2019 (8) TMI 1338 - HC - Income Tax

Court Orders Release of Tax Refund for 2004-05

The court directed the respondent to release the refund for the Assessment Year 2004-05 in accordance with Section 244A(1) of the Income Tax Act within ... Interest on delayed refund in terms of subsection [1] of Section 244A - Undue delay in granting the refund - Credit to the refund due to the petitioner and the interest u/s 244A (1) and 244 (1A) - HELD THAT:- As relying on NIMA SPECIFIC FAMILY TRUST [ 2018 (10) TMI 441 - GUJARAT HIGH COURT] we dispose of this writ application with a direction to the respondent to release the refund for the Assessment Year 2004-05 in accordance with the provisions of Section 244A(1) within a period of six weeks from the date of the receipt of this order. We hope and trust that the writ applicant may not have to comeback to this Court redressing any further grievance. Issues Involved:1. Inaction on the part of the respondent in not releasing the refund for the Assessment Year 2004-05.2. Determination of entitlement to refund and interest under Section 244A of the Income Tax Act, 1961.3. Addressing technical issues causing delay in the refund process.Detailed Analysis:1. Inaction on the part of the respondent in not releasing the refund for the Assessment Year 2004-05:The writ applicant filed a writ application under Article 226 of the Constitution of India, seeking a direction for the respondent to release the refund for the Assessment Year 2004-05 along with interest. The applicant, engaged in the business of trading in textiles, had filed a return of income for the said assessment year declaring total income at Rs. NIL. The return was initially processed under Section 143(1) of the Income Tax Act, 1961, and later selected for scrutiny assessment, resulting in an assessment framed under Section 143(3) determining the total income at Rs. 9,58,11,340/-.2. Determination of entitlement to refund and interest under Section 244A of the Income Tax Act, 1961:The writ applicant challenged the assessment order before the Commissioner of Income Tax (Appeals), who partly allowed the appeal. The matter was further appealed before the Income Tax Appellate Tribunal, which substantially decided in favor of the writ applicant, except for a minor disallowance. The Revenue's appeal to the High Court was dismissed. Despite these decisions, the refund due to the writ applicant was not released, prompting the current writ application.The court referred to the decision in 'Nima Specific Family Trust vs. Assistant Commissioner of Income Tax' to explain the scope of Section 244A, which mandates the Revenue to grant interest at the statutory rate where a refund becomes due. The court reiterated that an order passed by a judicial or quasi-judicial authority should be implemented within a reasonable period unless stayed by a higher authority. The Department's delay in refunding the excess tax collected was unjustifiable, especially since no stay was granted against the appellate orders.3. Addressing technical issues causing delay in the refund process:The respondent's counsel acknowledged the entitlement of the writ applicant to the refund but cited technical issues as the reason for the delay. The affidavit-in-reply detailed the steps taken to process the refund, including multiple requests to the ITBA Helpdesk, which indicated that the refund was in process but not yet issued due to technical errors.The court noted that the stance of the Revenue was clear and fair, acknowledging the delay and the technical issues causing it. However, the court emphasized that the Revenue's acceptance of the writ applicant's entitlement to the refund necessitated immediate action to resolve the technical issues and release the refund.Conclusion:The court, after hearing the parties and reviewing the materials on record, concluded that there was no substantial issue to adjudicate as the Revenue had accepted the writ applicant's entitlement to the refund. The court directed the respondent to release the refund for the Assessment Year 2004-05 in accordance with Section 244A(1) of the Income Tax Act within six weeks from the receipt of the order. The court expressed hope that the writ applicant would not have to return to the court for redressal of any further grievances related to this matter. The writ application was disposed of, and the rule was made absolute to the stated extent.