2016 (12) TMI 498 - HC - Income Tax

Refund application - Held that - Once the petitioner gives up the constitutional and the larger challenge and are agreeable that their refund application if processed in accordance with law and expeditiously they would be satisfied and would not press the petition thereafter, we are of the opinion that the following order will serve the ends of justice. While clarifying that this order is passed in the peculiar facts and circumstances of the petitioner s case and shall not be treated as a precedent for any future case and that we have expressed no opinion on the rival contentions, particularly on the larger challenge raised in the writ petition and they are kept open for being considered and decided in an appropriate case, we dispose of this petition in the following terms We direct that the refund application of the petitioner pending with the Department shall be processed by the Competent Authority, namely, respondent No.4, as expeditiously as possible and in accordance with law.

Issues:
Challenge to constitutionality of subsection (1D) of section 143 of the Income Tax Act, 1961 and Circular No.1 of 2015 issued by the Central Board of Direct Taxes. Processing of refund claims for Assessment Year 2014-15.

Analysis:
1. The petitioner filed a writ petition challenging the constitutionality of subsection (1D) of section 143 of the Income Tax Act, 1961, and Circular No.1 of 2015 issued by the Central Board of Direct Taxes. The petitioner sought various reliefs, including a declaration that these provisions are unconstitutional and illegal. Additionally, the petitioner requested the court to issue writs for quashing the impugned circular and prohibiting the respondents from withholding refunds in deserving cases.

2. The petitioner, a company engaged in providing customer interaction and related services, filed its return of income for the Assessment Year 2014-15 electronically, claiming a refund. Despite representations and reminders, the refund processing was delayed due to the application of Section 143(1D) of the Act and the CBDT Instruction. The petitioner highlighted the financial hardship caused by the delay and the selective approach of the respondents in processing refunds.

3. After considering the peculiar factual scenario presented by the petitioner and the submissions of both parties, the court directed the Competent Authority to process the pending refund application expeditiously and in accordance with the law. The court clarified that its order was specific to the petitioner's case and should not be considered a precedent for future cases. The court did not express any opinion on the larger constitutional challenge raised by the petitioner.

4. The Additional Solicitor General informed the court that the refund processing was delayed due to the constitutional challenge raised by the petitioner. However, upon the petitioner's willingness to forego the constitutional challenge and focus on the refund processing, the court ordered the Competent Authority to process the refund application within two weeks from the date of the order.

5. The court made it clear that its decision to direct the refund application's processing did not imply any judgment on the application's merits. The court emphasized that the refund application for the Assessment Year 2014-15 should be processed and disposed of as per its directions. The rule was made absolute in favor of the petitioner, with no order as to costs.

This detailed analysis covers the issues raised in the judgment, the background of the case, the arguments presented by both parties, and the court's final decision and directions regarding the processing of the refund application.

← Previous Next →