CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 1 REPORTABLE IN SUPREME COURT OF INDIA CIVIL APPELLATE JURISDICTION Civil Appeal No.2377_ of 2020 Arising out of SLP(Civil) No.1169 of 2019 VODAFONE IDEA LTD. (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED)APPELLANT(S) VERSUS ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR. .RESPONDENT(S) JUDGMENT Uday Umesh Lalit. J. 1. Leave granted. 2. This appeal arises out of final judgment and order dated 14.12.2018 passed by High Court1 in Writ Petition (Civil) No.2730 of 2018 preferred by appellant herein. 3. facts leading to filing of this appeal, in brief, are as under:- 1 High Court of Delhi at New Delhi CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 2 A] appellant-Vodafone Idea Ltd. (earlier known as Vodafone Mobile Services Ltd or VMSL for short) is engaged in providing telecommunication services in different circles. a) By amalgamation which came into effect on 01.04.2011, four group entities: Vodafone Cellular Ltd., Vodafone Digilink Ltd., Vodafone East Ltd. and Vodafone South Ltd. got merged in VMSL. b) By second scheme of amalgamation, two other group entities: Vodafone Spacetel Ltd. and Vodafone West Ltd. got merged in VMSL w.e.f. 01.04.2012. c) While proceedings in instant case were pending, by scheme of arrangement2 between VMSL and Idea Cellular Ltd. Vodafone Idea Ltd. - resultant company assumed all rights and liabilities of amalgamating/transferor companies. Most of factual developments in matter, as set out hereafter, were before said scheme of arrangement. 2 Formulated by Order dated 19.1.2018 passed by National Company Law Tribunal, Mumbai and order dated 11.1.2018 by National Company Law Tribunal, Ahmedabad. CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 3 3 B] For AY 2014-15, appellant filed Income Tax Return (ITR, for short) on 30.09.2014 claiming refund of Rs.1532.09 Crores. On 31.08.2015, notice under Section 143(2) of Act4 was issued to appellant in respect of AY 2014-15. On 01.11.2015, appellant filed ITR for AY 2015-16 claiming refund of Rs.1355.51 Crores. notice under Section 143(2) of Act was issued by Department on 16.03.2016 in respect of AY 2015-16. revised return was filed by appellant on 31.03.2016 in respect of AY 2014-15. appellant entered into Advanced Pricing Agreement with CBDT 5 under Section 92 CC of Act. Thereafter, further revised return was filed on 25.11.2016 for AY 2015-16 and modified return in terms of Section 92 CD of Act was filed by appellant on 22.02.2017 for AY 2014-15. C] For AY 2016-17, appellant filed ITR on 30.11.2016 claiming refund of Rs.1128.47 Crores. notice under Section 143(2) of Act was issued to appellant on 03.07.2017 for AY 2016-17. D] For AY 2017-18, ITR was filed by appellant on 25.11.2017 claiming refund of Rs.743 Crores. 3 Assessment Year 4 Income Tax Act, 1961 5 Central Board of Direct Taxes CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 4 E] Submitting that there was complete inaction on part of respondents in processing ITRs filed by appellant and in issuing appropriate refund to appellant, Writ Petition (Civil) No.2730 of 2018 was filed by appellant in High Court, praying for following principal relief. "a. Writ of Mandamus or Writ, Order or Direction in nature of Mandamus, or any other appropriate Writ, Order or Directiion under Article 226 / 227 of Constitution of India directing Respondents to process and grant refunds for AYs 2014-15 to 2017-18, along with interest under Section 244A of Act;" F] On 03.07.2018, respondent No.1 filed affidavit in reply submitting inter alia that ITRs of appellant raised multiple issues like Transfer Pricing Adjustment, Capitalization of Licence Fees, 3G Spectrum Fees, Asset Restoration Cost Obligation including effect of amalgamation of group entities which required thorough scrutiny and determination. G] During pendency of said Writ Petition, letter was issued by respondent No.1 on 23.07.2018, relevant portion of which was as under :- "The assessment years for which request has been made to process return under Section 143(1) are already under scrutiny for AY 2012-13, AY 2013-14, AY 2014-15, AY 2015-16 and AY 2016-17. I would CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 5 like to draw your attention to Section 143(1D) of Income Tax Act: (1D) Notwithstanding anything contained in sub-section (1), processing of return shall not be necessary, where notice has been issued to assessee under sub-section (2) case is under compulsory scrutiny for AY 2017- 18 and as per section 241A of Income Tax, Act 1961: "For every assessment year commencing on or after 1st day of April, 2017, where refund of any amount becomes due to assessee under provisions of sub-section (1) of Section 143 and Assessing Officer is of opinion, having regard to fact that notice has been issued under sub-section (2) of Section 143 in respect of such return, that grant of refund is likely to adversely affect revenue, he may, for reasons to be recorded in writing and with previous approval of Principal Commissioner or Commissioner, as case may be, withhold refund up to date on which assessment is made." Considering, pending special audit, pending scrutiny, pending demands of amount of more than 4500 crore, it will prejudicial to interest of revenue to process returns without completion of pending scrutiny cases. Therefore, exercising powers under section 143(1D) of Income Tax Act, 1961 and under Section 241A of Income Tax Act, 1961, undersigned decline processing of returns under Section 143(1). above decision has been taken after taking into cognizance order of Honorable High Court of Delhi in TATA TELESERVICES LIMITED versus CENTRAL BOARD OF DIRECT TAXES & ANR. dated 11.05.2016 in para 24 of judgment: "The question whether such return should be processed will have to be decided by ASSESSING OFFICER concerned exercising his discretion in terms of Section 143 (1D) of Act." H] In meantime, on 13.07.2018 revised return was filed by appellant for AY 2017-18 claiming refund of Rs.744.94 Crores. notice CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 6 under Section 143(2) of Act was issued to appellant on 10.08.2018 for AY 2017-18. I] On 31.08.2018, VMSL merged with Idea Cellular Ltd. and resultant company was named Vodafone Idea Ltd. J] By its judgment and order dated 14.12.2018, High Court dismissed said Writ Petition. J-1] submissions of appellant were recorded as under:- "8. Vodafone also place reliance on decision of this Court in Tata Teleservices Limited vs. CBDT, 386 ITR 30 and Bombay High Court in Group M Media India (P) vs. Union of India, 2016 SCC OnLine Bom 13624, which held that return should be processed within year and only where assessing officer is of view that issuance of refund would be detrimental to collection of demands which may arise, he may invoke provision of Section 143(1D) of Act. 13. With respect to delay in processing of tax return, Vodafone places reliance on decision of this Court in Tata Teleservices Limited vs. Central Board of Direct Taxes (supra), and decision of Bombay High Court in Group M Media India (P) vs Union of India (supra), where it was held that return should be processed within year and only where assessing officer is of view that issuance of refund would be detrimental to collection of demands that may arise, he may invoke provision of Section 143(1D) of Act. From perusal of Section 241A of Act, it is evident that all tax returns are necessarily to be processed within time period as prescribed under Section 143(1) of Act. In instant case, it is note-worthy that CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 7 time period prescribed under Section 143(1) of Act has expired and there has been no correspondence from revenue that discretion under Section 143(1D) was exercised. 17. It was contended that after lapse of one year period, by reason of second proviso to Section 143 (1), right to claim refund is vested in any assessee. Counsel argued that this is independent of Revenue's power to issue scrutiny notice under Section 143 (2), for which period of limitation is longer. However, if Assessing Officer does not issue any notice, or intimation, if assessee can claim refund, that right is statutorily vested one if, within said period of one year, reasoned order is not made under Section 143 (1D) within said one year period." J-2] On other hand, submissions on behalf of respondents were :- "19. revenue denies allegations of deliberate omission to refund amounts aggregating to Rs.4759.74 crores along with applicable interest and states that income tax returns were not processed under Section 143(1). assessment years under consideration were picked up for scrutiny under Section 143(3) and there is prima facie likelihood of substantial demand being raised by Income Tax Department, as has been done earlier in Vodafone's earlier case. Further, revenue submitted that in Vodafone's own case for AY 2011-12 wherein returned loss was Rs. 33,93,397 and subsequently, income determined by Assessing Officer was Rs.546,64,25,250/-. 