2019 (1) TMI 51 - HC - Income Tax

Adjustment of dues - bank s refund for the assessment year 2010-11 was adjusted in part against the alleged tax dues of the bank principally for the assessment years 2008-09 and 2012-13 - Commissioner(Appeals) had already granted substantial reliefs to the Petitioner and therefore, tax demand for the said year would not survive - adjustment of dues came to be dropped by the Authority - Held that - We are conscious that the Revenue Authorities are under considerable pressure of work and time limits staring at the face. We also understand that the Government machinery and the Government Officers need to be cautious when the question of large amount of refund arises. Internal checks and verifications must be unbuilt in the system. Nevertheless we do expect that the Officers do not act insensitively and without justifiable reasons delay the refunds giving rise to dissatisfaction and at times need less litigation. In the affidavit-in-reply dated 3rd August 2018, the Deputy Commissioner of Income Tax has in addition to explaining the reason for some delay in correcting position visavis the assessment year 2008-09 has tendered apology to the Court and also to the Petitioner. We, therefore, close the issue without any further order or observations.

Summary

Issues:
Adjustment of tax refund against alleged tax dues, delay in correcting position by Revenue Authorities, undue delay in processing refunds

Analysis:
The petition was filed by a banking company regarding the adjustment of its tax refund against alleged tax dues for specific assessment years. The bank highlighted that a High Court order had stayed the assessment for one of the years, and the adjustment of dues for that year was subsequently dropped by the Authority. Additionally, for another assessment year, the Commissioner had already granted substantial reliefs, leading to the wiping out of the tax demand for that year. The Assessing Officer took a long time to give effect to the appellate order, resulting in the elimination of the demand for the second assessment year as well. The main grievance of the petitioner was resolved due to these actions, although the petitioner's counsel raised concerns about the undue delay in correcting the position by the authorities.

The judges acknowledged the pressure faced by Revenue Authorities and the need for caution in dealing with large refund amounts. They emphasized the importance of internal checks and verifications within the system to prevent errors. However, they expressed the expectation that officers should not act insensitively or cause unnecessary delays in refund processing, which can lead to dissatisfaction and litigation. Despite these concerns, the judges recognized the explanation provided by the Deputy Commissioner of Income Tax in an affidavit, where an apology was tendered to the Court and the petitioner for the delays. As a result, the judges decided to close the issue without further orders or observations, thereby disposing of the petition accordingly.