Case Law Details
Kashmir Tubes Vs Union of India (Jammu & Kashmir High Court)
In the case of Kashmir Tubes vs. Union of India, the petitioner filed its income tax return for the assessment year 2005-06, declaring an income of ₹2.14 crore while claiming excise duty refund and interest subsidy under a government scheme. The assessing officer made additions, increasing the tax liability. The petitioner challenged this before the Commissioner of Income Tax (Appeals) and later the Income Tax Appellate Tribunal (ITAT), which ruled in its favor. The Union of India appealed to the Jammu & Kashmir High Court under Section 260A of the Income Tax Act, but the court dismissed the appeal in 2013. Following the ITAT ruling, the petitioner was entitled to a refund of ₹39 lakh, which was granted. However, a rectification order under Section 154 of the Income Tax Act was passed in 2021 due to discrepancies in tax credit allocation caused by an incorrect PAN entry on the challans. The petitioner disputed the non-credit of ₹25 lakh, which was not reflected in the Online Tax Accounting System (OLTAS), leading to an administrative deadlock.
Despite confirmation that the petitioner had deposited the disputed amount, the authorities maintained that manual intervention was not possible unless the OLTAS system reflected the credit. Communications were sent to relevant authorities for correction, but no resolution was reached. The High Court acknowledged that the issue was a clerical error where the petitioner mistakenly used its TAN instead of PAN. Since there was no dispute over the payment itself, the court directed the Deputy Commissioner of Income Tax, Circle-1, Jammu, to ensure the correction was made within two weeks. If approval from the Chief Commissioner of Income Tax, Amritsar, was not received within this timeframe, it would be deemed granted, allowing the necessary correction and release of funds, including statutory interest. This judgment ensures that taxpayers are not unfairly denied refunds due to minor clerical mistakes.
FULL TEXT OF THE JUDGMENT/ORDER OF JAMMU & KASHMIR HIGH COURT
01. In the instant case, the short grievance projected by the petitioner is that it filed its return of income on 31.10.2005 for Assessment Year 2005- 2006 declaring an income of Rs.2,14,20,490/- and claimed excise duty refund and interest subsidy for the said Assessment Year as per the government Scheme. The Assessing authority while assessing the petitioner made additions in income and created additional demand of tax.
02. Feeling aggrieved the petitioner filed an appeal before the Commissioner of Income Tax Appeals and thereafter before the Income Tax Appellate Tribunal. Income Tax Appellate Tribunal ruled in favour of the petitioner. Feeling aggrieved, the respondents filed an appeal before this Court in terms of Section 260-A of the Income Tax which came to be dismissed vide order dated 29.01.2013. Consequent upon the order of the Hon’ble ITAT, the income of the petitioner was determined at Rs.2,14,40,836/-. The petitioner was held entitled to refund amounting to Rs.39.00 lacs which was given to the petitioner. On 15.11.2021 rectification order under Section 154 of the Income Tax Act was passed on an application moved by the petitioner on the ground that full credit of challans deposited by the petitioner had not been given by the assessing officer due to wrong PAN number mentioned in the challans by the petitioner. The petitioner has raised a dispute with regard to credit of Rs.25.00 lacs, which as per the petitioner, has not been given to him. The stand of the respondents is that as per the records maintained with ITBA system, this credit is not reflected in OLTAS system of credit management. It is submitted that the unless credit is reflected no action can be taken manually. The respondents further submit that on 09.06.2021 a communication was written to ADG (Systems)-2 Ghaziabad for correction of challans for the Assessment Year 2005-2006, for the petitioner had inadvertently mentioned its TAN number instead of PAN number on the challans deposited in the J&K Bank Gandhi Nagar, Jammu. The letter was also issued to the Branch Manager Jammu & Kashmir Bank Gandhi Nagar, Jammu on 07.04.2021 followed by reminder issued on 22.12.2023 for confirmation and verification of payment of challans stating that perusal of the OLTAS for the relevant year revealed that above payment stated to be made by the petitioner in your bank was not reflected. The matter was taken up by the respondents with the Director General of Income Tax (Systems), Ghaziabad for correction of challan. As per the respondents, no response has been received so far.
03. Be that as it may, the fact remains that the only correction which is required to be carried in the two challans is with regard to the PAN number. Admittedly, the petitioner has mentioned on the challans TAN number instead of PAN number. Rest there is no dispute either with regard to submission of the challans or payment of amount of Rs.25.00 lacs. The respondents do not deny that aforesaid amount is due to the petitioner. They, however, submit that unless the necessary correction in the challans is carried out by following due procedure, said amount cannot be released.
04. Deputy Commissioner of Income Tax, Circle-1, Jammu has appeared in person to assist this Court to sort out the matter. Ruveda Salam, Deputy Commissioner of Income Tax, Circle-1, Jammu appearing in person submits that the amount due to the petitioner shall be released after the necessary correction in the challans in question is carried out after the approval of the Chief Commissioner Income Tax, Amritsar.
05. In view of the aforesaid admitted position, we are inclined to dispose of this petition by directing the Deputy Commissioner Income Tax, Circle-1, Jammu to ensure that the necessary correction in the challan as stated above is carried out with or without the approval of the Chief Commissioner Income Tax, Amirtsar within a period of two weeks and the amount payable to the petitioner is released. We also make it clear that in case no approval is received by the Deputy Commissioner Income Tax Appeals for correction of an inadvertent and clerical error in the challans from the office of the Chief Commissioner Income Tax, Amritsar, the approval, as may be required, shall be deemed to have been granted and the Deputy Commissioner Income Tax, Circle-1, Jammu shall be competent to carry out the necessary correction and release the amount payable to the petitioner. Needless to say that amount shall be payable along with statutory interest.
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