TaxTMI 
TaxTMI 
2020 (3) TMI 968
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....section (1) of section 143 and the Assessing Officer is of the opinion, having regard to the fact that a notice has been issued under sub-section (2) of section 143 in respect of such return, that the grant of the refund is likely to adversely affect the revenue, he may, for reasons to be recorded in writing and with the previous approval of the Principal Commissioner or Commissioner, as the case may be, withhold the refund up to the date on which the assessment is made." The section applies to the assessment year commencing on or after the Ist day of April, 2017; the refund due under Section 143(1) can be withheld till assessment is made if:- (i) there is a notice under Section 143 (2); (ii) the Assessing Officer is of the opinion that revenue would be adversely affected in case of grant of refund; (iii) the Assessing Officer has to get previous approval of the Principal Commissioner or Commissioner; and (iv) the reasons are to be recorded in writing. In cases where the above said conditions are fulfilled, Section 241A empowers withholding of refund. The check mechanism is inbuilt in the provision i.e. for reasons to be recorded in writing. This ensures that opinion of the Ass....
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.... more than Rs. 700 crores and Rs. 200 crores, claiming refund of Rs. 48,11,52,210/- and Rs. 252,45,13,970/-, respectively. After various notices, reply and direction in CWP No. 28402 of 2019, refund as per communication under Section 143(1) for the assessment year 2017-18 was Rs. 50,89,05,185/- and for the assessment year 2018-19 was Rs. 275,63,65,127/-. In CWP No. 28402 of 2019 filed by the petitioner for direction to process the returns and seeking refund, the respondents filed written statement annexing order dated 8.11.2019 withholding the refund for both the years. The present petition is filed impugning the order of withholding. It would be relevant to reproduce the impugned order in toto: "In this case letter dated 30.10.2019 and 8.11.2019 was received requesting expeditious processing of return and issue of refund of Rs. 252.45 Cr. for the A.Y. 2018-19 and Rs. 48.35 Cr for the A.Y. 2017-18. The request for issue of refund of the assessee has been perused. It is seen that in past few years huge addition have been made including upward adjustments on the issue of transfer pricing leading to raising of huge demand on completion of scrutiny assessment u/s 143(3) of the IT A....
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....corded the approval) be permitted to be present in the Court tomorrow. Request is allowed. Let the concerned Principal Commissioner of Income Tax be present tomorrow i.e. on 20.2.2020. A copy of this order be handed over to the learned Senior Standing counsel for the respondents under the signatures of the Bench Secretary." Though the requirement is that reasons should be mentioned in the order yet we heard Mr. Krinwant Sahay, Principal Commissioner of Income Tax, Rohtak present in court along with the record including the record of approval. He submits that while granting approval of withholding the refund, it is thoroughly seen that if there is history of additions made in the earlier year; whether there would be a similar addition in this year or not and lastly the demand, if created, is huge or not. It is submitted that all three aspects have been duly mentioned in the impugned order. The authorities while invoking Section 241A lost sight that mere pendency of the proceedings under Section 143(2) in itself is not enough to withhold the refund. Had that been the case, the language of provision of withholding would have been couched differently. The selection of case for sc....
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....bout the existence of the powers. We find that the exercise of the powers would not be justified in the facts of the case. In the result, the orders impugned in both the petitions are set aside. Resultantly, the respondents shall release refund of the petitioner arising out of the return filed for the assessment year 2017-18 and the process thereof under Section 143(1) of the Act by the Assessing Officer. This shall be done along with statutory interest within a period of three weeks from the date of receipt of copy of this order." Both sides relied upon decision of Delhi High Court in W.P. (C) No. 7003 of 2019-Maple Logistics Private Limited and another v. Principal Chief Commissioner of Income Tax and others, decided on 14.10.2019. Reliance of the petitioner is that order under Section 241A was set aside as no reasons were mentioned as to why refund is likely to adversely affect the revenue. The revenue contends that the order was set aside and the matter was remitted back to decide the issue afresh. The contention of the respondents to remit the matter back is not found worth acceptance as in the present case, there are no reasons even in the record to support the finding that....