2024 (8) TMI 288 - HC - Income Tax

Court Orders Timely Tax Refund of Rs. 28 Crore with Interest; Warns of Consequences for Non-Compliance in Delays.

The HC directed the Central Processing Center to ensure the refund of Rs.28,10,97,082 is credited to the Petitioner's account by a specified date, with ... Refund not been processed further due to technical glitches faced by the Central Processing Center (“CPC”) - technical error appearing in the portal has been deleted, but the refund is yet to be made - as stated that once the manual order passed by AO, is successfully accounted at CPC, the amount of refund determined by the AO will be released in accordance with the provisions of the Income Tax Act, 1961- HELD THAT:- As we have observed in many matters, non-payment of admitted refund results in payment of interest to Assessee out of public money and that is loss to the nation. We fail to understand how the Income Tax Department treats it so casually when tax payers money is used to pay interest. Efforts should be made to see that public money is not paid as interest and refund is issued promptly. Since it is almost three weeks since the AO has passed the order, we direct the CPC to ensure that the refund is credited to Petitioner’s account not later than 9th February 2024, failing which on 13th February 2024 Petitioner shall be handed over a physical cheque/pay order for the entire refund together with interest under Section 244A of the Act up to the date of giving the cheque. Failure to pay shall be viewed as a willful disobedience of this order. Issues involved:1. Petition for refund and rectification of technical error in portal.2. Delay in processing refund by the Income Tax Department.3. Payment of interest to Assessee due to nonpayment of admitted refund.4. Directive to ensure prompt issuance of refund.Analysis:1. The petition sought a direction for the grant of a refund of Rs.28,10,97,082 and deletion of a demand of Rs.1,20,05,43,648 due to a technical error in the portal. The Respondents acknowledged the error deletion but highlighted a delay in processing the refund. The Assessing Officer had determined the refund amount, but technical glitches at the Central Processing Center hindered further processing. The court emphasized the importance of promptly issuing refunds to avoid the loss of public money as interest to the Assessee.2. The court expressed concern over the casual treatment of refund delays by the Income Tax Department, emphasizing that such delays result in the payment of interest to the Assessee from public funds, causing a loss to the nation. The court urged efforts to prevent the unnecessary payment of interest and ensure the timely issuance of refunds to taxpayers.3. Given the significant delay since the Assessing Officer's order, the court directed the Central Processing Center to ensure the credited refund reaches the Petitioner's account by a specified date. Failure to comply would result in the issuance of a physical cheque or pay order to the Petitioner, including interest under Section 244A of the Income Tax Act up to the date of payment. The court warned that non-compliance would be considered willful disobedience of the order.4. The matter was adjourned to 13th February 2024 for further proceedings, emphasizing the court's expectation of prompt action to resolve the refund issue and prevent any further delays in the process.