Refund: Section 237: A. Y. 2004-05: Belated revised return filed on 08-09-2011 claiming refund on basis of CBDT Circular dated 08- 05-2009: Condonation of delay: Delay to be condoned:

The
petitioner, who was an employee of RBI had opted for the Optional Early
Retirement Scheme and had received an amount as per the Scheme in the
year 2004. The RBI had deducted TDS of Rs. 1,64,117/- treating the said
payment as taxable. In the return of income for the A. Y. 2004-05 filed
on 15th October 2004 the petitioner did not claim any refund of tax as
TDS paid by RBI on his behalf nor was the credit on tax utilised to
discharge tax payable on any other income.

On 08-05-2009, CBDT
issued a Circular clarifying that the employees of RBI who had opted for
early retirement scheme during the year 2004-05 would be entitled for
benefit of exemption u/s. 10(10C) of the Income-tax Act, 1961. The
Supreme Court also in Chandra Ranganathan and Ors. vs. CIT; (2010) 326
ITR 49 (SC) held that the amounts received by retiring employees of RBI
opting for the scheme are eligible for exemption u/s. 10(10C) of the
Act. In view of the above, the petitioner filed a revised return of
income on 08-11-2011 claiming benefit of exemption available to the
Scheme u/s. 10(10C) of the Act which consequently would result in refund
of Rs.1.64 lakh paid by RBI as TDS. However, there was no response to
the above revised return of income from the respondent-revenue. The
petitioner in the meantime, also, filed an application with the CIT u/s.
119(2) (b) of the Act seeking condonation of delay in filing his
application for refund in the form of revised return of income for A. Y.
2004-05. The CIT by an order dated 04-02-2013 dismissed the application
u/s. 119(2)(b) of the Act on the ground that in view of Instruction No.
13 of 2006 dated 22nd December, 2006 by the CBDT an application
claiming refund cannot be entertained if the same is filed beyond the
period of 6 years from the end of the assessment year for which the
application is made. In the affidavit in reply dated 19th November 2013
the Commissioner of Income Tax states that he is bound by the above
instructions issued by the CBDT and consequently the claim for refund
cannot be considered.

The Bombay High Court allowed the writ petition filed by the assessee and held as under:

“i)
It is not disputed by the respondent revenue that on merits the
petitioner is entitled to the benefit of refund of TDS as the payment
received under the scheme is exempted u/s. 10(10C) of the Act. The
decision of the Apex Court in the matter of Chandra Ranganathan and Ors.
(supra) concludes the issue. This is also the view of the revenue as
clarified in CBDT Circular dated 8th May, 2009. The application u/s.
119(2)(b) of the Act is being denied by adopting a very hypertechnical
view that the application for condonation of delay was made beyond 6
years from the date of the end of the A. Y. 2004-05. In this case, the
revised return of income filed on 8th September, 2011 should itself be
considered as application for condonation of delay u/s. 119(2)(b) of the
Act and refund granted.

ii) It is to be noted that the
respondent revenue does not dispute the claim of the petitioner for
refund on merits but the same is being denied only on hypertechnical
view of limitation. It will be noted that on 8th May, 2009 the CBDT
issued a circular clarifying and reviewing its earlier decision to
declare that the employees of RBI who opted for early retirement scheme
under the Scheme will be entitled to the benefit of section 10(10C) of
the Act. Soon after the issue of circular dated 8th May, 2009 by the
CBDT and the decision of the Apex Court in Chandra Ranganathan (supra)
the petitioner filed a revised return of income on 8th September, 2011
seeking refund of TDS paid on his behalf by RBI.

iii) In the above view, we allow the petition and direct respondent-revenue to grant refund due to the petitioner.”