21. Counsel for Revenue contended that for relevant period under consideration, Assessing Officer has already issued notice under sub-section (2) of Section 143 within time. As per then prevailing provision, it was thereafter not necessary CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 8 for Assessing Officer to proceed under sub-section (1) of Section 143. Further, Ld. Counsel placed reliance on Section 143(1D) of Act to explain that refund has not been processed till date. Ld. Counsel urged that sub-section (1D) of section 143 which starts with non-obstante clause provided that notwithstanding anything contained in sub-section (1), processing of return shall not be necessary before expiry of period specified in second proviso where notice has been issued to assessee under Section 143(2). provisio to Section 143 (1D) provided that such return shall be processed before issuance of order under sub-section (3). Therefore, Section 143 (1D) overrides Section 143 (1). Therefore, counsel submitted that under Section 143(1D) of Act, processing of return shall not be necessary, where notice has been issued under Section 143(2) of Act. 22. Counsel placed on record letter F.No.ACIT/C-26(2)/2018-19/216 dated 23.07.2018. It is in response to multiple communications by assessee for expeditious processing of returns for different AYs. order informs that cases are pending for scrutiny as follows; for AY 2012-13 and 2013-14, assessment is under special audit and for AY 2014-15, assessee approached AAR and lastly, returns for AYs 2015-16 and 2016- 17, are under scrutiny. assessment years for which request has been made to process return under Section 143(1) are already under scrutiny for various AYs. Therefore, exercising power under Section 143(1D), Assistant Commissioner declined processing of returns under Section 143(1). Further, case is under compulsory scrutiny for AY 2017-2018, exercising power Section 241A, Assistant Commissioner declined processing of returns under Section 143(1) .." J-3] After considering rival submissions, relevant statutory provisions and decisions relied upon, High Court observed:- CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 9 "29. In facts of present case, issue canvassed is on interpretation of Section 143 (1D) of Act. It is first necessary to refer to statutory provisions and thereafter consider effect of such provisions on Vodafone's request for refund for said assessment years. On reading of Section 143 of Act, it is apparent that when returns are filed either under Section 139 or pursuant to notice under Section 142(1), Section 143(1) mandates that returns shall be processed in manner prescribed in clauses (a) to (e) thereof. processing of return thus involves determination of total income or loss, tax and interest, if any, payable and sum payable by, or amount of refund due to assessee. Section 143(1)(d) stipulates that intimation shall be prepared or generated and sent to assessee specifying sum determined payable by, or amount of refund due to assessee under clause(C). Section 143 (1) (e) provides that amont of refund due in pursuance of determination under clause (C) shall be granted to assessee. reading of proviso to Section 143 (1) reveals that it mandates that intimation as provided in Section 143 (1) (d) should be issued before expiry of one year from end of financial year in which return is made. Before proceeding to Section 143(1D) as it stood at relevant time, it is essential to refer to Section 143 (2) and (3). Sub-section (2) contemplates issuance of notice in contingency covered by said provision. Sub-section (3) provides that once such notice is served, after following procedure laid, Assessing Officer is required to pass order in writing making assessment of total income or loss and determine sum payable by assessee or refund of any amount due to him on basis of assessment. It is also relevant to notice that whether it is processing of return under Section 143(1) or order under Section 143(3) is subject to same time limit, i.e. Section 153(1). 39. reading of above judgments and relevant provisions, clearly shows that Section 143(2) empowers, Assessing Officer to issue notice to assessee to produce documents or other evidence, to CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 10 prove genuineness of income tax return. Under Section 143(1D) of Act introduced by Finance Act, 2012 processing of return under Section 143 (1)(a) is not necessary where notice has been issued under Section 143(2) of Act. This provision has now been amended by Finance Act, 2016 (with effect from AY 2017-18) to provide that if scrutiny notice is issued under Section 143(2), processing of return shall not be necessary before expiry of one year from end of financial year in which return is submitted. 40. assesse's argument in these proceedings is that once one year period in proviso to Section 143(1) ends, return - and whatever calculations are contained in it, with respect to tax liability as well as consequential refunds, become final, subject to only one event: issuance of notice under Section 143 (2). 41. To this Court, it appears that net effect of Tata Teleservices (supra) is that revenue cannot be inactive, in cases where assessee claims refund, and one year period is over (under proviso to Section 143(1) ends. Assessing Officer has to apply his mind to consider whether facts and circumstances of case, warrant some or all of refund of assessee s amounts, or if all of it needs to be withheld, whenever assessee presses for refund. This exercise should be undertaken promptly, keeping in mind time limit under normal provision of Section 143(1) expires. This Court held in Tata Teleservices Ltd. (supra) and Bombay High Court in case of Group M Media India (P) Ltd. (supra) that it would be wholly inequitable for Assessing Officer to merely sit over petitioner s request for refund citing availability of time up to last date of framing assessment under Section 143 (3). proper interpretation of statute and situation in such case would be, Assessing Officer should take up expeditious disposal of question once assessee requests for release of refund. CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 11 44. Now in this case, acknowledgement or intimation had not been sent by Assessing Officer. There is no doubt that period of one year indicated in second proviso to Section 143 (1). However, Section 143 (1D) begins with non-obstante clause that overbears that provision. Tata Teleservices (supra) and Bombay High Court ruling in Group M Media India (supra) state that fact that regular assessment is resorted to, does not ipso facto mean that in every case, Assessing Officer has to refuse refunds or there is automatic bar to refunds. Assessing Officer has to apply his mind and make order keeping in perspective facts of case. 45. In this case, revenue has relied on order dated 28.07.2018, which inter alia, stated that "considering pending special audit, pending scrutiny, opening demands of amount more than 4500 crore, it will be prejudicial to interest of revenue to process returns without completion of pending scrutiny cases. Therefore, exercising powers under Section 143(1) and under Section 241A of Act, undersigned decline processing of returns under Section 143(1)." senior counsel for Vodafone had attacked reliance on this order, stating that it was made later. However, that is aspect this Court cannot go into. Facially, order contains reasons. Therefore, unlike Tata Teleservices, reasoned order was made; that decision was based on circular, which fettered Assessing Officer's discretion. Therefore, CBDT circular was set aside. 49. As far as argument that expiry of one year period, per second proviso to Section 143(1) resulting in finality of intimation of acceptance, this Court is of opinion that deeming provision in question, i.e. Section 143 (1) (d) only talks of two eventualities: "shall be deemed to be intimation in case where no sum is payable by, or refundable to, assessee under clause (c), and where no adjustment has been made under clause (a). Secondly, that intimation or acknowledgement cannot confer any greater right than for assessee to ask Assessing Officer to process refund and make over money; it is up to Assessing Officer - CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 12 wherever possibility of issuing notice under Section 143 (2) exists, or where such notice has been issued, to apply his mind, and decide whether given nature of returns and potential or likely liability, refund can be given. It does not mean that when assessment - pursuant to notice under Section 143(2) is pending, such right to claim refund can accrue. This Court also recollects decision of Supreme Court in Deputy Commissioner of Income Tax v Zuari Estate Development & Investment Co Ltd. 2015 (15) SCC 248 which held that intimation under Section 143 (1) is not to be considered as assessment." K] On 27.12.2018 and 31.12.2018, Draft Assessment Orders in terms of Section 144 C of Act were passed for AY 2014-15 and AY 2015-16 respectively. L] In Special Leave Petition (from which this appeal arises) questioning aforesaid decision of High Court, notice was issued by this Court on 18.01.2019. In affidavit in reply, respondents asserted:- "7. That having extracted relevant provisions, it would be relevant to state that petitioner itself has made several averments before High Court that is facing "precarious financial conditions" with accumulated loss of Rs.5,557 crores and debts amounting to Rs.53,000 crores as on 31.03.2017". It is equally pertinent to state that Respondent- Revenue had filed counter affidavit on 3rd July, 2018 against Writ Petition in High Court of Delhi wherein it has been categorically averred that there are huge pending demands against petitioner herein more than of Rs.5000 Crores. contents of Counter Affidavit before High Court may be treated as part and parcel of present Affidavit. It CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 13 has been stated that multiple issues on which addition have been made giving rise to demand liabilities, and several of such issues are also recurring in nature. 