A Delhi resident successfully challenged a department decision to deny a tax refund due to the absence of an original return, highlighting the tribunal’s stance that technical lapses should not prevent lawful refunds.
A Delhi taxpayer has won relief from the income tax appellate tribunal after being denied a refund simply because no original return had been filed for assessment year 2019-20. The case began when the department’s Insight portal flagged high-value transactions linked to the taxpayer, who lives in Jor Bagh, New Delhi, prompting a notice and a reassessment process.
According to reports by Livemint and The Economic Times, the taxpayer then filed a return in response to the notice under Section 148, declaring a business loss of Rs 1.38 crore. That reduced taxable income to nil and gave rise to a claim for a TDS refund of Rs 5.31 lakh. The assessing officer accepted the nil-income position but refused the refund on the ground that no original return had been filed under Section 139, and the first appellate authority upheld that view.
The Delhi bench of the Income Tax Appellate Tribunal took a different view. It said the refund could not be denied merely because the original return was missing, since Section 237 of the Income Tax Act provides for repayment where tax paid exceeds the amount properly chargeable. The tribunal also relied on Article 265 of the Constitution, which bars collection of tax without authority of law, and ordered the assessing officer to release the refund with statutory interest.
Tax specialists say the ruling should not be read as a licence to ignore filing deadlines. According to tax professionals quoted by the reports, the usual route remains filing returns on time, while late claimants may need to seek condonation of delay under Section 119(2)(b). Even so, the tribunal’s decision reinforces a wider principle that technical lapses should not defeat a refund that is otherwise legally due, especially where reassessment itself has established that no tax was payable.
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