JUDGMENT
P.A. Mohammed, J.
1. The petitioner is a partner of firm called “Messrs. A & P Corporation”. It was an assessee on the file of the Income-tax Officer, Ward-2, Kottayam. It filed a return for the year 1975-76 declaring a net income of Rs. 78,010 and paid tax in respect of the said income. Likewise for the year 1976-77, the petitioner filed a return declaring net income of Rs. 76,190 and paid tax in respect of the said income. These returns had been submitted in view of the provisions contained in Section 140A of the Income-tax Act, 1961 (for short “the Act”). However, the Income-tax Officer determined the income for the years
1975-76 and 1976-77 under the regular assessment. For the assessment year, 1975-76, the officer determined the income of the firm as Rs. 1,26,360 and for the year 1976-77, as Rs. 1,04,838. Being aggrieved by the additions made by the officer, the assessee filed appeals and the Commissioner of Income-tax set aside the additions made by the Income-tax Officer. Exhibit P-1 is the copy of the order passed by the Commissioner of Income-tax in the appeals. Since fresh assessments were not made pursuant to exhibit P-1 order, the petitioner filed exhibit P-2 representation before the Commissioner on May 6, 1988. Thereafter, the Income-tax Officer passed exhibit P-3 order on the basis of the direction issued by the Commissioner of Income-tax. As against the said order, the petitioner filed exhibit P-4 revision petition before the Commissioner and the Commissioner finally passed exhibit P-5 order under Section 264 of the Income-tax Act. In this writ petition, the petitioner seeks to quash exhibit P-5 order passed by the Commissioner and also for a direction to refund the amount paid for the years 1975-76 and 1976-77.
2. Heard learned counsel for the petitioner and standing counsel for the Income-tax Department.
3. There is no dispute as to the refund of tax which was levied on the income added by the Income-tax Officer at the time of regular assessment. The only dispute involved in this case is with regard to the refund of tax on the income returned as per the self-assessment. Section 140A of the Act deals with self-assessment. Sub-section (1) of the said section provides that where any tax is payable on the basis of any return required to be furnished under Section 139 or Section 142 or, as the case may be, Section 148 after taking into account the amount of tax, if any, already paid under any provision of the Act, the assessee shall be liable to pay such tax before furnishing the return and the return shall be accompanied by proof of payment of such tax and interest, if any. What is contemplated under Section 140A is payment of tax on the admitted income furnished in the self-assessment and the payment of tax on such income before furnishing the return. As aforesaid, the petitioner had paid the tax before submitting the return under Section 140A. That the setting aside of the regular assessment does not mean that the self-assessment made under Section 140A has been set aside. Even if the regular assessment is declared to be void, it has no effect on the self-assessment made under Section 140A. The direction to refund the tax paid on regular assessment does not mean that the tax paid along with the return under Section 140A shall be refunded, because the payment of tax under self-assessment is on the admitted income returned by the assessee. When tax has been paid on the admitted income, even if the income added by the Income-tax Officer by way of addition in the regular assessment has been set aside in appeal or revision, the assessee has no legal right to claim
refund of the tax so paid because what has been set aside is not the self-assessment but the regular assessment. Both the assessments are separate and distinct and there is no question of merger of self-assessment with regular assessment.
4. The Division Bench of the Allahabad High Court in Jagannath Rameshwar Prasad v. ITO, [1974] 93 ITR 16 observed (page 18) ;
“Moreover, if the regular assessment is a void proceeding and, therefore, non est, the amount paid towards the provisional assessment continues to bear that character and cannot be deemed to have been paid towards the regular assessment.”
5. The Full Bench of the Punjab and Haryana High Court in R.A. Boga v. AAC of I.T., [1977] 110 ITR 1 observed that if a regular assessment was set aside for any reason, it would not follow that the provisional assessment also stood set aside. The Full Bench of the Gujarat High Court, directly on the question of payment of tax under Section 140A of the Act, observed in Saurashtra Cement and Chemical Industries Ltd. v. ITO, [1992] 194 ITR 659 thus (page 674) :
“The tax payable on the basis of the returns filed by the assessee is treated as ‘assessed tax’. It is not at all made dependent on any regular assessment being made though, in the event of regular assessment, the amount paid under Sub-section (1) of Section 140A is deemed to have been paid towards the regular assessment. Therefore, by no stretch of imagination, can the tax paid and collected under Section 140A be described as a mere ad hoc or interim payment which can be said to fail in the absence of a regular assessment, as was sought to be contended on behalf of the petitioners.”
6. The Commissioner in exhibit P-5 has sufficiently found that the dispute in the original assessment was regarding the additions made in the assessments, and the original assessments had been set aside in respect of the additions made. That being the position, I do not see any justifiable ground to interfere with the order passed by the Commissioner. The retention of the tax paid on self-assessment on the basis of income returned by the assessee is perfectly in order. The original petition is accordingly dismissed.