2021 (2) TMI 480 - HC - Income Tax

Refund along with interest u/s 244A - upon the petitioner filing an application under section 154 Transfer Pricing Officer reduced the additional income to Nil vide order and order not given effect to and the refund was not issued, petitioner filed the present writ petition - HELD THAT - Having perused the paper book, this Court is of the view that it is strange that the Appeal Effect Order was not passed for around eight months. 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. 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. As 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 rectification order under Income-tax Act, 1961 for Assessment Year 2011-12.

Analysis:
The petitioner filed a writ petition seeking directions for a refund of approximately &8377; 5.19 Crores for the Assessment Year 2011-12 under section 244A of the Income-tax Act, 1961 and a rectification order within fifteen days. The Assessing Officer had made an addition of approximately &8377; 10.76 Crores to the assessed total income of approximately &8377; 19.33 Crores. The Income-tax Appellate Tribunal (ITAT) stayed the demand subject to partial payment, and the petitioner deposited approximately &8377; 3.97 Crores. A further sum of approximately &8377; 2.18 Crores was adjusted against outstanding refunds. Following a remand order by the ITAT, the Transfer Pricing Officer recomputed the total income to approximately &8377; 14 Crores. Subsequently, the additional income was reduced to Nil, but the refund was not issued, leading to the present writ petition.

The court noted the delay in passing the Appeal Effect Order for around eight months and criticized the Tax Department's functioning, stating that it was unacceptable for an assessee to have to file a writ petition to enforce a favorable order. Consequently, the court directed the respondents to pass the Appeal Effect Order, grant the refund with interest under section 244A of the Act, and process rectification orders within four weeks based on the petitioner's application. The court emphasized that the respondents should have implemented the Appeal Effect Order promptly, avoiding the need for the writ petition. The writ petition and application were disposed of with these directions.

In conclusion, the court's judgment addressed the delay in issuing the Appeal Effect Order and the refund to the petitioner. The court emphasized the importance of timely implementation of orders and directed the respondents to take necessary actions promptly, highlighting the inefficiency in the functioning of the Tax Department and the burden placed on the petitioner to seek enforcement through legal proceedings.