10. That it is also submitted that order dated 23rd July, 2018 passed by Assessing Officer is order under Section 143(1)(D) for assessment years 2012-13 to 2016-17 as evident from bare reading of said order giving reasons for refusal of refund claimed by Vodafone Mobile Service Limited. As far as refusal of refund claimed for A.Y. 2017-18 is concerned, said order draws its power under Section 241A of Act as clearly stated in order dated 23rd July, 2018." Reference was made to various pending proceedings where demands raised for earlier assessment years were stayed and it was stated:- "24. That it is wrong to say that letter/order dated 23.07.2018 issued by Respondent No.1 u/s 143(1D) and 241A of Income Tax Act, 1961 is beyond limitation, bereft of any cogent reasoning and without jurisdiction as letter/order was issued for good reasons to protect interest of revenue which is reflected vide Para 45 of impugned judgment. reasoning was based upon pending special audit, pending scrutiny and pending demands of more than Rs.5000 crore. Further, letter/order was not beyond limitation because Section 143(1D) starts with non-obstante clause, which is over and above provisions of Section 143(1), which has been discussed in Para 44 of impugned judgment." M] On 14.03.2019 intimation was sent to appellant by respondent No.1 regarding withholding of refund for AY 2017-18. It stated about demand status for earlier assessment years as under :- CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 14 A.Y. Nature of Demand Amount of Demand Amount already Balance Raised u/s 143(3)/154 paid/ Adjusted Outstanding 2008-09 Corporate Tax 84,91,27,579/- 10,00,00,000/- 74,91,27,579/- assessment u/s 143(3) 2009-10 Corporate Tax 2,42,86,76,260/- 97,36,82,990/- 1,45,49,93,270/- Assessment u/s 143(3) 2010-11 Corporate Tax 3,36,22,76,980/- 60,00,00,000/- 2,76,22,76,980/- Assessment u/s 143(3) 2010-11 Corporate Tax 1,65,14,76,430/- 1,65,14,76,430/- Assessment u/s 143(3) 2011-12 Corporate Tax 2,11,61,29,711/- 2,11,61,29,411/- Assessment u/s 143(3) Thereafter, it went on to state:- "It is also to be noted that earlier refund was withheld vide notesheet dated 23.07.2018 after due approval due to non-availability of proceeding of return facility in ITBA for AY 2017-18 which was intimated to assessee vide letter dated 23.07.2018. In view of above discussion there is sufficient reason to believe that issue of refund will negatively impact interest of revenue. Therefore, proposal for withhold refund for AY.2017-18 was forwarded again to Pr. Commissioner of Income Tax-09, Delhi and same has been approved. Approval on note sheet was taken as well as procedure for approval through ITBA was also followed for withholding of refund which also involves approval from PCIT-09. approval for withholding of refund u/s 241 was taken from PCIT-9 which was sent through proper channel through Addl. CIT Range 26. In view of facts above you are hereby intimated that refund of A.Y.2017-18 in case of M/s Vodafone Mobile Service Limited has been withhold u/s 241A of Income Tax Act, 1961 till completion of scrutiny proceedings u/s 143(3) or 144C r.w.s. 143(3) of Income Tax Act, 1961." N] Objections raised by appellant against Draft Assessment Orders issued on 27.12.2018 and 31.12.2018 were disposed of on 20.09.2019. Thereafter, Final Assessment Orders under Section 143 (3) CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 15 of Act were passed on 31.10.2019 for AY 2014-15 and 2015-2016, whereunder appellant was held entitled to refund of Rs.733 Crores (approximately) in respect of AY 2014-15, whereas for AY 2015-2016 claim for refund was rejected and demand in sum of Rs.582 Crores (approximately) was raised. In appeal preferred by appellant, said demand for AY 2015-16, has, since then, been stayed by Income Tax Appellate Tribunal. 4. relevant dates and factual developments as stated above, can be summarized in tabular form as under:- Assessment Date of filing of Notice ITR Filing of Modified Draft Order by DRPFinal dis-posing ofOrder objections of appe-llant year u/s Revised Return in Assess against order u/sec. Assess144C u/s.143 143(2) Return terms of -ment -ment (1D) S.92CD Order Order u/s. u/s. 144C 143(3) 2014-15 30.9.2014 31.8.2015 31.3.2016 22.2.2017 27.12.2018 20.9.2019 31.10.2019 23.7.2017 (Refund: (Refund: Rs.1532 Cr Rs.733Cr. Approx.) Approx.) 2015-16 1.11.2015 16.3.2016 25.11.2016 31.12.2018 20.9.2019 31.10.2019 23.7.2018 (Refund: (Demand: Rs.135 Rs.582 Cr. 5 Cr Approx.) Approx.) 2016-17 30.11.2016 3.7.2017 23.7.2018 (Refund: Rs.1128 Cr. Approx.) 2017-18 25.11.2017 10.8.2018 13.7.2018 14.3.2019 (Refund: Rs.745 Cr Approx.) 5. In this appeal, we heard Mr. J.D. Mistri, learned Senior Advocate for appellant and Mr. Zoheb Hossain, learned Advocate for respondents. During course of arguments, it was accepted by CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 16 respondents that insofar as AY 2017-18 was concerned, order dated 23.07.2018 passed under Section 143(1D) of Act was without jurisdiction, as by that time no order was passed under Section 143(2) of Act for concerned Assessment Year. It was submitted that in circumstances, fresh order was passed on 14.03.2019 after due compliance of statutory requirements. In order to verify developments leading to passing of order dated 14.03.2019, concerned record was summoned and perused. Court was satisfied that all antecedent steps leading to said order were taken in accordance with law and settled practice. affidavit was also filed on behalf of respondents explaining in detail developments leading to passing of order dated 14.03.2019 and issuance of intimation dated 09.04.2019. It was stated: That as per CPC accounting of return was completed on 9th April, 2019 and intimation u/s 143(1) was generated on 9th April, 2019. It is also evident from Page 1 of intimation dated 09.04.2019 that contrary to allegations of Petitioner that intimation u/s 143(1) was never communicated to them, it is submitted that intimation u/s 143(1) was sent to email address provided by assessee, that is, atul.goel@vodafoneidea.com.. That it was in this background that screen-shot relied upon by assessee during course of hearing shows that ITR was processed on 09.04.2019. CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 17 intimation under Section 143(1) was made on 09.04.2019 and said intimation stated that refund determined under Section 143(1) in said intimation has been withheld as per proviso of Section 241A and that refund if any will be released on completion of assessment under Section 143(3)/144(4) as case may be along with interest under Section 244A and subject to adjustment of arrears demand, if any under Section 245. In view of above, it is submitted that CPC has adopted due process prescribed by ITBA-ITR Processing Instruction No.5 dated 14.12.2018. As per said process, refund determination is complete immediately after recommendation of total income tax and matching of tax credits is completed at CPC system. At this stage refund determination is communicated by CPC, Bangalore to AO through ITBA module. Once refund is approved/withheld/blocked by AO, CPC will complete accounting of record and act according to other processes involved like Section 245 of I.T. Act i.e. adjustment of refund determined against tax arrears due. 5.1 One more development must also be adverted to. In hearing dated 08.01.2020, reliance was placed on order dated 28.12.2019 passed in connection with M/s Idea Cellullar Ltd. It was therefore observed by this Court: During course of hearing, Mr. Zoheb Hossain, learned counsel appearing for Revenue produced copy of order dated 28.12.2019 passed in connection with Idea Cellular Limited (with which entity appellant now stands merged). Mr. Hossain submitted that order dated 28.12.2019 will have bearing on issue insofar as refund CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 18 payable to present appellant in respect of assessment year 2014-15 is concerned. We direct Department to place on record copy of order along with such submission as Department wishes to place on record. Let submissions by way of affidavit be filed within seven days from today. appellant shall have liberty to respond to those submissions within next seven days. copy of order dated 28.12.2019 placed on record indicates that for Assessment Year 2016-17 demand in sum of Rs.2824.99 crores has been raised against appellant. After conclusion of oral hearing, parties also filed their written submissions. 