2020 (11) TMI 225 - HC - Income Tax

Interest payable on income tax refund - Whilst the petitioner states that it is entitled to interest from the date of the order dated 13.11.2019, till the date of actual payment, it is the department s assertion that the petitioner would be entitled to the same, only upto the date of the order allowing income tax refund - HELD THAT - Whilst keeping the question of law stated hereinabove open for determination in an appropriate proceeding, the present writ petition is disposed of since the principal relief seeking income tax refund has been satisfied, whilst reserving the liberty to the petitioner to take appropriate steps, if any, in accordance with law.

Summary

Issues:
1. Petition for issuance of writ of Mandamus for refund processing.
2. Petition to quash notices seeking adjustment of refund with tax demand.
3. Interim directions to restrain recovery of tax demand by adjusting refund.
4. Determination of interest payable by Income Tax Department for the assessment year 2018-19.

Analysis:
1. The petitioner filed a writ petition seeking a writ of Mandamus for the respondent to process and issue a refund amounting to ?10,75,56,607. The court heard arguments from both parties and examined the material on record.

2. The petitioner also sought a writ of Mandamus to quash notices issued for the assessment years 2017-18, 2018-19, and 2019-20, aiming to adjust the refund due with the tax demand of the previous year. Additionally, interim directions were requested to prevent the recovery of the tax demand by adjusting the refund.

3. The court noted that the only remaining issue in the petition was the interest payable by the Income Tax Department concerning the income tax refund for the assessment year 2018-19. There was a discrepancy between the petitioner's claim for interest from the date of the order till actual payment and the department's stance limiting interest until the order allowing the refund.

4. Ultimately, the court disposed of the petition after the principal relief of income tax refund was granted, reserving the petitioner's right to pursue further legal actions if necessary. No additional directions were deemed necessary, and the petition was concluded with the pending application also being disposed of.