Tax Refund Cannot Be Denied Merely Due To Form 26AS Discrepancies: Delhi HC

In the case at hand, the assessee, who received compensation under the Land Acquisition Act, faced issues because the tax deducted on the compensation did not appear in their Form 26AS. The assessee sought to get credit for the TDS amount of Rs. 1.68 lakhs against the enhanced compensation of Rs. 18.59 lakhs. After the Land Acquisition Collector issued a revised Form 16A reflecting the correct TDS, the assessee applied to submit a revised return, which was initially rejected.

The Division Bench of Justice Yashwant Varma and Justice Ravinder Dudeja said, “amount of tax paid or treated as paid for and on behalf of the assessee if found to be in excess of that which is chargeable, the assessee would become entitled to claim a refund.”

"..the petitioner cannot be penalized for the mere reason that the Form 26AS suffered from a discrepancy.", the Court added.

Advocate Ram Kumar appeared for the Petitioner and Advocate Puneet Rai appeared for the Respondents.

The High Court referred to Section 119 of the Income Tax Act, which allows for the condonation of delays in filing returns. The Court overturned an order from the Revenue Department that had rejected the assessee’s application to submit a revised return. The High Court directed the Revenue Department to accept the revised return and process it accordingly.

The High Court found that the AO had rejected the application based on CBDT Circular No. 09/2015, which restricts the condonation of delay to within six years from the end of the assessment year. However, the Bench noted that the circular did not set a precise cut-off date and observed that other courts had granted relief even after considerable delays. The Bench deemed it unfair to deny relief based solely on the circular’s time frame when the delay was not the fault of the assessee.

Although the petition was filed after the six-year limit, the High Court ruled that the assessee should be allowed to file an amended return.

The Court allowed the petition and directed that the revised return be submitted to the concerned AO, who is then required to process the refund claim in accordance with Section 227 of the Income Tax Act.

Cause Title: Hari Kishan Sharma v. Govt Of NCT Of Delhi & Anr., [2024:DHC:6902-DB]

Appearance:

Petitioner: Advocates Ram Kumar, Sushil Kumar, and K. K. Nangia

Respondent: Advocates Puneet Rai, Ashvini Kumar, Rishabh Nangia, Sanjay Kumar Pathak, K. K. Kiran Pathak, Sunil Kumar Jha, M. S. Akhtar, and Mayank Arora.