6. It was submitted by appellant: In facts of present case, admittedly, for AYs 2014-15 to 2016-17 (for which provisions of Section 143(1D) of Act are relevant), Respondent has neither processed return of income for said years by last date, viz. 31.03.2018 nor did Respondent exercise discretion provided under Section 143(1D) of Act by that. As per Respondents own submission, such discretion under Section 143(1D) of Act was only exercised vide letter/order dated 23.07.2018, which admittedly is beyond limitation period. Therefore, exercise of such discretion, having been made beyond limitation is nullity in eyes of law and, hence, no cognizance can be taken of such letter/order. CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 19 Insofar as Assessment Year 2017-18 is concerned, Respondents during course of arguments, before this Hon ble Court have admitted that order dated 23.07.2018 was without jurisdiction because on that date, neither return of income was processed, nor notice under Section 143(2) issued, warranting exercise of powers under Section 241A of Act. On that ground alone, Impugned Order insofar as Assessment Year 2017-18 is concerned should be set aside and refund claimed for that year should be granted with interest Having admitted that Order dated 23.07.2018 was without jurisdiction, Respondent set up alternate case that time limit for processing return of income expires on 31.03.2020 and, therefore, proceedings for AY 2017-18 are inchoate and no direction may be issued for that year. When it was pointed out that processing has already been completed vide intimation dated 09.04.2019, Respondent changed its stand and argued that letter dated 14.03.2019 was issued after filing of counter affidavit before this Hon ble Court on 06.03.2019, seeking to again exercise powers under Section 241A of Act. Admittedly, as per e-filing portal of Income Tax Department, and intimation produced by Respondent before this Hon ble Court on 08.01.2020, processing of return for AY 2017- 18 was completed only on 09.04.2019 and, therefore, alleged exercise of power under Section 241A on 14.03.2019 is without jurisdiction since it suffered from same vice as Order dated 23.07.2018, i.e. refunds could not have been withheld under Section 241A prior to processing of return of income ... Without prejudice to submission that Order dated 23.07.2018 issued for AYs 2014-15 to 2016- 17 was without jurisdiction, having been issued beyond limitation and Orders dated 23.07.2018 and 14.03.2019 invoking jurisdiction under Section 241A of Act for AY 2017-18 have no sanctity of law since sine qua non for invoking that Section, i.e. processing of return was completed on 09.04.2019, even on merits, neither Order dated 23.07.2018 nor order dated 14.03.2019 disclose CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 20 any grounds on which powers under Section 143(1D) or Section 241A of Act could have been invoked. 7. respondents submitted: On merits, it is submitted that if AO issued Notice u/s 143(2) within time limit i.e. 6 months from end of financial year in which return was filed, then there is no longer requirement to process return under Section 143(1). That being position of law laid down by Hon ble Supreme Court, discretion under Section 143(1D) can be exercised at any point prior to passing of final assessment order. entire objective of not processing return after issuance of scrutiny notice is that in cases where there is likelihood of substantial demands, there should not be compulsion on Revenue to issue refunds. There is no anomaly in above legislative scheme which warrants dilution of non-obstante clause and to read into Section 143(1D) limitation which legislature has not prescribed ... It is well settled that non-obstante clause is legislative device which is employed to give overriding effect to some or all contrary provisions and as such, operation of non-obstante clause cannot be limited in any manner and must be given its full effect High Court at para 44 has categorically held that since Section 143(1D) begins with non-obstante clause, it will overbear/override second proviso to Section 143(1) which contains limitation period of one year for precession of return. Without prejudice to submission that merits of order dated 23.07.2018 as well as order dated 14.03.2019 has never been assailed by Petitioner before any forum, nor any arguments advance during hearing before High Court and that same cannot be raised for first time before this Hon ble Court in SLP, it is submitted that AO had CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 21 withheld refund in all these years for cogent and valid reasons, in interest of revenue, subject to final scrutiny assessment proceedings. It is submitted that scope of judicial review against such order where AO has exercised his discretion would be limited and any interference can only be done if such exercise of power is either wholly capricious or without any valid reasons. 8. inter-relation between sub-sections of Section 143 of Act, as Section then stood, was subject matter of discussion by this Court in CIT v. Gujarat Electricity Board6 which in turn referred to decision of Gujarat High Court in Gujarat Poly Avx Electronics Ltd. v. Dy. Commissioner of Income Tax (Asstt.)7. This Court observed: 5. learned counsel appearing for respondent have pointed out that in number of judgments several High Courts have consistently taken view that once regular assessment proceedings have commenced under Section 143(2) of Income Tax Act, 1961, it is limitation on jurisdiction of assessing officer to commence proceedings under Section 143(1)(a) of Act. 6. Even, otherwise, view taken by Gujarat High Court seems to be correct on principle. There is no dispute that Section 143(1)(a) of Act enacts summary procedure for quick collection of tax and quick refunds. Under scheme if there is serious objection to any of orders made by assessing officer determining income, it is open to assessee to ask for rectification under Section 154. 7. Apart therefrom, provisions of Section 143(1) (a)(i) indicate that intimation sent under Section 143(1)(a) shall be without prejudice to provisions of sub-section (2). legislature, therefore, intended 6 (2003) 260 ITR 84 77 (1996) 222 ITR 140 Guj. CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 22 that where summary procedure under sub-section (1) has been adopted, there should be scope available for Revenue, either suo motu or at instance of assessee to make regular assessment under sub- section (2) of Section 143. converse is not available; regular assessment proceeding having been commenced under Section 143(2), there is no need for summary proceeding under Section 143(1) (a). 8.1 facts and relevant submissions in Gujarat Poly Avx Electronics Ltd.2 were recorded in decision of Gujarat High Court as under: 2. On 12th September, 1994 assessee submitted return of loss of Rs.1,74,78,530 for assessment year 1993-94 as per computation of income and depreciation chart annexed to petition at Annexure A. assessee claimed depreciation of Rs. 1,74,78,526. Manufacturing activities started on 24th March, 1993, i.e. during accounting year ending on 31st March, 1993 (the assessment year 1993-94). It was specifically pointed out that "the amount of interest received during public issue of Rs. 1,07,85,590 is not to be considered as income and has been given set off against interest outgoings included under pre-operative expenditure" in view of several decisions including that of apex Court. 3. As stated by learned counsel, on filing of return, Assessing Officer (AO) under new scheme for assessment under Section 143 of Act, had two options; i.e., (i) either to accept return under s. 143(1) with necessary adjustments, if there is any, or (ii) to proceed to make assessment under Section 143(3) or under Section 144 by issuing notice under Section 143(2) of Act. In instant case, instead of accepting return under Section 143(1) of Act, undisputedly, Assessing Officer issued notice under Section 143(2) of Act on 1st December, 1994, vide Annexure C. It is contended in CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 23 petition that in continuation of notice Assessing Officer addressed letter on 15th November, 1995 calling upon assessee to attend on 27th November, 1995, vide letter Annexure C-1. assessee's representative appeared before Assessing Officer on 27th November, 1995 but Assessing Officer adjourned case to 1st December, 1995. On 1st December, 1995 there was discussion between representative of assessee and Assessing Officer. assessee was called upon to make clarifications regarding various points and was also asked to clarify as to how depreciation as claimed should not be disallowed and why interest should not be taxed as receipt on revenue account. It is contended by assessee that Assessing Officer was in midst of proceedings under Section 143(3) of Act. However, Assessing Officer issued intimation/order under Section 143(1)(a) of Act, vide Annexure D, rejecting return of income as computed by assessee resulting in disallowing depreciation as claimed and by taxing interest income of Rs.1,07,85,590 as income from other sources and thus raised demand of Rs. 1,30,83,741 under various heads and sections of taxes, surcharge and additional tax under Sections 143(1A), 234A and 234B. 4. Mr. Shah, learned counsel appearing for assessee, has contended that once Assessing Officer has exercised option to proceed under Section 143(3) of Act by issuing notice under Section 143(2) of Act even if adjustments that may be made by Assessing Officer are in order, Assessing Officer has forfeited authority to act under Section 143(1) by virtue of his option having exercised to make assessment under Section 143(3) of Act by issuing notice under s. 143(2) of Act. 5. As against this, Mr. Shelat, learned counsel (for Revenue), has contended that it is open for AO to follow procedure under s. 143(1) and 143(2) simultaneously. His contention is that it is open to have parallel proceedings and is not compulsory to assess as per s. 143(3) of Act though notice under s. 143(2) of Act is issued and before making CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 24 assessment under s. 143(3) of Act he can proceed under s. 143(1) of Act. No other contention is raised. 