BHANDARI R S Vs. INCOME TAX DEPARTMENT

JUDGEMENT

(1.) IN the present writ petition, the petitioner has challenged the action of the INcome-tax Department in not issuing advice to the bank for refund of the amount of Rs. 33,67,369 for which refund voucher No. 519850 was issued on April 26, 1994. A prayer has further been made that the amount of refund may not be given to the Excise Department.

(2.) THE brief facts of the case are that Messrs. Sher Mohammad Faizu Khan and party filed a return of its income for the year 1991, showing 49 persons as members of the association. THE petitioner is one of such members having a five per cent. share. THE assessment order which was passed was modified in appeal, as a result of which Rs. 33,67,369 was refundable. THE said amount was withheld under Section 241 of the Income-tax Act, 1961, till March 31, 1994, or till the decision in second appeal by the Department before the Income-tax Appellate Tribunal, whichever is earlier. THE second appeal was not decided by the Tribunal and therefore after expiry of the aforesaid period, i.e., March 31, 1994, a request for refund of the said amount was made and accordingly the refund voucher for Rs. 33,67,369 was issued. Before issuing the advice, a letter was received by another member of the association of persons, namely, Faizukhan, that the power of attorney of Shri G.M. Mehta, chartered accountant, who has moved for refund has been withdrawn, vide letter dated April 26, 1994. On April 27, 1994, Shri Faizukhan informed that the refund should not be given to Shri Bhandari or any person including his chartered accountant or authorised representative. THE Chief Commissioner of Income-tax telephonically advised the Deputy Commissioner (Assessment) for withholding the refund/advice. It appears that the Excise Department of the State of Rajasthan issued the attachment order on May 2, 1994, and Shri Sher Mohammad and Faizukhan have written to the Income-tax Department to make the payment to the Excise Department. An order under Section 241 of the Income-tax Act was passed on July 26, 1994, for withholding the refund till the decision of the Income-tax Appellate Tribunal. THE Excise Department was also impleaded as a party. In respect of the Nimkathana Group of shops for the year 1992-93, the Jhunjhunu-Chirawa Group of shops for the years 1989-90 and 1990-91 and the Udaipur City Group of shops for the year 1992-93 certain dues are said to be outstanding against which the attachment orders were issued by the Excise Department. Mr. Rathore, on behalf of the Excise Department, has submitted that the petitioner is only one of the members of the association of persons and when the other members have given in writing for adjustment of the refund against the liability ; he alone cannot have any objection and the amount should be directed to be refunded to the Excise Department.

(3.) THE question as to whether the petitioner alone could have moved for grant of refund or the refund order could have issued only on his application when the other members of the association have taken a contrary stand and are of the view that the amount of refund should be adjusted against the liability of the Excise Department need not be adjudicated as under Section 237 of the Act, the Assessing Officer shall have the power to determine as to who is the person entitled for refund as well. THE question as to whether the account opened in the name of the association of persons by the petitioner is a fraud on the other members of the association of persons and the said account was opened without their consent is also not being adjudicated for the reason that the writ petition itself is found to have become infructuous.