2019 (11) TMI 1502 - HC - Income Tax

Grant of refund - Interest u/s 244A - HELD THAT - The fact that an assessee after succeeding in a protracted litigation has to file another legal proceeding i.e. a writ petition to implement and execute the said order, does not reflect well on the functioning of the Tax Department. Consequently, this Court is of the view that the respondents should have given effect to the Appeal Effect Order as well as issued the refund immediately and there should have been no occasion for the petitioner to file the present writ petition. Keeping in view of the aforesaid facts, the request for adjournment, once again, is declined and the respondents are directed to pass the Appeal Effect Order in pursuance to Transfer Pricing Officer s order dated 19th February, 2020 and to grant refund along with interest under Section 244A of the Act as well as to pass rectification orders on the petitioner s application dated 19th August, 2020 within four weeks in accordance with law.

Summary

Issues:
Seeking refund and interest under Section 244A for Assessment Year 2011-12, delay in passing Appeal Effect Order, failure to issue refund promptly, necessity of filing a writ petition for implementation.

Analysis:
The petitioner filed a writ petition requesting a refund of approximately ?5.19 Crores for the Assessment Year 2011-12 along with interest under Section 244A of the Income Tax Act, 1961, and a rectification order. The Assessing Officer had made an addition of ?10,76,09,517 to the assessed total income of ?19,33,25,320. The Income Tax Appellate Tribunal (ITAT) stayed the demand, and the petitioner paid ?3,00,97,380. An additional ?2,18,00,000 was adjusted against outstanding refunds. Following a remand order by the ITAT, the Transfer Pricing Officer recalculated the total income at ?14,00,83,935. Subsequently, the Transfer Pricing Officer reduced the additional income to Nil, but the refund was not issued, leading to the writ petition.

The Court noted the delay in passing the Appeal Effect Order and criticized the Tax Department's functioning for necessitating further legal action by the petitioner. The Court emphasized that the respondents should have implemented the Appeal Effect Order promptly, issued the refund, and avoided the need for the writ petition. Consequently, the Court directed the respondents to pass the Appeal Effect Order as per the Transfer Pricing Officer's order, grant the refund with interest under Section 244A, and process rectification orders within four weeks.

In conclusion, the writ petition and application were disposed of with the specified directions. The Court ordered the immediate implementation of the decision and instructed the uploading of the order on the website while providing a copy to the counsel via email.