2022 (4) TMI 1130 - HC - Income Tax

Refund alongwith interest under Section 143(1) - Petitioner s grievance is that though there has been an intimation on 23rd November 2021 under Section 143(1) that petitioner was entitled to a refund but petitioner has not received the refund - HELD THAT - To the petition is also annexed a photocopy of Citizen s Charter 2014, a declaration of our commitment to the taxpayers by the Income Tax Department where it says issue of refund alongwith interest under Section 143(1) of the Act will be made within six months from the date of the return and in this case, indisputably, returns was filed on 15th February 2021. Mr. Suresh Kumar requests for two weeks time to file reply. Though we are not inclined to grant any time nevertheless in view of the deadline of 31st March 2022 to complete assessment, we are granting the indulgence. Within two weeks from today, respondent no.4 and respondent no.5 (not below the rank of Assistant Director of Income Tax) shall file an affidavit in reply and serve a copy thereof explaining why the refund is not being issued. Respondent nos.4 and 5 shall also explain why the concerned officer, who is delaying the refund, should not be penalized in as much as why he should not be directed to pay the interest from his pocket on the refund. We note this because though petitioner will be getting refund with 6% interest, it is public money that is being used to pay the interest. Stand over to 13th April 2022.

Summary

Issues: Delay in issuing income tax refund, Failure to comply with Citizen's Charter 2014

Delay in issuing income tax refund:
The petitioner's grievance was that despite being informed of entitlement to a refund under Section 143(1) of the Income Tax Act, 1961, the refund of ?64,92,16,450 had not been received. Despite reminders, the petitioner had not received the refund and was asked to wait further. The court noted that the Citizen's Charter 2014 declared a commitment to taxpayers that refunds, along with interest, would be issued within six months from the date of the return. The return in this case was filed on 15th February 2021. The respondents were directed to file an affidavit explaining the delay in issuing the refund, and why the officer responsible for the delay should not be penalized or directed to pay the interest from their pocket on the refund. The court emphasized that although the petitioner would receive the refund with 6% interest, it was public money being used to pay the interest.

Failure to comply with Citizen's Charter 2014:
The court highlighted the importance of complying with the Citizen's Charter 2014 commitment to taxpayers regarding the issuance of refunds within a specified timeframe. The court expressed concern over the Department's reluctance to issue refund orders promptly, leading taxpayers to resort to legal action. The court directed that the Central Board of Direct Taxes (CBDT) be informed about the order, emphasizing the need for timely issuance of refunds when they are due, to avoid unnecessary delays and burdens on taxpayers to approach the court for relief.

The court granted two weeks for the respondents to file a reply, considering the deadline of 31st March 2022 for completing the assessment. The matter was adjourned to 13th April 2022 for further proceedings.