S.S. Chadha, J.
1. This petition under article 226 of the Constitution of India seeks a writ of mandamus directing the respondents to make a refund of tax on provisional assessment under section 141A of the Income-tax Act, 1961, for the assessment year 1973-74.
2. The petitioner, M/s. B. K. Khanna & Co. P. Ltd., is a private limited company (hereinafter called 'the company'). It carries on business as machinery distributors and consulting engineers with registered office at No. 14-F, Connaught Place, New Delhi. The Income-tax Officer, Special Circle IX, New Delhi, who had at the relevant time the jurisdiction in respect of the assessment of the petitioner under the Income-tax Act, 1961 (hereinafter referred to as 'the Act'), issued on May 23, 1972, a notice of demand for payment of advance tax under s. 210 of the Act for the assessment year 1973-74 (financial year 1972-73). The company paid advance tax during the financial year 1972-73 amounting to Rs. 2,13,095. The company furnished on October 16, 1973, its return of income, the company declared a loss of Rs. 1,65,200. The statement of pre-paid taxes was given in Part II of the return. In it was included a sum of Rs. 5,830.16 as tax deducted at source (dividends) and advance tax paid on carious dates amounting to Rs. 2,13,095.
3. The case of the company is that as no regular assessment was likely to be made or had been made within six months from the date of furnishing of return, the Income-tax Officer was duty bound under the proviso to section 141A of the Act to refund the amount of pre-paid taxes of Rs. 2,18,925 immediately after the expiry of the period of six months from the date of filing of the return. This period ended on April 15, 1974. The Income-tax Officer, however, issued notices under sections 142(1) and 143(2) of the Act on April 26, 1975, and thus initiated action for making regular assessment for the first time on the said date. The company claims that it invited the attention of the Income-tax Officer towards the provisions of section 141A of the Act and requested him to allow the refund of the tax already paid by making provisional assessment for refund. The request was contained and repeated in the letters dated December 13, 1975, December 16, 1975, and March 3, 1976, but without any response.
4. Draft assessment order dated March 12, 1976, under section 144B of the Act computing the total income at Rs. 3,97,516 was sent to the company and was received by it on March 18, 1976. The company again invited the attention of the Income-tax Officer to the provisions of section 141A vide its letters dated March 20, 1976, March 23, 1976, May 11, 1976, and August 220, 1976. The company avers that it approached the Inspecting Assistant Commissioner of Income-tax and also the Commissioner requesting them to issue the necessary directions to the Income-tax Officer to allow refund under section 141A of the Act, but without any favorable response.
5. The proposed draft assessment order along with the copy of the objections filed by the company under section 144B(2) was submitted to the Inspecting Assistant Commissioner of Income-tax and later on, a regular assessment under section 143(3) was framed by the Income-tax Officer on September 23, 1976, on the basis of the directions given by the Inspecting Assistant Commissioner of Income-tax, Range III-A. In the assessment order, the Income-tax Officer determined the tax payable and after allowing credit of advance taxes and the tax deducted at source found 'balance refundable of Rs. 69,602'.
6. The company filed an appeal against the order of assessment dated September 23, 1976, and raised, inter alia, a ground that the assessment was illegal, invalid and vitiated as the Income-tax Officer had failed to exercise jurisdiction to allow the refund under section 141A before making the regular assessment. The company also wrote a number of letters to the Appellate Assistant Commissioner, the Commissioner of Income-tax (Appeals) and the Income-tax Officer raising the question of the non-exercise of jurisdiction by the Income-tax Officer under section 141A and suggesting rectification under section 154 or recourse to revisionary powers of the Commissioner under section 264. The appeal filed by the company was allowed, vide order dated October 30, 1981, by the Commissioner of Income-tax (Appeals-I) who set aside the assessment made by the Income-tax Officer on September 23, 1976, and directed the Income-tax Officer to make an assessment de novo in the light of the observations made therein.
7. The company again invoked the provisions of section 141A of the Act and requested the Income-tax Officer to make a provisional assessment and to allow the refund. The Income-tax Officer wrote back that at the time of original assessment, a refund of Rs. 69,602 was determined and was payable which was adjusted against the demand for the assessment year 1972-73 and, thereforee, the question of determination of provisional assessment for refund does not arise. The company wrote several reminders thereafter and ultimately filed the present writ petition on December 16, 1982, claiming that the Income-tax Officer be directed to allow refund of Rs. 2,18,925 under section 141A of the Act for the assessment year 1973-74 before finalising the fresh assessment.
