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2023 Supreme(Online)(GUJ) 62
HIGH COURT OF GUJARAT
SONIA GOKANI, SANDEEP N. BHATT, JJ
M/S. BOMBARDIER TRANSPORTATION INDIA PVT LTD – Appellant
Versus
DEPUTY COMMISSIONER OF INCOME-TAX (TDS) – Respondent
R/SPECIAL CIVIL APPLICATION NO. 12646 of 2019
For the Appellants/Petitioners: MR B S SOPARKAR
For the Respondents: MS POOJA ASHAR, MR.VARUN K.PATEL
The revenue must process a tax refund with interest promptly once it becomes due, as per statutory provisions.
Headnote:(A) Income Tax Act - Section 244A - Claim for refund and interest on delayed refund - Petitioner challenges non-issuance of refund due post ITAT order quashing the penalty - Court directed to complete refund process within three months and compensates for undue delay. (Paras 4, 14, 16)
(B) Lack of clarity on outstanding demands from the revenue which caused delay in issuing refunds and statutory interest - Statutory provisions require revenue to grant interest if a refund becomes due. (Paras 12, 15)
| Table of Content |
|---|
| 1. court's directive on timely refund processing. (Para 1 , 6 , 7 , 9 , 14 , 16) |
| 2. challenge of non-issuance of tax refund. (Para 2 , 3 , 4 , 5 , 8 , 11) |
| 3. arguments regarding outstanding demands and necessity for interest. (Para 10 , 13) |
| 4. insistence on statutory interest and compensation for delay. (Para 12 , 15) |
| 5. conclusion of the court. (Para 17) |
ORDER
(PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1. Draft amendment is permitted to be carried out forthwith, on hearing learned counsels for both the sides.
2. The petitioner is before this Court seeking to challenge the action of the respondent for non-grant of the refund which has been withheld with interest and additional interest under Section 244A of the Income Tax Act .
3. Certain accounting entries were passed by the petitioner for the financial year 2004-05 - assessment year 2005-06 to the tune of Rs.6,50,62,085/- for provision of expenses to be made to Bombardier INC Canada and Bombardier INC UK. No actual remittance was there in the financial year 2004-05 and such provision, according to the petitioner, was disallowed in return of income as inadmissible under Section 40(a).
4. The petitioner since, later on in October, 2005, received the invoices of Rs.5,17,23,484/-, deducted the tax of Rs.77,58,523/- and deposited the same on 22.10.2005. During the assessment year 2005-06, there were provisional accounting entries and the petitioner has not defaulted, according to its averments, under Section 195 or 201. According to the respondent, there was an obligation for deduction of tax at source on the provision of Rs.6.50 crores (rounded off). Hence, considering that to be the default under Section 201(1) of the petitioner for the TDS to be deducted with interest and penalty, the orders came to be passed on 28.2.2006, 2.3.2006 and 31.3.2006 respectively.
5. The appeal came to be filed and CIT (appeals) partly in favour of the petitioner on 23.11.2006 confirming the penalty of Rs.97,59,312/-. The petitioner also paid in the year 2006-07 a sum of Rs.90,46,000/- against the demand raised by 11 different challans. It is also the say of the petitioner that the two challans were erroneously placed for assessment year 2006-07 and 2007- 08 being the sum of Rs.26,40,000/- and Rs.6,00,000/- respectively. In absence of any demand pending, this demand could not have been raised.
6. The appeal before ITAT against such dismissal order was preferred which allowed the assessee’s appeal and deleted the penalty on 17.4.2009.
7. The tax appeal was preferred by the revenue being 1952 of 2009 which is heard and dismissed on 4.8.2016.
8. The department had not been issuing the refund. The petitioner had deposited sum of Rs.90,46,000/-. It is averred that the said amount deposited by the petitioner is due for refund. The communications on different dates are also reflected, however, no heed is paid.
9. The complaint was preferred before CPGRAM of CBDT on 19.6.2017 for not giving effect to the order of the ITAT and the High Court and for non-issuance of the refund.
10. The complaint came lodged for the assessment year 2013-14 as well. The CPGRAM provided the reply on 11.78.2017 and 2.8.2017, however, there is no whisper on the refund of 2005-06.
11. Yet another complaint was preferred before CPGRAM for assessment year 2005-06 on 16.10.2017. The petitioner supplied the details to the respondent for it to process the claim of refund. However, due to mismatch of the challan against the system, according to the respondent, it was not possible to grant the refund but to rectify the same with the bank. For the alleged inaction on the part of the respondent, the petitioner has chosen to approach this Court with the following prayers:
- “6(a) Direct the Respondent to give effect to the order of ITAT dated 17.04.2009. Further direct the Respondent to give the refund due to the Petitio
