VODAFONE IDEA LTD. (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) versus ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.

Citation: [2020] 11 S.C.R. 200 · Decided: 29-04-2020 · Supreme Court of India · Bench: UDAY UMESH LALIT · Disposal: Dismissed

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Judgment (excerpt)

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SUPREME COURT REPORTS
[2020] 11 S.C.R.
VODAFONE IDEA LTD. (EARLIER KNOWN AS VODAFONE
MOBILE SERVICES LIMITED)
v.
ASSISTANT COMMISSIONER OF INCOME TAX
CIRCLE 26 (2) & ANR.
(Civil Appeal No. 2377 of 2020)
APRIL 29, 2020
[UDAY UMESH LALIT AND VINEET SARAN, JJ.]
Income Tax Act, 1961: s.143(1) and s.143(2) – Exercise of
power under – Distinction between – Held: Under s.143(1), the
matter is processed, only to check whether any apparent
inconsistencies are evident on the face of the return and connected
material which may call for any adjustment while under s.143(2),
the matter is scrutinized after taking into account such evidence as
the assessee may produce – Exercise in s.143(2) is to ensure that
there is no understating of income or overstating of loss or under-
payment of the tax in any manner – The power under sub-section
(1) of s.143 is summary in nature designed to cause adjustments
which are apparent from the return while that under sub-sections
(2) and (3) is to scrutinize the return and cause deeper probe to
arrive at the correct determination of the liability of the assessee –
Telecommunication.
Income Tax Act, 1961: s.143(1) and s.143(2) – In respect of
Assessment Years ending on 31st March 2017 or before, if a notice
was issued in conformity with the requirements stated in sub-section
(2) of s.143 of the Act, it shall not be necessary to process the refund
under sub-section (1) of s.143 of the Act and the requirement to
process the return shall stand overridden.
Income Tax Act, 1961: s.143(1) and s.143(2) – Whether any
intimation is required to be given to the assessee that because of
initiation of proceedings pursuant to notice under sub-section (2)
of s.143, processing of return in terms of sub-section (1) of  s.143
of the Act, would stand deferred –  Held: The processing of return
in terms of sub-section (1A) of s.143 is to be done through centralized
processing and the scope of processing under sub-section (1) of
s.143 of the Act is purely summary in character – Once deeper
[2020] 11 S.C.R. 200
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scrutiny is undertaken and the matter is being considered from the
perspective whether there is any avoidance of tax in any manner,
issuance of notice under sub-section (2) itself is sufficient indication
– Sub-section (1D) of s.143 of the Act does not contemplate either
issuance of any such intimation or further application of mind that
the processing must be kept in abeyance – It would not, therefore,
be proper to read into said provision the requirement to send a
separate intimation– Issuance of notice under sub-section (2) of
s.143 is enough to trigger the required consequence – Any other
intimation is neither contemplated by the statute nor would it achieve
any purpose.
Income Tax Act, 1961: s.241-A – Applicability of – Returns
filed in respect of assessment year commencing on or after the 1st
April, 2017 – s.241-A of the Act requires a separate recording of
satisfaction on part of the Assessing Officer that having regard to
the fact that a notice has been issued under sub-section (2) of s.143,
the grant of refund is likely to adversely affect the revenue;
whereafter, with the previous approval of the Principal Commissioner
or Commissioner and for reasons to be recorded in writing, the
refund can be withheld –  Since the statute now envisages exercise
of power of withholding of refund in a particular manner, for
assessment year commencing after 01.04.2017 the requirements of
Section 241-A of the Act must be satisfied.
Income Tax Act, 1961: s.241-A – Withholding of refund –
Whether insofar as AY 2017-18 is concerned, the order dated
14.03.2019 u/s.241-A satisfies the required statutory parameters
or not – Held:In terms of second proviso to sub-section (1) of s.143
of the Act, the required intimation under said sub-section must be
given before the expiry of one year from the end of the financial
year in which the return is made – In respect of AY 2017-18, the
return having been filed on 25.11.2017, period available in terms
of said second proviso was upto 31.03.2019, without taking into
account the fact that revised return was filed on 13.07.2018 – In
this case, the exercise of power on 14.03.2019 was not only after
issuance of notice under sub-section (2) of s.143 and after recording
due satisfaction in terms of s.241-A of the Act, but was also well
within the period contemplated by sub-section (1) of s.143 of the
Act for causing due intimation.
VODAFONE IDEA LTD. (EA

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