8.1.1 relevant provision, namely Section 143 as it then stood was quoted in paragraph 6 as under: 6. It would be better to have look at relevant section which is reproduced as under: "143(1)(a) Where return has been made under Section 139, or in response to notice under sub-s. (1) of Section 143, - (i) If any tax or interest is found due on basis of such return, after adjustment of any tax deducted at source, any advance tax paid and any amount paid otherwise by way of tax or interest, then, without prejudice to provisions of sub-s. (2), intimation shall be sent to assessee specifying sum so payable, and such intimation shall be deemed to be notice of demand issued under Section 156 and all provisions of this Act shall apply accordingly; (ii) If any refund is due on basis of such return, it shall be granted to assessee : Provided that in computing tax or interest payable by, or refundable to assessee, following adjustments shall be made in income or loss declared in return, namely - (i) any arithmetical errors in return, accounts or documents accompanying it shall be rectified; (ii) any loss carried forward, deduction, allowance or relief, which, on basis of information available in such return, accounts or documents, is prima facie admissible but which is not claimed in return, shall be allowed : (iii) any loss carried forward, deduction, allowance or relief claimed in return, which, on basis of information available in such return, accounts or documents, is prima facie inadmissible, shall be disallowed. Provided further that where adjustments are made under first proviso, intimation shall be sent to assessee, notwithstanding that no tax or interest is found due from him after making said adjustments : Provided also that intimation for any tax or interest due under this clause shall not be sent after expiry of two years from end of assessment year in which income was first assessable....... xxx xxx xxx xxx (1A)(a) Where as result of adjustments made under first proviso to clause (a) of sub-section (1) - (i) income declared by any person in return is increased; or (ii) loss declared by such person in return is reduced or is converted into income, Assessing Officer shall, - (A) in case where increase in income under sub-clause (i) of this clause has increased total income of such person, further increase amount of tax payable under sub-section (1) by additional CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 25 income-tax calculated at rate of twenty per cent on difference between tax on total income so increased and tax that would have been chargeable had such total income been reduced by amount of adjustments and specify additional income-tax in intimation to be sent under sub-clause (i) of clause (a) of sub- section (1): (B) in case where loss so declared is reduced under sub-clause (i) of this clause or aforesaid adjustments have effect of converting that loss into income, calculate sum (hereinafter referred to as additional income-tax) equal to twenty per cent of tax that would have been chargeable on amount of adjustments as if it had been total income of such person and specify additional income-tax so calculated in intimation to be sent under sub-clause (i) of clause (a) of sub-s. (1); (C) where any refund is due under sub-s. (1), reduce amount of such refund by amount equivalent to additional income-tax calculated under sub-clause (A) or sub-clause (B), as case may be........... xxx xxx xxx xxx (2) Where return has been made under Section 139, or in response to notice under sub-s. (1) of Section 142, AO shall, if he considers it necessary or expedient to ensure that assessee has not understated income or has not computed excessive loss or has not underpaid tax in any manner, serve on assessee notice requiring him, on date to be specified therein, either to attend his office or to produce, or cause to be produced there, any evidence on which assessee may rely in support of return: Provided that no notice under this sub-section shall be served on assessee after expiry of twelve months from end of month in which return is furnished. (3) On day specified in notice issued under sub-section (2) or as soon afterwards as may be, after hearing, such evidence as assessee may produce and such other evidence as AO may require on specified points, and after taking into account all relevant material which he has gathered, AO shall, by order in writing, make assessment of total income or loss of assessee, and determine sum payable by him on basis of such assessment. (4) Where regular assessment under sub-section (3) of this section or Section 144 is made - (a) any tax or interest paid by assessee under sub-section (1) shall be deemed to have been paid towards such regular assessment; (b) if no refund is due on regular assessment or amount refunded under sub-section (1) exceeds amount refundable on regular assessment, whole or excess amount so refunded shall be deemed to be tax payable by assessee and provisions of this Act shall apply accordingly......... 8.1.2 Thereafter, issue was considered thus:- 8. It is thus clear that Assessing Officer even after issuing intimation after making adjustments as per provisions of s. 143(1) of Act can call upon CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 26 assessee, if he considers it necessary or expedient to ensure that assessee has not understated income or has not computed excessive loss or has not underpaid tax in any manner. Once this opinion is formed then Assessing Officer will have to serve on assessee notice under Section 143(2) of Act requiring him to produce evidence before him on date specified in notice. This is permissible in view of saving clause in Section 143(1) of Act. Section 143(1) of Act is to be exercised without prejudice to provisions of sub-s. (2) of Section 143 of Act. However, exercise of powers under Section 143(1) is not made permissible after issuance of notice under Section 143(2) of Act. Assessing Officer cannot exercise powers under Section 143(1) of Act as he himself has decided to make regular assessment under Section 143(3) of Act. That in Section 143(2) like under Section 143(1) powers are not saved. As Assessing Officer has called upon assessee to furnish evidence to satisfy himself about correctness or legality of claim made by assessee in his return, hence, only after hearing assessee and after considering evidence that may be produced by assessee Assessing Officer has to make order in writing making assessment of total income or loss of assessee and he has to determine amount payable on basis of such assessment, that is, under s. 143(3) of Act. Mr. Shelat, learned counsel for Revenue, fairly stated that notice under Section 143(2) of Act cannot be withdrawn. Notice under Section 143(2) of Act is step towards regular assessment under Section 143(3) of Act and, therefore, in absence of any provision it is not open to make assessment in any other manner than provided as per Section 143(3) of Act. 10. Powers to make assessment in terms of its proviso can be invoked and when claim is prima facie inadmissible or prima facie admissible, as case may be, adjustment is to be made. word prima facie clearly indicates that it must be first evidenced. decision on debatable issue is not envisaged. Issuance of notice under s. 143(2) of Act suggests CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 27 that Assessing Officer has determined to make assessment under Section 143(3) of Act. It is clear, looking to language used in different sub-sections that order under Section 143(1) is summary one and Assessing Officer on perusal of return, that is, computation of income, is able to accept it as it is or with necessary adjustments as indicated in sub-clause (a) of sub-section (1) of Section 143 of Act. submission made by learned counsel for Revenue is that even after issuance of notice under Section 143(2) of Act, it is permissible for Assessing Officer to assess under Section 143(1) of Act. One has to examine claim on account of results of adjustments made in income shown in return whether it results into increase or loss declared in return is reduced or is converted into income. If that is so it would entail further tax at rate of 20% on income so increased or further tax of 20% on loss so reduced as if it is income and assessee will be charged as per sub-section (1A) of Section 143 of Act. With view to see that taxpayers in return furnish details with accuracy and correctness this provision is made. assessee is aware about provision and should take care that no incorrect statement is made with view to save additional tax which may be imposed on him. However, when Assessing Officer is not assessing correctness about claim which is either prima facie admissible or prima facie inadmissible, and Assessing Officer with view to ensure that assessee has not computed excessive loss or has not underpaid tax in any manner has issued notice under Section 143(2) of Act, then there should be evidence before him and on basis of evidence that may be produced by assessee assessment is to be made under Section 143(3) of Act, and assessee will be liable to tax in manner laid down in Act if he is required to pay. After calling upon assessee to produce evidence if Assessing Officer is sending intimation instead of making regular assessment under Section 143(3) of Act then in that case Assessing Officer would assess and would charge tax as per Section 143(1A) of Act which is not contemplated under Section 143(3) of Act and thus what is not permissible under Section 143(3) of CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 28 Act cannot be made permissible by allowing Assessing Officer to resort to Section 143(1) of Act. 16. In this view of matter, we are of opinion that after issuance of notice under Section 143(2) of Act, it is not open for Assessing Officer to make adjustment or to pass order under Section 143(1) of Act but he has to make assessment in accordance with law, i.e., under Section 143(3) of Act. 9. These decisions were rendered in context of provisions then in existence which had following notable features:- (a) sub-section (1A) in terms of which, if any adjustments had resulted in increased total income, additional income tax at rate of 20 per cent on difference would be levied. (b) intimation to be sent under sub-section (1) was expressly stated to be without prejudice to provision of sub-section (2). Nonetheless, basic distinction that was noted was: procedure under sub-section (1) was summary in nature whereas that under sub-section (2) was regular assessment. 