SHREYANS INDUSTRIES LTD Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) Petitioner, a company incorporated under the Companies Act, is engaged in the manufacture of cotton yarn and paper in its unit at Machiwara. and Ahmedgarh in the State of Punjab. It is an assessee under the IT Act for the last many years with permanent account No. 28-050-CO-4964.

(2.) Written statement has been filed on behalf of the respondents. The case of the respondents is that the appeal against the order of assessment dt. 3rd Sept., 1996, is pending before the Tribunal, Chandigarh, and, therefore, it has not attained finality. The AO sent a proposal to the CIT by giving his opinion that the issue of refund to the assessee will adversely effect the interest of the Revenue. The CIT approved the withholding of the said refund vide letter dt. 21st Nov., 190.6, Copy Annexure R-2. The CIT is not required to pass an order, but is only required to approve or disapprove the proposal of the AO. Since the CIT is not required to pass any order withholding the refund, the question of supplying a copy of the order to the assessee did not arise. The amount has been withheld after getting approval from the CIT and the said approval has been granted after due application of mind to the proposal sent by the AO. In para 19 of the written statement, it is sought to be highlighted that some amounts were due from the petitioner for some other assessment years, which were paid later on and a part of that amount was adjusted from the amount of refund and ultimately it has been sought to be justified that the petitioner is not entitled to the refund at this stage and no prejudice is caused to the assessee by withholding of the refund inasmuch as, if the Departmental appeal fails, the assessee is entitled for refund along with interest under s. 244A of the IT Act.

(3.) In order to understand the controversy raised, 'it is necessary to notice the provisions of s. 241 of the IT Act,