D.B. Engineering Pvt. Ltd. Vs ACIT (ITAT Delhi)
Summary: The Delhi Bench of the Income Tax Appellate Tribunal allowed the assessee’s appeal and directed the Assessing Officer to grant a refund of Rs.5,31,680/- together with consequential statutory interest, holding that excess tax could not be retained merely because the refund claim was made in a return filed pursuant to notice under section 148 rather than section 139.
The assessee, D.B. Engineering P. Ltd., had not originally filed its return of income for Assessment Year 2019-20. Proceedings under section 147 were initiated after information relating to certain high-value transactions was available on the Insight Portal. An order under section 148A(d) was passed and notice under section 148 was issued on 27.03.2023. In response, the assessee filed its return on 21.04.2023 declaring a business loss of Rs.1,38,29,756/- and claiming refund of Rs.5,31,680/- representing tax deducted at source. After adjustment of losses, the returned taxable income was Nil.
The assessment was completed under section 147 read with section 144B, substantially accepting the returned income and determining total income at Nil. However, the Assessing Officer denied the refund on the ground that it could not be claimed in a return filed under section 148 because the assessee had not filed an original return under section 139. The CIT(A) upheld this position, observing that reassessment proceedings under section 147 were intended for the benefit of the Revenue and not for conferring a fresh right upon the assessee to claim a refund. The CIT(A) principally relied upon the Bombay High Court decision in K. Sudhakar S. Shanbhag, following the Supreme Court decision in Sun Engineering Works Pvt. Ltd.
