Court orders expedited processing of tax return, refunds due to petitioner, citing undue financial hardship.

The Court ruled in favor of the Petitioner in a case concerning the delay in processing their income tax return for Assessment Year 2018-19 under Section 143(1) of the Income Tax Act, 1961. The Court directed the Respondents to expedite the processing of the return within three weeks and to refund any excess tax due to the Petitioner within two weeks of processing. The Court acknowledged the undue financial hardship faced by the Petitioner and emphasized the Respondents' failure to provide reasons for the delay, ultimately disposing of the Petition in favor of the Petitioner.

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Issues:
1. Delay in processing income tax return for Assessment Year 2018-19 under Section 143(1) of the Income Tax Act, 1961.
2. Refund of excess tax paid by the Petitioner.
3. Alleged undue hardship faced by the Petitioner due to delayed processing of the return.

Analysis:

Issue 1: Delay in processing income tax return
The Petitioner filed a loss return of income on 17 October 2018, seeking a refund of approximately Rs. 20.24 crores, representing the excess amount paid as tax due to tax deduction at source by customers. Despite this, the return was not processed, leading to the Petitioner repeatedly requesting, through various letters, an early processing of the return under Section 143(1) of the Act. The delay in processing the return was causing financial hardship to the Petitioner, who was facing cash flow difficulties. The Court noted that the Revenue had not provided any reason for the delay, highlighting the failure of the Respondents to discharge their duties under the Act.

Issue 2: Refund of excess tax
The Petitioner, in response to a notice seeking explanation on a proposed adjustment of Rs. 1.33 lakhs claimed under Section 36(1)(va) of the Act, asserted their entitlement to the deduction claimed. Despite this response, no further action was taken by the Respondents. The Court directed the Respondents to process the return of income for the Assessment Year 2018-19 under Section 143(1) of the Act expeditiously, within three weeks, and to pay any refund due to the Petitioner within two weeks of processing the return.

Issue 3: Undue hardship faced by the Petitioner
The Court acknowledged the undue hardship faced by the Petitioner due to the delay in processing the return of income. Emphasizing that the Petitioner's financial difficulties stemmed from the rejection of their application seeking nil deduction of tax in the previous year, the Court directed the Respondents to promptly process the return and refund the amount due to alleviate the Petitioner's financial strain. The judgment concluded by disposing of the Petition in favor of the Petitioner, with directions to the Respondents to comply with the Court's orders regarding the processing and refund of the income tax return.

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