Now Reading: ITAT Delhi orders Rs 5.31 lakh TDS refund despite no original ITR
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ITAT Delhi orders Rs 5.31 lakh TDS refund despite no original ITR
The Income Tax Appellate Tribunal (ITAT), Delhi, has directed the tax department to refund Rs 5,31,680 in TDS with statutory interest to a taxpayer who had not filed an original income tax…
The Income Tax Appellate Tribunal (ITAT), Delhi, has directed the tax department to refund Rs 5,31,680 in TDS with statutory interest to a taxpayer who had not filed an original income tax return for assessment year 2019-20. The taxpayer, a resident of Jor Bagh, New Delhi, received a notice under Section 148 in March 2023 after the department flagged high-value transactions through its Insight portal.
In response, the taxpayer filed a return declaring a business loss of Rs 1.38 crore, nil taxable income, and claimed the refund of TDS deducted by others. The Assessing Officer and the Commissioner of Income Tax (Appeals) both rejected the claim, citing the absence of an original return under Section 139. The ITAT, however, ruled that Section 237 creates a substantive right to a refund when tax paid exceeds the amount legally chargeable, and retaining such tax violates Article 265 of the Constitution.
Indian Opinion Analysis
The ruling clarifies that a refund claim arising directly from the outcome of reassessment proceedings is not barred simply because no original return was filed. The ITAT distinguished the Supreme Court's Sun Engineering Works precedent, noting that the taxpayer here was not raising a fresh deduction but seeking refund of tax the reassessment itself showed was never due. For taxpayers facing Section 148 notices, this means the refund right under Section 237 stands independent of the original return requirement, provided the claim flows from the reassessment's own determination. The department may appeal to the Delhi High Court, but the tribunal's reliance on constitutional principle makes the order harder to overturn.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
