SARAYA SUGAR MILLS LIMITED Vs. INCOME TAX OFFICER

JUDGEMENT

(1.) BY this petition under article 226 of the Constitution of India the petitioner seeks quashing of a notice issued under Section 148 of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the assessment year 1977-78 and a direction to refund to the petitioner the entire taxes deposited by it for the assessment year 1977-78 with interest.

(2.) WE have heard Sri M. C. Ramachandran assisted by Sri Anil Sharma, learned counsel for the petitioner, and Sri Bharat Ji Agarwal, learned senior standing counsel, for the respondents.

(3.) WE are now left with the petitioner's claim for refund of the entire taxes. The contention of the petitioner is that the assessments having been quashed, there remains no liability of income-tax on the petitioner and, therefore, it is entitled to the refund of pre-paid tax. For this proposition, reliance was placed on a judgment of this court dated December 19, 1984, in Hari Nandan Agarwal (HUF) v. ITO [1986] 159 ITR 816. In that case it was held that where an assessment order is set aside and the matter is remanded to the Income-tax Officer for passing a fresh order, the amounts deposited in pursuance of the assessment order become refundable.