refund of Rs. 2,60,900/- which is nothing but TDS from banks and financial institutions. The Ld. A.O. during the course of reassessment proceedings has verified the source of income of the Trust namely interest income and donation and application of income by the assessee for the objects of the Trust. Having been satisfied, the Assessing Officer completed the assessment as Nil, consequently any tax paid by the assessee is liable to be refunded as per Section 237 of the Income Tax Act which reads as follows:
Refunds
"237. If any person satisfies the [Assessing] Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess."
8. Plain reading of the above provision makes it clear that the Assessing Officer has no authority to withhold the refund due to the assessee on the ground that the assessee has filed belated return or invalid return. When the Assessing Officer completed the reassessment and determined the assessed income as Nil, he has no authority to withhold the refund due to the assessee which is against the provisions of Section 237 of the Act. Further the Ld. NFAC also erred in relying upon Supreme Court judgment in the case of Sun Engineering Works Pvt. Ltd. on the pretext that the reopening of assessment is made for the benefit of the Revenue and not for the benefit of the assessee. Thus the ratio of the judgment is misinterpreted by the Ld. NFAC and not applicable to the facts of the present case. Therefore the order passed by the Ld. NFAC is hereby set aside with the direction to the A.O. to issue refund due to the assessee with applicable interest in accordance with law.
9. In the result, the appeal filed by the Assessee is hereby allowed.
Order pronounced in the open court on 17-11-2023.
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