No ITR filed, then tax notice led to Rs 5.31L refund battle which taxpayer won
While completing the assessment, the Income Tax Assessing Officer (AO) rejected the refund claim on the sole ground that a refund could not be claimed through an ITR filed under Section 148 when no original ITR had been filed under Section 139.
In a tax refund dispute, a taxpayer from New Delhi successfully obtained a refund of Rs 5.31 lakh after initially failing to file an original income tax return under Section 139. The taxpayer received a tax notice due to suspicions about undisclosed high-value transactions. Subsequently, the Income Tax Department issued a Section 148 tax notice and demanded payment, leading to the filing of an ITR under Section 148.
The Income Tax Assessing Officer rejected the refund claim, arguing that only a direct original ITR filed under Section 139 could entitle the taxpayer to a refund. The Income Tax Appellate Tribunal (ITAT) in Delhi disagreed, ruling that the taxpayer had a substantive right to a refund when the reassessment determined Nil taxable income.
The tribunal pointed to relevant High Court judgments and Article 265 of the Indian Constitution to support its decision. The taxpayer was thus awarded the refund along with applicable statutory interest.
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