8. Section 141A(1) of the Act as it existed on April 1, 1973, relevant for the assessment year 1973-74 under consideration, read as under :
'Where a return has been furnished under section 139 and the assessed claims that the tax paid or deemed to have been paid under the provisions of Chapter XVII-B or Chapter XVII-C exceeds the tax payable on the basis of the return and the accounts and documents accompanying it, the Income-tax Officer may, if he is of opinion that the regular assessment of the assessed is likely to be delayed, proceed to make, in a summary manner, a provisional assessment of the sum refundable to the assessed after making such adjustments to the income or loss declared in the return as are required to be made under sub-section (2) with reference to such return, accounts and documents, and for the purposes of the adjustments referred to in clause (iv) of sub-section (2) also with reference to the record of the assessments, if any, of past years :
Provided that in a case where the regular assessment is not made within six months from the date of receipt of the return, the Income-tax Officer shall proceed to make the provisional assessment under this section.' Relying on Jaimat Rai v. State of Maharashtra, : 1968CriLJ231 , Shri K. P. Bhatnagar, the learned counsel for the petitioner, urges that the imperative nature of the provisions of section 141A is borne out by the use of the word 'may' in first part of the provision and the word 'shall' in the same provision in the proviso. IT is urged that where the legislature has used the word 'shall' and 'may' in the same provision, that itself is an indication, that the word 'shall' has been used in a mandatory sense. 'The use of the word 'may' in the first part and of the word 'shall' in the second firmly establish the difference.'
9. It is next urged that the assessment has been set aside by the Commissioner of Income-tax (Appeals) in the order dated October 30, 1981. When the assessment order was set aside by the Commissioner of Income-tax and the case remanded to the Income-tax Officer for de novo assessment, the counsel submits that the position is as if no assessment has been made. Reliance is placed on Jugal Kishore Baldeo Sahai v. ITO : [1956]30ITR600(All) , wherein it was held that when an assessment order is set aside by an appellate officer and the case is remanded to the Income-tax Officer for reassessment, the position is the same as if no assessment had been made and in such a case under the powers vested in the Income-tax Officer by virtue of section 23B of the 1922 Act, he can make a provisional assessment on the basis of the returns furnished by the assessed before he makes a regular assessment as directed by the appellate officer. The counsel concludes that this court should grant a writ of mandamus as the Income-tax Officer is under a legal duty to proceed to make the provisional assessment under section 141A of the Act and he failed to discharge that duty.
10. I may notice some other relevant statutory provisions. The Government has a definite desire to secure the tax at the earliest possible stage. This is reflected in the provisions contained in Chapter XVII in sections 192 to 195 which deal with deduction of tax at source and sections 207 to 212 which provide for advance payment of tax. Section 141 of the Act as also section 23B of the 1922 Act was inserted with a view to make provisional assessment in advance of regular assessment to determine the tax due from the taxpayer on the basis of the return of income made under section 139 and the accounts and documents, if any, accompanying it. The assessment so made is summary but is with the object of expediting collection of the tax on the basis of the return made by the assessed. Section 141 was deleted by the Taxation Laws (Amendment) Act, 1970, with effect from April 1, 1971, because it amended section 140A which provides for self-assessment and the obligation of the assessed to pay the tax so payable within thirty days of furnishing the return and section 143(1) which enables the Income-tax Officer to make an assessment on the basis of the return submitted by the assessed after making the specified adjustments including the correction of apparent mistakes. Thus, the Act contains several provisions for collection of tax before regular assessment.
11. There was no provision for making a provisional assessment to determine the amount of tax refundable to the taxpayer on the basis of his return of income., In a case where the tax deducted at source under the provisions of Chapter XVII-B and the advance tax paid under the provisions of Chapter XVII-C during a financial year exceeded the amount of tax due on the total income of the taxpayer for the next following assessment year, the excess was refundable to him only on completion of the regular assessment. In order to avoid inconvenience and hardship to the taxpayers due to the delay in issue of refunds in cases where the completion of regular assessment is likely to be delayed, the Finance Act, 1968, introduced section 141A in the Act enabling taxpayers to claim tax deducted at source or paid in advance in excess of the tax due on the basis of the return of income and the accounts and documents accompanying it. It enabled the Income-tax Officer to proceed to make in a summary manner a provisional assessment of the sum refundable to the assessed. During the debate on the Finance Bill, 1968, in the Lok Sabha, the Deputy Prime Minister and Minister of Finance assured the House that where the regular assessment has been delayed for a period of six months from the date of the receipt of the return, the Income-tax Officer will make a provisional assessment and grant the refund due to the taxpayer. Through no such period was fixed in the Statutory provisions, the Central Board of Direct Taxes had issued Circular No. 6P of 1968 dated July 6, 1968, informing all Income-tax Officers of this assurance for compliance. The legislative mandate was given by the Taxation Laws (Amendment) Act, 1970, with from April 1, 1971, when a proviso was added that in case where regular assessment is not made within six months from the date of receipt of the return, the Income-tax Officer shall proceed to make the provisional assessment under section 141A.
12. Under section 23B of the 1922 Act, the Income-tax Officer is authorised to make a provisional assessment of the sum refundable to the taxpayer on the basis of the return of income and the accounts and documents accompanying it, if he is of the opinion that the regular assessment is likely to be delayed. The word employed by the Legislature is 'may'. It gives a discretionary power to the Income-tax Officer. The outer limit of the period of delay in making the regular assessment is not specified. The power could be constructed as simply enabling and not mandatory. But any ambiguity has been recovered by the Taxation Laws (Amendment) Act, 1970, with effect from April 1, 1971. The statue has been amended so as to incorporate therein the substance of the assurance given in the Lok Sabha that where the regular assessment has been delayed for a period of six months from the date of receipt of the return of income, the Income-tax Officer shall make a provisional assessment and grant refund to the taxpayer. The counsel is right in his submission that the section comprises of two parts; one the main provision and the other a proviso. The main section gives a discretionary power to the Income-tax Officer to make a provisional assessment for refund in the first six months. But the provision contained in the proviso is mandatory. If the Income-tax Officer is unable to make the regular assessment within six months, then he has to proceed to make the provisional assessment for refund. The Legislature has used the word 'may' in the main provision, of the section and 'shall' in the proviso. Where the Legislature has used the words 'may' and 'shall' in the same provision, that itself is a clear indication that the word 'shall' has been used in a mandatory sense. The non-making of the provisional assessment and refund would entail the payment of interest to the taxpayer under the statutory provision.
13. An amendment in a statute is a legislative act designed to change some prior and existing law by adding or taking from it some particular provision. The statue has been amended in this case so as to incorporate therein a proviso which, in the judgment of the Legislature, will better carry out the purpose or which it was enacted. It makes it obligatory for the Income-tax Officer to proceed to make the provisional assessment for refund in a case where the regular assessment cannot be made within six months from the date of receipt of the return. Power to make a provisional assessment was introduced by the Finance Act, 1968, and was clarified in the debate in the Finance Bill, 1968, but possibly there was some ambiguity. Amendment was made by adding the proviso to clear that ambiguity. It was with a view to prevent misinterpretation of the statutory provision empowering provisional assessment for refunds. In my view, the purpose was to make it mandatory for the Income-tax Officer will be duty bound to make a provisional assessment under section 141A so as to grant refund of the excess tax paid by the taxpayer.
14. However, on facts, I am not inclined to grant any relief to the petitioner who has approached this court after a regular assessment though set aside. The Income-tax Officer made a regular assessment under section 143(3) of the Act on September 23, 1976, and allowed a refund of Rs. 69,602 which was adjusted against the demand for the assessment year 1972-73. The regular assessment, however, has been set aside and there is no existing assessment at present. There would be no purpose in directing the Income-tax Officer to make a provisional assessment for refund as a fresh draft assessment order dated March 15, 1984, computing the total income at Rs. 1,82,290 has been sent to the petitioner.
15. For the above reasons, the writ petition fails and is dismissed with no order as to costs.
16. Petition dismissed.