High Court Orders Expedited Processing of Tax Refund Petition

The High Court allowed the petition, directing the Assessing Officer to expedite the processing of the petitioner's return and refund application, emphasizing the importance of timely and fair tax administration.

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Issues:
Challenge to inaction of Assessing Officer in processing income tax return and granting refund under Section 143(1) and 143(1D) of the Income Tax Act, 1961 for Assessment Year 2015-16.

Analysis:
1. The petitioner filed its income tax return for AY 2015-16, declaring income and claiming a refund. Despite requests and representations, the Assessing Officer failed to process the return and grant the refund, leading to the petition challenging this inaction.
2. The respondent Revenue cited CBDT Instruction No.1 of 2015 as the reason for not processing the return post-issuance of notice under Section 143(2) of the Act. The petitioner argued that this instruction was quashed by the Delhi High Court in a specific case, Tata Teleservices Ltd., and should not be relied upon.
3. The petitioner emphasized that decisions declaring a provision ultra vires are binding on all authorities administering the Act, as held in previous cases like Commissioner of Income Tax Vs. Smt. Godavaridevi Saraf and Commissioner of Income Tax Vs. Valson Dyeing Bleaching and Printing Works.
4. The Delhi High Court's decision in Tata Teleservices Ltd. highlighted that CBDT instructions must be beneficial to the assessee and cannot be prejudicial. Consequently, the Assessing Officer was obligated to disregard Instruction No.1 of 2015 and independently decide on processing the return and granting the refund.
5. The Revenue acknowledged the Delhi High Court's decision and agreed that the Instruction No.1 of 2015 no longer fettered the Assessing Officer's discretion. However, they argued against issuing a mandamus before 31st March, 2017, as the officer had time till then to process the return.
6. The Court criticized the Assessing Officer's delay and highlighted the importance of an assessee-friendly tax administration. Referring to previous instructions emphasizing timely refund processing, the Court directed the Officer to consider and process the petitioner's representation promptly within 8 weeks.

In conclusion, the High Court allowed the petition, directing the Assessing Officer to expedite the processing of the petitioner's return and refund application, emphasizing the importance of timely and fair tax administration.

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