The meaning of in lieu of payment under section 237 to 245 of the Income Tax Act is not defined in the act itself. But we can take guidance from decisions by various high courts. Here are excerpts of courts orders in which the Hon’ble High Court tried to explain the meaning of in lieu of payment.
Meaning of in lieu of payment defined by court
The phrase ‘in lieu of payment’ used in section 237 to 245 of the Income Tax Act came up before hon’ble supreme Court in Hindustan Construction Co. Ltd. Vs. H.S. Gaitonde, ITO [1965] 56 ITR 241 (SC) and it explained.
Meaning: The expression ‘in lieu of payment’ in section 49e of the 1922 act connotes that payment of the refund is outstanding, i.e., That there is a subsisting obligation on the part of the ITO to pay the refund.
Section 237 to 245 of the Income Tax Act
Refunds.
237. If any person satisfies the Assessing Officer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess.
In this article, you can get guidance from high courts on the meaning of in lieu of payment under section 237 to 245 of the Income Tax Act.
Updated up to Finance Act 2021