United Spirits Limited Vs ACIT (Karnataka High Court)
Karnataka High Court held that even if the tax paid is found to be less than that payable, no further demand can be made for recovery of the balance amount when a fresh assessment is barred.
Facts- The petitioner is a public limited company, and the petitioner has filed its return of income. AO, after a scrutiny assessment u/s. 143(3) has passed assessment after making various disallowances. CIT(A) partly allowed the appeal.
Meanwhile Rectification Orders u/s. 154 of the IT Act are passed rectifying certain errors in the assessment order permitting certain refunds.
The petitioner has filed respective appeals under Section 253 of the IT Act before the Income Tax Appellate Tribunal [for short, ‘the ITAT] against the orders of the CIT [Appeals], and the ITAT has disposed of these appeals by common order dated 31.03.2015 as contemplated under Section 254 of the IT Act stating that the appeals are allowed for statistical purposes with certain conclusions.
Conclusions- Hon’ble Supreme Court in the case of CIT v. Shelly Product has held that even if the tax paid is found to be less than that payable, no further demand can be made for recovery of the balance amount when a fresh assessment is barred.
Held that with the AO’s failure to close the assessment after the ITAT’s common order within the timeline permitted and with such proceedings having lapsed, the AO cannot make a fresh consideration of the questions restored by the ITAT, and consequentially, the petitioner’s declaration of bad debts/advances written off and allowance claimed under Section 14A of the Income Tax Act are restored. As such, the petitioner will be entitled to a refund along with the interest.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
1. The petitioner has impugned the notices dated 05.11.2020 and 06.11.2020 issued by the first respondent to extend an opportunity of hearing after the Income Tax Appellate Tribunal’s [ITAT] common Order dated 31.03.2015 in [a] ITA No.1277/Bang/2010, [b] ITA No. 424 & 605 [Bang] /2013 and [c] ITA No. 652 & 653[Bang] 2013. The petitioner further seeks directions to the respondents to refund certain amounts with applicable interest corresponding to the three assessment years.
2. A brief conspectus of facts leading to these impugned notices is stated thus. The petitioner is a public limited company, and the petitioner has filed its return on income with the claims for refund for the corresponding assessment years as follows:
