Case: VODAFONE IDEA LTD. (EARLIER KNOWN AS VODAFONE  MOBILE SERVICES LIMITED) Vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 26 (2) &amp; ANR.

3. The facts leading to the filing of this appeal, in brief, are as under:-A] The appellant-V odafone Idea Ltd. (earlier known as V odafone Mobile Services Ltd or VMSL for short) is engaged in providing telecommunication services in different circlesa) By amalgamation which came into effect on 01.04.2011, four group entities: V odafone Cellular Ltd., V odafone Digilink Ltd., V odafone East Ltd. and V odafone South Ltd. got merged in VMSLb) By second scheme of amalgamation, two other group entities: V odafone Spacetel Ltd. and V odafone West Ltd. got merged in VMSL w.e.f. 01.04.2012c) While the proceedings in the instant case were pending, by scheme of arrangement (Formulated by the Order dated 19.1.2018 passed by National Company Law Tribunal, Mumbai and order dated 11.1.2018 by National Company Law Tribunal, Ahmedabad.) between VMSL and Idea Cellular Ltd. V odafone Idea Ltd. - the resultant company assumed all the rights and liabilities of the amalgamating/transferor companiesMost of the factual developments in the matter, as set out hereafter, were before said scheme of arrangement.B] For AY (The Assessment Year) 2014-15, the appellant filed Income Tax Return (ITR, for short) on 30.09.2014 claiming refund of Rs.1532.09 Crores. On 31.08.2015, a notice under Section 143(2) of the Act (The Income Tax Act, 1961) was issued to the appellant in respect of AY 2014-15. On 01.11.2015, the appellant filed ITR for AY 2015-16 claiming refund of Rs.1355.51 Crores. A notice under Section 143(2) of the Act was issued by the Department on 16.03.2016 in respect of AY 2015-16. A revised return was filed by the appellant on 31.03.2016 in respect of AY 2014-15. The appellant entered into an Advanced Pricing Agreement with the CBDT (Central Board of Direct Taxes) under Section 92 CC of the Act. Thereafter, further revised return was filed on 25.11.2016 for AY 2015-16 and a modified return in terms of Section 92 CD of the Act was filed by the appellant on 22.02.2017 for AY 2014-15C] For AY 2016-17, the appellant filed ITR on 30.11.2016 claiming refund of Rs.1128.47 Crores. A notice under Section 143(2) of the Act was issued to the appellant on 03.07.2017 for AY 2016-17D] For AY 2017-18, ITR was filed by the appellant on 25.11.2017 claiming refund of Rs.743 CroresE] Submitting that there was complete inaction on part of the respondents in processing the ITRs filed by the appellant and in issuing appropriate refund to the appellant, Writ Petition (Civil) No.2730 of 2018 was filed by the appellant in the High Court, praying for following principal reliefa. Writ of Mandamus or Writ, Order or Direction in the nature of Mandamus, or any other appropriate Writ, Order or Directiion under Article 226 / 227 of the Constitution of India directing the Respondents to process and grant refunds for the AYs 2014-15 to 2017-18, along with interest under Section 244A of the Act;F] On 03.07.2018, the respondent No.1 filed an affidavit in reply submitting inter alia that the ITRs of the appellant raised multiple issues like Transfer Pricing Adjustment, Capitalization of Licence Fees, 3G Spectrum Fees, Asset Restoration Cost Obligation including the effect of amalgamation of group entities which required thorough scrutiny and determinationG] During the pendency of said Writ Petition, a letter was issued by the respondent No.1 on 23.07.2018, the relevant portion of which was as under :The assessment years for which request has been made to process the 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 like to draw your attention to Section 143(1D) of Income Tax Act:(1D) Notwithstanding anything contained in sub-section (1), the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2)The 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 the 1st day of April, 2017, where refund of any amount becomes due to the assessee under the provisions of sub-section (1) of Section 143 and the Assessing Officer is of the opinion, having regard to the fact that a notice has been issued under sub-section (2) of Section 143 in respect of such return, that the grant of the refund is likely to adversely affect the revenue, he may, for reasons to be recorded in writing and with the previous approval of the Principal Commissioner or Commissioner, as the case may be, withhold the refund up to the date on which the assessment is madeConsidering, pending special audit, pending scrutiny, pending demands of amount of more than 4500 crore, it will prejudicial to the interest of revenue to process the returns without completion of the pending scrutiny cases. Therefore, exercising the powers under section 143(1D) of Income Tax Act, 1961 and under Section 241A of Income Tax Act, 1961, the undersigned decline the processing of returns under Section 143(1). The above decision has been taken after taking into cognizance the 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 the judgment:The question whether such return should be processed will have to be decided by the ASSESSING OFFICER concerned exercising his discretion in terms of Section 143 (1D) of the ActH] In the meantime, on 13.07.2018 a revised return was filed by the appellant for AY 2017-18 claiming refund of Rs.744.94 Crores. A notice under Section 143(2) of the Act was issued to the appellant on 10.08.2018 for AY 2017-18I] On 31.08.2018, VMSL merged with Idea Cellular Ltd. and the resultant company was named V odafone Idea LtdJ] By its judgment and order dated 14.12.2018, the High Court dismissed said Writ PetitionJ-1] The submissions of the appellant were recorded as under:8. V odafone also place reliance on the 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 the return should be processed within a year and only where the assessing officer is of the view that issuance of refund would be detrimental to collection of demands which may arise, he may invoke the provision of Section 143(1D) of the Act13. With respect to the delay in processing of the tax return, V odafone places reliance on the decision of this Court in Tata Teleservices Limited vs. Central Board of Direct Taxes (supra), and the decision of the Bombay High Court in Group M Media India (P) vs Union of India (supra), where it was held that the return should be processed within a year and only where the assessing officer is of the view that issuance of refund would be detrimental to collection of demands that may arise, he may invoke the provision of Section 143(1D) of the Act. From the perusal of Section 241A of the Act, it is evident that all tax returns are necessarily to be processed within the time period as prescribed under Section 143(1) of the Act. In the instant case, it is note-worthy that the time period prescribed under Section 143(1) of the Act has expired and there has been no correspondence from the revenue that discretion under Section 143(1D) was exercised17. It was contended that after the lapse of the one year period, by reason of second proviso to Section 143 (1), the right to claim refund is vested in any assessee. Counsel argued that this is independent of the Revenues power to issue a scrutiny notice under Section 143 (2), for which the period of limitation is longer. However, if the Assessing Officer does not issue any notice, or intimation, if the assessee can claim refund, that right is a statutorily vested one if, within the said period of one year, a reasoned order is not made under Section 143 (1D) within the said one year periodJ-2] On the other hand, the submissions on behalf of the respondents were :19. The 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). The assessment years under consideration were picked up for scrutiny under Section 143(3) and there is a prima facie likelihood of a substantial demand being raised by the Income Tax Department, as has been done earlier in V odafones earlier case. Further, the revenue submitted that in V odafones own case for the AY 2011-12 wherein the returned loss was Rs. 33,93,397 and subsequently, the income determined by the Assessing Officer was Rs.546,64,25,250/-21. Counsel for the Revenue contended that for the relevant period under consideration, the Assessing Officer has already issued notice under sub-section (2) of Section 143 within time. As per the then prevailing provision, it was thereafter not necessary for the Assessing Officer to proceed under sub-section (1) of Section 143. Further, the Ld. Counsel placed reliance on Section 143(1D) of the Act to explain that the refund has not been processed till date. The Ld. Counsel urged that sub-section (1D) of section 143 which starts with a non-obstante clause provided that notwithstanding anything contained in sub-section (1), the processing of the return shall not be necessary before the expiry of the period specified in the second proviso where a notice has been issued to the assessee under Section 143(2). The provisio to Section 143 (1D) provided that such return shall be processed before the issuance of an order under sub-section (3). Therefore, Section 143 (1D) overrides Section 143 (1). Therefore, the counsel submitted that under Section 143(1D) of the Act, the processing of return shall not be necessary, where notice has been issued under Section 143(2) of the Act22. The Counsel placed on record letter F.No.ACIT/C-26(2)/2018-19/216 dated 23.07.2018. It is in response to the multiple communications by the assessee for expeditious processing of returns for different AYs. The order informs that the cases are pending for scrutiny as follows; for the AY 2012-13 and 2013-14, the assessment is under special audit and for the AY 2014-15, the assessee approached the AAR and lastly, returns for AYs 2015-16 and 2016- 17, are under scrutiny. The assessment years for which request has been made to process the return under Section 143(1) are already under scrutiny for the various AYs. Therefore, exercising the power under Section 143(1D), the Assistant Commissioner declined the processing of returns under Section 143(1). Further, the case is under compulsory scrutiny for AY 2017-2018, exercising the power Section 241A, the Assistant Commissioner declined the processing of returns under Section 143(1)……J-3] After considering rival submissions, relevant statutory provisions and the decisions relied upon, the High Court observed:29. In the facts of the present case, the issue canvassed is on the interpretation of Section 143 (1D) of the Act. It is first necessary to refer to the statutory provisions and thereafter consider the effect of such provisions on V odafones request for refund for the said assessment years. On reading of the Section 143 of the Act, it is apparent that when returns are filed either under Section 139 or pursuant to a notice under Section 142(1), Section 143(1) mandates that the returns shall be processed in the manner prescribed in the clauses (a) to (e) thereof. The processing of a return thus involves determination of total income or loss, tax and interest, if any, payable and sum payable by, or the amount of refund due to the assessee. Section 143(1)(d) stipulates that an intimation shall be prepared or generated and sent to the assessee specifying the sum determined payable by, or the amount of refund due to the assessee under clause(C). Section 143 (1) (e) provides that the amont of refund due in pursuance of the determination under clause (C) shall be granted to the assessee. A reading of proviso to Section 143 (1) reveals that it mandates that the intimation as provided in Section 143 (1) (d) should be issued before the expiry of one year from the end of the financial year in which the return is made. Before proceeding to Section 143(1D) as it stood at the relevant time, it is essential to refer to Section 143 (2) and (3). Sub-section (2) contemplates issuance of a notice in the contingency covered by the said provision. Sub-section (3) provides that once such a notice is served, after following the procedure laid, the Assessing Officer is required to pass an order in writing making an assessment of the total income or loss and determine the sum payable by the assessee or refund of any amount due to him on the basis of the assessment. It is also relevant to notice that whether it is the processing of a return under Section 143(1) or an order under Section 143(3) is subject to the same time limit, i.e. Section 153(1)39. A reading of the above judgments and the relevant provisions, clearly shows that Section 143(2) empowers, the Assessing Officer to issue notice to the assessee to produce documents or other evidence, to prove the genuineness of the income tax return. Under Section 143(1D) of the Act an introduced by the Finance Act, 2012 processing of a return under Section 143 (1)(a) is not necessary where a notice has been issued under Section 143(2) of the Act. This provision has now been amended by the Finance Act, 2016 (with effect from the AY 2017-18) to provide that if scrutiny notice is issued under Section 143(2), processing of return shall not be necessary before the expiry of one year from the end of the financial year in which return is submitted40. The assesses argument in these proceedings is that once the one year period in proviso to Section 143(1) ends, the return - and whatever calculations are contained in it, with respect to tax liability as well as the consequential refunds, become final, subject to only one event: issuance of notice under Section 143 (2)41. To this Court, it appears that the net effect of Tata Teleservices (supra) is that the revenue cannot be inactive, in cases where the assessee claims refund, and the one year period is over (under proviso to Section 143(1) ends. The Assessing Officer has to apply his mind to consider whether the facts and circumstances of the case, warrant some or all of the refund of the assessees amounts, or if all of it needs to be withheld, whenever the assessee presses for refund. This exercise should be undertaken promptly, keeping in mind the time limit under the normal provision of Section 143(1) expires. This Court held in Tata Teleservices Ltd. (supra) and the Bombay High Court in case of Group M Media India (P) Ltd. (supra) that it would be wholly inequitable for the Assessing Officer to merely sit over the petitioners request for refund citing the availability of time up to the last date of framing the assessment under Section 143 (3). The proper interpretation of the statute and the situation in such a case would be, the Assessing Officer should take up an expeditious disposal of the question once the assessee requests for release of the refund44. Now in this case, acknowledgement or intimation had not been sent by the Assessing Officer. There is no doubt that the period of one year indicated in the second proviso to Section 143 (1). However, Section 143 (1D) begins with a non-obstante clause that overbears that provision. Tata Teleservices (supra) and the Bombay High Court ruling in Group M Media India (supra) state that the fact that a regular assessment is resorted to, does not ipso facto mean that in every case, the Assessing Officer has to refuse refunds or there is an automatic bar to refunds. The Assessing Officer has to apply his mind and make an order keeping in perspective the facts of the case45. In this case, the revenue has relied on an 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 the interest of the revenue to process the returns without completion of the pending scrutiny cases. Therefore, exercising powers under Section 143(1) and under Section 241A of the Act, the undersigned decline the processing of returns under Section 143(1). The senior counsel for V odafone had attacked the reliance on this order, stating that it was made later. However, that is an aspect this Court cannot go into. Facially, the order contains reasons. Therefore, unlike Tata Teleservices, a reasoned order was made; that decision was based on a circular, which fettered the Assessing Officers discretion. Therefore, the CBDT circular was set aside49. As far as the argument that the expiry of the one year period, per second proviso to Section 143(1) resulting in finality of the intimation of acceptance, this Court is of opinion that the deeming provision in question, i.e. Section 143 (1) (d) only talks of two eventualities: shall be deemed to be the intimation in a case where no sum is payable by, or refundable to, the 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 the assessee to ask the Assessing Officer to process the refund and make over the money; it is up to the Assessing Officer - wherever the possibility of issuing a notice under Section 143 (2) exists, or where such notice has been issued, to apply his mind, and decide whether given the nature of the returns and the potential or likely liability, the refund can be given. It does not mean that when an assessment - pursuant to notice under Section 143(2) is pending, such right to claim refund can accrue. This Court also recollects the decision of the Supreme Court in Deputy Commissioner of Income Tax v Zuari Estate Development & Investment Co Ltd. 2015 (15) SCC 248 which held that an intimation under Section 143 (1) is not to be considered as an assessmentK] On 27.12.2018 and 31.12.2018, Draft Assessment Orders in terms of Section 144 C of the Act were passed for AY 2014-15 and AY 2015-16 respectivelyL] In the Special Leave Petition (from which this appeal arises) questioning the aforesaid decision of the High Court, notice was issued by this Court on 18.01.2019. In the affidavit in reply, the respondents asserted:7. That having extracted the relevant provisions, it would be relevant to state that the petitioner itself has made several averments before the High Court that is facing precarious financial conditions with an 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 the Respondent- Revenue had filed a counter affidavit on 3rd July, 2018 against the Writ Petition in the High Court of Delhi wherein it has been categorically averred that there are huge pending demands against the petitioner herein more than of Rs.5000 Crores. The contents of the Counter Affidavit before the High Court may be treated as a part and parcel of the present Affidavit. It has been stated that multiple issues on which addition have been made giving rise to the demand liabilities, and several of such issues are also recurring in nature10. That it is also submitted that the order dated 23rd July, 2018 passed by the Assessing Officer is an order under Section 143(1)(D) for the assessment years 2012-13 to 2016-17 as evident from a bare reading of the said order giving reasons for refusal of refund claimed by V odafone Mobile Service Limited. As far as the refusal of refund claimed for the A.Y . 2017-18 is concerned, the said order draws its power under Section 241A of the Act as clearly stated in the order dated 23rd July, 2018Reference was made to various pending proceedings where the demands raised for earlier assessment years were stayed and it was stated:-24. That it is wrong to say that the letter/order dated 23.07.2018 issued by Respondent No.1 u/s 143(1D) and 241A of the Income Tax Act, 1961 is beyond limitation, bereft of any cogent reasoning and without jurisdiction as the letter/order was issued for good reasons to protect the interest of the revenue which is reflected vide Para 45 of the impugned judgment. The reasoning was based upon pending special audit, pending scrutiny and pending demands of more than Rs.5000 crore. Further, the letter/order was not beyond limitation because Section 143(1D) starts with a non-obstante clause, which is over and above the provisions of Section 143(1), which has been discussed in Para 44 of the impugned judgmentM] On 14.03.2019 an intimation was sent to the appellant by the respondent No.1 regarding withholding of refund for AY 2017-18. It stated about the demand status for earlier assessment years as under :-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 the assessee vide letter dated 23.07.2018. In view of the above discussion there is sufficient reason to believe that issue of refund will negatively impact the interest of the revenue. Therefore, proposal for withhold the 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. The approval for withholding of refund u/s 241 was taken from PCIT-9 which was sent through proper channel through Addl. CIT Range 26In view of the facts above you are hereby intimated that refund of A.Y .2017-18 in the case of M/s V odafone Mobile Service Limited has been withhold u/s 241A of the Income Tax Act, 1961 till the completion of scrutiny proceedings u/s 143(3) or 144C r.w.s. 143(3) of the Income Tax Act, 1961N] Objections raised by the appellant against the 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) of the Act were passed on 31.10.2019 for AY 2014-15 and 2015-2016, whereunder the appellant was held entitled to refund of Rs.733 Crores (approximately) in respect of AY 2014-15, whereas for AY 2015-2016 the claim for refund was rejected and demand in the sum of Rs.582 Crores (approximately) was raised. In an appeal preferred by the appellant, said demand for AY 2015-16, has, since then, been stayed by the Income Tax Appellate Tribunal4. The relevant dates and the factual developments as stated above, can be summarized in a tabular form as under:5. In this appeal, we heard Mr. J.D. Mistri, learned Senior Advocate for the appellant and Mr. Zoheb Hossain, learned Advocate for the respondents. During the course of arguments, it was accepted by the respondents that insofar as AY 2017-18 was concerned, the order dated 23.07.2018 passed under Section 143(1D) of the Act was without jurisdiction, as by that time no order was passed under Section 143(2) of the Act for the concerned Assessment Year. It was submitted that in the circumstances, a fresh order was passed on 14.03.2019 after due compliance of the statutory requirements. In order to verify the developments leading to the passing of order dated 14.03.2019, the concerned record was summoned and perused. The Court was satisfied that all the antecedent steps leading to said order were taken in accordance with law and settled practiceAn affidavit was also filed on behalf of the respondents explaining in detail the developments leading to the passing of order dated 14.03.2019 and issuance of intimation dated 09.04.2019. It was stated:That as per CPC accounting of the return was completed on 9 th April, 2019 and intimation u/s 143(1) was generated on 9 th April, 2019. It is also evident from Page 1 of the intimation dated 09.04.2019 that contrary to the allegations of the Petitioner that the intimation u/s 143(1) was never communicated to them, it is submitted that the intimation u/s 143(1) was sent to the email address provided by the assessee, that is, atul.goel@vodafoneidea.comThat it was in this background that the screen-shot relied upon by the assessee during the course of the hearing shows that the ITR was processed on 09.04.2019The intimation under Section 143(1) was made on 09.04.2019 and the said intimation stated that refund determined under Section 143(1) in the said intimation has been withheld as per the proviso of Section 241A and that the refund if any will be released on completion of the assessment under Section 143(3)/144(4) as the case may be along with the interest under Section 244A and subject to adjustment of arrears demand, if any under Section 245In view of the above, it is submitted that the CPC has adopted the due process prescribed by the ITBA-ITR Processing Instruction No.5 dated 14.12.2018. As per the said process, the refund determination is complete immediately after recommendation of the total income tax and matching of tax credits is completed at CPC system. At this stage the refund determination is communicated by CPC, Bangalore to AO through ITBA module. Once the refund is approved/withheld/blocked by the AO, CPC will complete the accounting of the record and act according to other processes involved like Section 245 of I.T. Act i.e. adjustment of refund determined against tax arrears due5.1 One more development must also be adverted to. In the hearing dated 08.01.2020, reliance was placed on the order dated 28.12.2019 passed in connection with M/s Idea Cellullar Ltd. It was therefore observed by this Court:During the course of hearing, Mr. Zoheb Hossain, learned counsel appearing for the Revenue produced a copy of the order dated 28.12.2019 passed in connection with Idea Cellular Limited (with which entity the appellant now stands merged)Mr. Hossain submitted that the order dated 28.12.2019 will have bearing on the issue insofar as the refund payable to the present appellant in respect of the assessment year 2014-15 is concernedWe direct the Department to place on record copy of the order along with such submission as the Department wishes to place on record. Let the submissions by way of an affidavit be filed within seven days from todayThe appellant shall have liberty to respond to those submissions within next seven daysThe copy of the order dated 28.12.2019 placed on record indicates that for Assessment Year 2016-17 a demand in the sum of Rs.2824.99 crores has been raised against the appellantAfter conclusion of oral hearing, the parties also filed their written submissions.

Reasoning:
13. The nature of exercise of power under sub-section (1) as against that under sub-sections (2) and (3) is thus completely different. In the former case, the matter is processed, only to check whether any apparent inconsistencies are evident on the face of the return and connected material which may call for any adjustment while in the latter case, the matter is scrutinized after taking into account such evidence as the assessee may produce. The exercise in the latter case is to ensure that there is no understating of income or overstating of loss or under- payment of the tax in any manner. In other words, the veracity of the return is checked threadbare rather than considering mere apparent inconsistencies from the return. Thus, the nature of power under these two provisions, as found by this Court in CIT v. Gujarat Electricity Board (2003) 260 ITR 84 continues to bear the same distinctionThe power under sub-section (1) of Section 143 of the Act is summary in nature designed to cause adjustments which are apparent from the return while that under sub-sections (2) and (3) is to scrutinize the return and cause deeper probe to arrive at the correct determination of the liability of the assessee14. The exercise of power under Sub-sections (2) and (3) of Section 143 of the Act is thus premised on non-acceptance of what is evident from the return itself and to ensure that there is no avoidance of tax in any manner. The dimension of such power is far greater and deeper than mere adjustments to be made in respect of what is available from the return. Once such scrutiny is undertaken and proceedings are initiated by issuance of a notice under sub-section (2) of Section 143, it would be anomalous and incongruent that while such proceedings so initiated are pending, the return be processed under sub-section (1) of Section 143, which may in a given case, entail payment of refund. Logically, the outcome of the exercise initiated through notice under sub-section (2) of Section 143, must determine whether any refund is due and payable. If the return itself is under probe and scrutiny, such return cannot be the foundation to sustain a claim for refund till such scrutiny is not complete. Considering the nature of power exercisable under these two limbs of Section 143, the inescapable conclusion is that the processing of return under sub-section (1) of Section 143 must await the further exercise of power of scrutiny assessment under sub-sections (2) and (3) of Section 143. If the power under sub-section (2) of Section 143 of the Act is initiated in a manner known to law, there cannot be any insistence that the processing under sub-section (1) of Section 143 be completed and refund be made before the scrutiny pursuant to notice under sub-section (2) of Section 143 is over15. The 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 the text of said provision which was sought to be introduced by Finance Act 2016 and not accepted by Finance Act, 2017, the legislative intent is clear from the expression, … the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2) and by use of non-obstante clause. Though the period for which it would not be necessary to process the return was sought to be specified by Finance Act, 2016, mere absence of such period in the provision as it stands today, makes no difference. The above quoted portion from the provision and use of non-obstante clause indicate with sufficient clarity the intent of the Parliament that in cases where notice under sub-section (2) is issued and proceedings are initiated, the processing of a return under sub-section (1) shall not be necessary18. In the premises, we hold that in respect of Assessment Years ending on 31 st March 2017 or before, if a notice was issued in conformity with the requirements stated in sub-section (2) of Section 143 of the Act, it shall not be necessary to process the refund under sub- section (1) of Section 143 of the Act and that the requirement to process the return shall stand overriddenThe processing of return in terms of sub- section (1A) of Section 143 of the Act is to be done through centralized processing and as stated earlier, the scope of processing under sub- section (1) of Section 143 of the Act is purely summary in character. Once deeper scrutiny is undertaken and the matter is being considered from the perspective whether there is any avoidance of tax in any manner, issuance of notice under sub-section (2) itself is sufficient indication. Sub-section (1D) of Section 143 of the Act does not contemplate either issuance of any such intimation or further application of mind that the processing must be kept in abeyance. It would not, therefore, be proper to read into said provision the requirement to send a separate intimation. In our view, issuance of notice under sub-section (2) of Section 143 is enough to trigger the required consequence. Any other intimation is neither contemplated by the statute nor would it achieve any purpose20. Consequently, the submission that the intimation dated 23.07.2018 must be held to be invalid, inter alia on the ground that it was issued well after the period within which the return was required to be processed under sub-section (1) of Section 143 of the Act, must be rejected21. However, insofar as returns filed in respect of assessment year commencing on or after the 1 st April, 2017, a different regime has been contemplated by the Parliament. Section 241-A of the Act requires a separate recording of satisfaction on part of the Assessing Officer that having regard to the fact that a notice has been issued under sub-section (2) of Section 143, the grant of refund is likely to adversely affect the revenue; whereafter, with the previous approval of the Principal Commissioner or Commissioner and for reasons to be recorded in writing, the refund can be withheldSince the statute now envisages exercise of power of withholding of refund in a particular manner, it goes without saying that for assessment year commencing after 01.04.2017 the requirements of Section 241-A of the Act must be satisfiedIn terms of second proviso to sub-section (1) of Section 143 of the Act, the required intimation under said sub-section must be given before the expiry of one year from the end of the financial year in which the return is made. In respect of AY 2017-18, the return having been filed on 25.11.2017, period available in terms of said second proviso was upto 31.03.2019, without taking into account the fact that revised return was filed on 13.07.2018In the present case, the 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 the Act, but was also well within the period contemplated by sub-section (1) of Section 143 of the Act for causing due intimationWhether the satisfaction recorded in terms of said Section 241-A of the Act was otherwise correct or not and whether case for withholding of refund was made out or not, are not the issues that arise for our consideration. For the present purposes, whether exercise of power is facially in conformity with the statutory provisions is the issue and we are satisfied that there is nothing in the exercise of power that led to the passing of the order dated 14.03.2019 which could be said to have violated any statutory requirements23. Insofar as AY 2014-15 is concerned, final assessment order passed under Section 143(3) of the Act indicates that the appellant is entitled to refund of Rs.733 Crores; while for AY 2015-16 there is a demand of Rs.582 Crores. During the course of hearing, it was suggested on behalf of the respondents that demands in respect of earlier assessment years including the liability as a result of order dated 28.12.2019 as referred to in para 5.1 hereinabove being outstanding, the respondents would be entitled to invoke the requisite power under Section 245 of the Act to set off the amount of refund payable in respect of AY 2014-15 against tax remaining payable.