2021 (2) TMI 800 - HC - Income Tax

Claim of refund including interest on refund calculated upto September 2020 due to the petitioner(s) - HELD THAT - Petitioner was informed verbally that refunds were processed by AO seeking approval of ACIT and refund is now pending with Central Processing Centre for its release but till date no refund was actually released244 the petitioner filed its grievance with the online portal requesting to direct the department to take immediate action for release of tax refunds but the said grievance was closed stating that separate applications are required to be filed for each of the assessment year. The petitioner again filed separate grievance letters seeking same relief and vide order dated 06.07.2020 CPGRAM ordered refund amounting to INR 3, 50, 35, 301 instead of INR 8, 20, 49, 885 (excluding interest). The huge amount of refund despite having been determined by the AO vide order dated 04.12.2018 passed under Section 154 read with Section 143(3) of the Act have subsequently been reduced vide the CPGRAM disposal order dated 06.07.2020 without giving any reasons/intimation to the petitioner. Even the amount of refund agreed to be paid to the petitioner vide CPGRAM disposal order dated 06.07.2020 has not been credited to the bank account of the petitioner till date. During the course of arguments it has been brought to the notice of this Court that the principal amount and due interest upto November 2019 has already been processed and released in favour of the petitioner(s). It is fairly conceded by the learned counsel for the respondent

Summary

Issues:
1. Petitioner seeking refund including interest on refund calculated up to September 2020.
2. Dispute regarding the assessment of income and demand raised by the Assessing Officer.
3. Appeal before the Commissioner of Income Tax (Appeals) leading to relief in assessed income and demand.
4. Rectification application filed by the petitioner for refund, subsequent delays, and discrepancies in refund amount.
5. Grievances filed by the petitioner for release of tax refunds and subsequent reduction in the refund amount without intimation.
6. Non-crediting of the agreed refund amount to the petitioner's bank account.
7. Processing and release of principal amount and due interest, with pending computation of interest till the date of payment.

Analysis:
1. The petitioner filed writ petitions seeking a mandamus for the refund of excess taxes paid, including interest up to September 2020. The petitions involved common questions of facts and law, with the petitioner being a tax resident of the USA, engaged in the business of telecommunication and satellite equipment. The Assessing Officer had initially assessed the petitioner's income at a significant amount, alleging the existence of a Permanent Establishment in India. Subsequent appeals led to relief in the assessed income and demand raised.

2. Following the appeal process, a rectification application was filed by the petitioner for the refund, leading to delays and discrepancies in the refund amount determined by the Assessing Officer. Despite various follow-ups and grievance filings by the petitioner, the refund amount was not credited to their bank account. The petitioner faced challenges with the online processing of refunds and experienced a reduction in the refund amount without any prior intimation.

3. During the proceedings, it was revealed that the principal amount and due interest up to November 2019 had been processed and released in favor of the petitioner. The court was informed that the computation of interest from December 2019 until the date of payment was ongoing and would be completed within four weeks. Consequently, the court deemed the petitions infructuous based on the conceded position, allowing parties to file miscellaneous applications for any calculation differences or clarifications needed in the future.