What the courts have decided on section 140A, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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CIT v Shelly Products
Supreme CourtCuts both ways
My assessment was annulled by the Tribunal and the department cannot make a fresh one. Do I get back everything I paid, including the tax on my own returned income?
No, not everything. The Supreme Court held that liability to income tax under section 4(1) does not depend on an assessment being made, and that the return itself is an admission of the tax due on the income disclosed. So where an assessment is annulled or set aside and no fresh assessment can be made, the assessee gets a refund of everything paid in excess of the tax chargeable on the returned income, but the department may keep the tax referable to that returned income. Retaining it does not offend Article 265.
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S.P. Velayutham v ACIT
High CourtHelps taxpayerHigh Courts differ
I admitted the tax in my return but could not pay it. Can that be prosecuted as a wilful attempt to evade payment under s.276C(2)?
No, not on default alone. The Madras High Court held that a prosecution under s.276C(2) for wilfully attempting to evade payment of tax cannot be launched against an assessee who has merely defaulted in paying tax on time; without mens rea there is no wilful attempt.
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CIT, Kolkata-I v Birla Corporation Ltd
High CourtHelps taxpayerHigh Courts differ
Part of my refund is self-assessment tax I paid under s.140A. The officer says no interest is payable on that. Is he right?
No. The Calcutta High Court held that s.244A(1)(b) is a residuary clause that covers a refund of excess self-assessment tax paid under s.140A, and that interest runs from the date the tax was paid to the date the refund is granted — a starting point since narrowed by s.244A(1)(aa) for periods from 1 June 2016. The Explanation to clause (b) does not stand in the way, because it operates only where the tax was paid pursuant to a notice of demand under s.156.
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Bank of Baroda v ACIT
ITATHelps taxpayer
They paid me part of my refund and left the rest outstanding. Do I lose interest because they say the part paid covered the interest?
The opposite. The Tribunal held that a refund already granted is to be adjusted first against the interest component of the refund and only the balance against the tax component, so that the tax still outstanding continues to carry interest under s.244A until it is actually paid. The rationale is symmetry with the Explanation to s.140A(1), which requires a payment made by an assessee to be adjusted first towards interest and then towards tax.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.