10. Section 143 of Act has since then undergone considerable change. Sub-section (1) stands modified and now specifies with clarity nature of adjustments. Sub-section (1A) contemplates processing of CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 29 returns through Centralized Processing. Since we are principally concerned in present matter with effect and applicability of sub- section (1D), legislative history relating to said sub-section (1D) is dealt with in detail hereunder:- A) Sub-section (1D) was inserted vide Finance Act, 2012 as under:- (1D) Notwithstanding anything contained in sub- section (1), processing of return shall not be necessary, where notice has been issued to assessee under sub-section (2)" explanatory Note to Finance Act, 2012 relevant to proposed insertion of sub-section (1D) was:- Under existing provisions, every return of income is to be processed under sub-section (1) of Section 143 and refund, if any, due is to be issued to tax payer. Some returns of income are also selected for scrutiny which may lead to raising demand for taxes although refunds may have been issued earlier at time of processing. It is therefore proposed to amend provisions of Income Tax Act to provide that processing of return will not be necessary in case where notice under sub-section (2) of Section 143 has been issued for scrutiny of return. B) Finance Act, 2016 contemplated substitution of sub-section (1D) and insertion of proviso with effect from 01.04.2017 as follows: (1D) Notwithstanding anything contained in sub- section (1), processing of return shall not be necessary before expiry of period specified in second proviso to sub-section (1), where notice has been issued to assessee under sub-section (2): CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 30 Provided that such return shall not be processed before issuance of order under sub-section (3). relevant explanatory Note to Finance Act, 2016 was: 56. Processing under Section 143(1) of Income Tax Act be mandated before assessment: 56.1 Under existing provision of sub-section (1D) of Section 143 of Income Tax Act, processing of return is not necessary where notice has been issued to assessee under sub-section (2) of said Section. 56.2 said sub-section (1D) of aforesaid section has been amended to provide that in cases where notice has been issued under sub-section (2) of Section 143 of Income Tax Act processing of return shall not be necessary before expiry of one year from end of financial year in which return is furnished. However, it is mandated to process return before issuance of order under sub-section (3) of Section 143 of Income Tax Act. 56.3 Applicability: This amendment takes effect from 1st of April, 2017 and will, accordingly apply in relation to assessment year 2017-18 and subsequent years. C) aforementioned substitution of sub-section (1D), however, never came into effect, as by Finance Act, 2017 said sub-section in earlier form was retained and text of proviso was also modified. Effectively, on and with effect from 01.04.2017, sub-section (1D) and proviso are:- (1D) Notwithstanding anything contained in sub- section (1), processing of return shall not be necessary, where notice has been issued to assessee under sub-section (2): CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 31 Provided that provisions of this sub-section shall not apply to any return furnished for assessment year commencing on or after day of April 2017. concerned explanatory Note to Finance Act, 2017 was:- 59. Processing of return within prescribed time and enable withholding of refund in certain cases. 59.1 Before amendment by Finance Act, 2016, provisions of sub-section (1D) of Section 143 of Income Tax Act specify that processing of return shall not be necessary, where notice has been issued to assessee under sub-section (2) of said section. 59.2 said sub-section was amended vide Finance Act, 2016 and it was provided that with effect from assessment year 2017-18, processing under Section 143(1) of Income Tax Act is to be done before passing of assessment order. 59.3 In order to address grievance of delay in issuance of refund in genuine cases, proviso has been inserted in Section 143(1D) of Income Tax Act specifying that provisions of said sub- section shall cease to apply in respect of returns furnished for assessment year 2017-18 and onwards. 59.4 However, to address concern of recovery of revenue in doubtful cases, new section 241A has been inserted in Income Tax Act to provide that, for returns furnished for assessment year commencing on or after 1st April, 2017, where refund of any amount becomes due to assessee under Section 143(1) of Income Tax Act and Assessing Officer is of opinion that grant of refund may adversely affect recovery of revenue, he may, for reasons recorded in writing and with previous approval of Principal Commissioner or Commissioner, withhold refund up to date on which assessment is made. 59.5 Applicability: These amendments take effect from 1st April, 2017 and accordingly apply to returns CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 32 furnished for assessment year 2017-18 and subsequent years. D) Finance Act, 2017 also inserted Section 241A in Act as under:- 241A. Withholding of refund in certain cases - For every assessment year commencing on or after 1 st day of April, 2017 where refund of any amount becomes due to assessee under provisions of sub-section (1) of Section 143 and Assessing Officer is of opinion, having regard to fact that notice has been issued under sub-section (2) of Section 143 in respect of such return, that grant of refund is likely to adversely affect revenue, he may, for reasons to be recorded in writing and with previous approval of Principal Commissioner or Commissioner, as case may be, withheld refund up to date on which assessment is made. 11. Consequently, relevant parts of sub-sections (1) to (3) of Section 143 of Act, as they stand today are as under: 143. Assessment. (1) Where return has been made under Section 139, or in response to notice under sub-section (1) of Section 142, such return shall be processed in following manner, namely: (a) total income or loss shall be computed after making following adjustments, namely: (i) any arithmetical error in return; (ii) incorrect claim, if such incorrect claim is apparent from any information in return; (iii) disallowance of loss claimed, if return of previous year for which set off of loss is claimed was furnished beyond due date specified under sub-section (1) of Section 139; CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 33 (iv) disallowance of expenditure indicated in audit report but not taken into account in computing total income in return; (v) disallowance of deduction claimed under Sections 10-AA, 80-IA, 80-IAB, 80-IB, 80-IC, 80-ID or Section 80-IE, if return is furnished beyond due date specified under sub-section (1) of Section 139; or (vi) addition of income appearing in Form 26- AS or Form 16-A or Form 16 which has not been included in computing total income in return: Provided that no such adjustments shall be made unless intimation is given to assessee of such adjustments either in writing or in electronic mode: Provided further that response received from assessee, if any, shall be considered before making any adjustment, and in case where no response is received within thirty days of issue of such intimation, such adjustments shall be made: Provided also that no adjustment shall be made under sub-clause (vi) in relation to return furnished for assessment year commencing on or after 1st day of April, 2018; (b) tax, interest and fee, if any, shall be computed on basis of total income computed under clause (a); (c) sum payable by, or amount of refund due to, assessee shall be determined after adjustment of tax, interest and fee, if any, computed under clause (b) by any tax deducted at source, any tax collected at source, any advance tax paid, any relief CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 34 allowable under agreement under Section 90 or Section 90-A, or any relief allowable under Section 91, any rebate allowable under Part of Chapter VIII, any tax paid on self-assessment and any amount paid otherwise by way of tax, interest or fee; (d) intimation shall be prepared or generated and sent to assessee specifying sum determined to be payable by, or amount of refund due to, assessee under clause (c); and (e) amount of refund due to assessee in pursuance of determination under clause (c) shall be granted to