2020 (6) TMI 341 - HC - Income Tax

Seeking refund of the amount seized during the search proceedings along with interest - Today during the course of hearing, it transpires that the refund voucher for the interest amount given by the respondents at the pain of contempt has been returned unpaid by SBI with the reason, paper not received i.e. refund voucher to be presented physically for clearing - HELD THAT - It is common ground that this activity has to be done in P2F session, but RBI has suspended the said session from 23rd March, 2020 due to Corona outbreak. From the aforesaid, it appears that no refund voucher issued by the Income Tax Department is being honoured by the banks. This is a serious matter as one of the ways the Government of India plans to revive the economy during the present COVID-19 crisis is by issuing tax refunds forthwith. Issue notice without process fee to the Ministry of Finance, Government of India through standing counsel for UOI and Reserve Bank of India. Open to the respondents officials to speak to the officials of the Ministry of Finance, Government of India and Reserve Bank of India in a bid to ensure that the refund voucher issued by them is honoured. List on 22nd June, 2020.

Summary

Issues:
Refund of seized amount during search proceedings along with interest not honored by banks due to physical presentation requirement during COVID-19 lockdown.

Analysis:
The High Court of Delhi addressed a petition seeking the refund of an amount seized during search proceedings, along with interest, in accordance with the law. The court noted that a previous contempt case had been disposed of after the seized amount and interest were refunded to the petitioner. However, during the current hearing, it was revealed that the refund voucher for the interest amount had been returned unpaid by the bank due to the requirement of physical presentation for clearing, which was hindered by the suspension of physical-to-financial (P2F) sessions by the RBI since the COVID-19 outbreak. The court emphasized the importance of tax refunds in reviving the economy during the pandemic and issued notices without process fee to the Ministry of Finance, Government of India, and the Reserve Bank of India. The respondents were allowed to communicate with the relevant officials to ensure the refund vouchers issued by them are honored. The matter was scheduled for further hearing on 22nd June 2020, with instructions for the order to be uploaded on the website and shared with the counsel via email.