assessee: Provided that intimation shall also be sent to assessee in case where loss declared in return by assessee is adjusted but no tax, interest or fee is payable by, or no refund is due to him: Provided further that no intimation under this sub-section shall be sent after expiry of one year from end of financial year in which return is made. Explanation. For purposes of this sub-section, (a) incorrect claim apparent from any information in return shall mean claim, on basis of entry, in return, (i) of item, which is inconsistent with another entry of same or some other item in such return; (ii) in respect of which information required to be furnished under this Act to substantiate such entry has not been so furnished; or (iii) in respect of deduction, where such deduction exceeds specified statutory limit which may have been expressed as monetary amount or percentage or ratio or fraction; CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 35 (b) acknowledgment of return shall be deemed to be intimation in case where no sum is payable by, or refundable to, assessee under clause (c), and where no adjustment has been made under clause (a). (1A) For purposes of processing of returns under sub-section (1), Board may make scheme for centralized processing of returns with view to expeditiously determining tax payable by, or refund due to, assessee as required under said sub-section. (1B) Save as otherwise expressly provided, for purpose of giving effect to scheme made under sub-section (1A), Central Government may, by notification in Official Gazette, direct that any of provisions of this Act relating to processing of returns shall not apply or shall apply with such exceptions, modifications and adaptations as may be specified in that notification; so, however, that no direction shall be issued after 31st day of March, 2012. (1C) Every notification issued under sub-section (1B), along with scheme made under sub-section (1A), shall, as soon as may be after notification is issued, be laid before each House of Parliament. (1D) Notwithstanding anything contained in sub- section (1), processing of return shall not be necessary, where notice has been issued to assessee under sub-section (2): Provided that provisions of this sub-section shall not apply to any return furnished for assessment year commencing on or after 1st day of April, 2017. (2) Where return has been furnished under Section 139, or in response to notice under sub-section (1) of Section 142, Assessing Officer or prescribed income-tax authority, as case may be, if, considers it necessary or expedient to ensure that assessee has not understated income or has not CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 36 computed excessive loss or has not under-paid tax in any manner, shall serve on assessee notice requiring him, on date to be specified therein, either to attend office of Assessing Officer or to produce, or cause to be produced before Assessing Officer any evidence on which assessee may rely in support of return: Provided that no notice under this sub-section shall be served on assessee after expiry of six months from end of financial year in which return is furnished. (3) On day specified in notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as assessee may produce and such other evidence as Assessing Officer may require on specified points, and after taking into account all relevant material which he has gathered, Assessing Officer shall, by order in writing, make assessment of total income or loss of assessee, and determine sum payable by him or refund of any amount due to him on basis of such assessment . 12. Clause (a) of sub-section (1) of Section 143 has six sub-clauses specifying kinds of adjustments which are required to be made for computing total income or loss. Such adjustments are in nature of arithmetical error in return ; incorrect claim apparent from any information in return ; disallowance of loss if return of previous year with respect to which such loss is claimed was furnished beyond due date ; disallowance of expenditure indicated in audit report if it has not taken into account in computing total income ; disallowance of deductions specified in sub-clause if CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 37 return is furnished beyond due date ; and addition of income as specified in sub-clause (vi) if it was not included in computing total income . All these features deal with matters which are apparent from return and inconsistency is evident on face of it. Upon causing such adjustments after due intimation or notice to assessee, element of tax, interest and fee is to be computed in terms of clause (b). Thereafter, in terms of clause (c), due credit to amount of tax paid and any relief that is allowable is to be given and net amount payable or to be refunded, is to be computed. intimation to be generated under clause (d) is on basis of such exercise and if any refund is due, same has to be granted in terms of clause (e). Thus, at every stage in sub-section (1) return submitted by assessee forms foundation, with respect to which, if any of inconsistencies referred to in various sub-clauses of clause (a) are found, appropriate adjustments are to be made. On other hand, exercise of power under sub-section (2) of Section 143 of Act, leading to passing of order sub-section (3) thereof, is to be undertaken, where it is considered necessary or expedient to ensure that assessee: has not understated income, or has not computed excessive loss, or CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 38 has not under-paid tax in any manner. issuance of notice and consequent proceedings are premised on any of aforesaid three postulates. In other words, return filed by assessee itself calls for or requires further probe and deeper consideration. guiding principle is to ensure that income is not under-stated or loss is not over-stated, or tax is not under paid in any manner. Upon issuance of notice, assessee is entitled to produce evidence in support of his case. After hearing assessee and considering evidence so produced, by order in writing, assessment of total income or loss is to be made. 13. nature of exercise of power under sub-section (1) as against that under sub-sections (2) and (3) is thus completely different. In former case, matter is processed, only to check whether any apparent inconsistencies are evident on face of return and connected material which may call for any adjustment while in latter case, matter is scrutinized after taking into account such evidence as assessee may produce. exercise in latter case is to ensure that there is no understating of income or overstating of loss or under- payment of tax in any manner. In other words, veracity of return is checked threadbare rather than considering mere apparent CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 39 inconsistencies from return. Thus, nature of power under these two provisions, as found by this Court in CIT v. Gujarat Electricity Board6 continues to bear same distinction. power under sub-section (1) of Section 143 of Act is summary in nature designed to cause adjustments which are apparent from return while that under sub-sections (2) and (3) is to scrutinize return and cause deeper probe to arrive at correct determination of liability of assessee. 14. exercise of power under Sub-sections (2) and (3) of Section 143 of Act is thus premised on non-acceptance of what is evident from return itself and to ensure that there is no avoidance of tax in any manner. dimension of such power is far greater and deeper than mere adjustments to be made in respect of what is available from return. Once such scrutiny is undertaken and proceedings are initiated by issuance of notice under sub-section (2) of Section 143, it would be anomalous and incongruent that while such proceedings so initiated are pending, return be processed under sub-section (1) of Section 143, which may in given case, entail payment of refund. Logically, outcome of exercise initiated through notice under sub-section (2) of Section 143, must determine whether any refund is due and payable. If return itself is under probe and scrutiny, such return cannot be CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 40 foundation to sustain claim for refund till such scrutiny is not complete. Considering nature of power exercisable under these two limbs of Section 143, inescapable conclusion is that processing of return under sub-section (1) of Section 143 must await further exercise of power of scrutiny assessment under sub-sections (2) and (3) of Section 143. If power under sub-section (2) of Section 143 of Act is initiated in manner known to law, there cannot be any insistence that processing under sub-section (1) of Section 143 be completed and refund be made before scrutiny pursuant to notice under sub-section (2) of Section 143 is over. 15. afore-stated conclusion is fortified and strengthened by clear stipulation to that effect in sub-section (1D) of Section 143. Irrespective of some change in text of said provision which was sought to be introduced by Finance Act 2016 and not accepted by Finance Act, 2017, legislative intent is clear from expression, processing of return shall not be necessary, where notice has been issued to assessee under sub-section (2) and by use of non-obstante clause. Though period for which it would not be necessary to process return was sought to be specified by Finance Act, 2016, mere absence of such period in provision as it stands today, makes no difference. above quoted portion from provision and use of non-obstante clause CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 41 indicate with sufficient clarity intent of Parliament that in cases where notice under sub-section (2) is issued and proceedings are initiated, processing of return under sub-section (1) shall not be necessary. 16. expression shall not be necessary is used in various statutes and even in Constitution of India. This expression is used in first proviso to Article 311(2) and in proviso to Article 320(3) of Constitution of India. Some of cases in which similar expression occurring in statutes was taken into account and effect was given to its plain language are:- i) Proviso to Section 63(3) of Motor Vehicles Act, 1939 in Mohd. Ibrahim v. State Transport Appellate Tribunal, Madras.8 ii) Order XXX Rule 4 of Code of Civil Procedure in Sohanlal and others v. Amir Chand and sons and others9, Upper India Cable Co. and others v. Bal Kishan10 and in Brij Kishore Sharma and others v. Ram Singh and sons and others11. 8 (1970) 2 SCC 233 9 (1973) 2 SCC 608 10 (1984) 3 SCC 462 11 (1996) 11 SCC 480 CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 42 iii) Proviso to Section 68 of Indian Evidence Act, 1872 in Rasammal Issetheerammal Fernandez etc. v. Joosa Mariyam Fernandez and others12. As against general principle which mandates action in particular manner, when exception is to be carved out, relevant provisions stipulate it shall not be necessary to adhere to and follow manner mandated by such general principle; and if contingency contemplated by such exception arises, general principle is to stand overridden. 17. intent to have general principle emanating from sub- section (1) of Section 143 overridden, in case where proceedings are initiated pursuant to notice under sub-section (2) of Act, gets more pronounced and emphasized by use of non-obstante clause in sub-section (1D). Recently, while dealing with non-obstante clause in Section 26(1) of Provincial Small Cause Courts Act, 1887 this Court observed in Vaishali Abhimanyu Joshi v. Nanasaheb Gopal Joshi13 as under: 33. Notwithstanding anything contained elsewhere in this Act as used in Section 26(1) of 1887 Act are words of expression of widest amplitude engulfing contrary provisions contained in Act. suit in question has been filed by plaintiff for enforcement of his right as licensor after allegedly terminating gratuitous licence of 12 (2000) 7 SCC 189 13 (2017) 14 SCC 373 CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 43 appellant. On plain reading, Item 11 of Schedule II covers determination or enforcement of any such right or interest in immovable property. But by virtue of Section 26 sub-section (1) as applicable in State of Maharashtra, Item 11 of Schedule II has to give way to Section 26(1) and suit between licensor and licensee which is virtually suit for recovery of immovable property is fully maintainable in Judge, Small Cause Court that is why suit has been instituted by plaintiff in Judge, Small Cause Court claiming right and interest in immovable property. 35. statutory provision containing non obstante clause has to be given full effect. This Court in Union of India v. G.M. Kokil14 has laid down in para 11 as below: (SCC p. 203) 11. It is well known that non obstante clause is legislative device which is usually employed to give overriding effect to certain provisions over some contrary provisions that may be found either in same enactment or some other enactment, that is to say, to avoid operation and effect of all contrary provisions. Thus non obstante clause in Section 70, namely, notwithstanding anything contained in that Act must mean notwithstanding anything to contrary contained in that Act and as such it must refer to exempting provisions which would be contrary to general applicability of Act. 18. In premises, we hold that in respect of Assessment Years ending on 31st March 2017 or before, if notice was issued in conformity with requirements stated in sub-section (2) of Section 143 of Act, it shall not be necessary to process refund under sub- section (1) of Section 143 of Act and that requirement to process return shall stand overridden. 14 (1984) Supp. SCC 196 CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 44 19. We must now deal with issue whether any intimation is required to be given to assessee that because of initiation of proceedings pursuant to notice under sub-section (2) of Section 143 of Act processing of return in terms of sub-section (1) of Section 143 of Act, would stand deferred. processing of return in terms of sub- section (1A) of Section 143 of Act is to be done through centralized processing and as stated earlier, scope of processing under sub- section (1) of Section 143 of Act is purely summary in character. Once deeper scrutiny is undertaken and matter is being considered from 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 Section 143 of Act does not contemplate either issuance of any such intimation or further application of mind that processing must be kept in abeyance. It would not, therefore, be proper to read into said provision requirement to send separate intimation. In our view, issuance of notice under sub-section (2) of Section 143 is enough to trigger required consequence. Any other intimation is neither contemplated by statute nor would it achieve any purpose. 20. Consequently, submission that intimation dated 23.07.2018 must be held to be invalid, inter alia on ground that it CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 45 was issued well after period within which return was required to be processed under sub-section (1) of Section 143 of Act, must be rejected. 21. However, insofar as returns filed in respect of assessment year commencing on or after 1st April, 2017, different regime has been contemplated by Parliament. Section 241-A of Act requires separate recording of satisfaction on part of Assessing Officer that having regard to fact that notice has been issued under sub-section (2) of Section 143, grant of refund is likely to adversely affect revenue; whereafter, with previous approval of Principal Commissioner or Commissioner and for reasons to be recorded in writing, refund can be withheld. Since statute now envisages exercise of power of withholding of refund in particular manner, it goes without saying that for assessment year commencing after 01.04.2017 requirements of Section 241-A of Act must be satisfied. 22. We will, therefore, have to see whether insofar as AY 2017-18 is concerned, order dated 14.03.2019 satisfies required statutory parameters or not. CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 46 In terms of second proviso to sub-section (1) of Section 143 of Act, required intimation under said sub-section must be given before expiry of one year from end of financial year in which return is made. In respect of AY 2017-18, 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 fact that revised return was filed on 13.07.2018. In present case, exercise of power on 14.03.2019 was not only after issuance of notice under sub-section (2) of Section 143 and after recording due satisfaction in terms of Section 241-A of Act, but was also well within period contemplated by sub-section (1) of Section 143 of Act for causing due intimation. Whether satisfaction recorded in terms of said Section 241-A of Act was otherwise correct or not and whether case for withholding of refund was made out or not, are not issues that arise for our consideration. For present purposes, whether exercise of power is facially in conformity with statutory provisions is issue and we are satisfied that there is nothing in exercise of power that led to passing of order dated 14.03.2019 which could be said to have violated any statutory requirements. CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 47 23. Insofar as AY 2014-15 is concerned, final assessment order passed under Section 143(3) of Act indicates that appellant is entitled to refund of Rs.733 Crores; while for AY 2015-16 there is demand of Rs.582 Crores. During course of hearing, it was suggested on behalf of respondents that demands in respect of earlier assessment years including liability as result of order dated 28.12.2019 as referred to in para 5.1 hereinabove being outstanding, respondents would be entitled to invoke requisite power under Section 245 of Act to set off amount of refund payable in respect of AY 2014-15 against tax remaining payable. Since requisite action is not even initiated, we say nothing in that respect. In premises, we direct that amount of Rs.733 Crores shall be refunded to appellant within four weeks from today subject to any proceedings that Revenue may deem appropriate to initiate in accordance with law. We also direct respondents to conclude proceedings initiated pursuant to notice under sub-section (2) of Section 143 of Act in respect of AY 2016-17 and 2017-18 as early as possible. CIVIL APPEAL NO. 2377 OF 2020 (@ SLP (C) NO.1169 OF 2019) VODAFONE IDEA LTD (EARLIER KNOWN AS VODAFONE MOBILE SERVICES LIMITED) VS. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) & ANR.) 48 24. Except for directions as indicated above, we see no merit in any of contentions advanced by appellant. This appeal is, therefore, dismissed without any order as to costs. ..J (Uday Umesh Lalit) .J (Vineet Saran) New Delhi, April 29, 2020 Vodafone Idea Ltd. (Earlier Known as Vodafone Mobile Services Limited) v. Assistant Commissioner of Income-tax Circle 26 (2) & Anr