2022 (6) TMI 416 - HC - Income Tax

Interest on refund delayed - Why interest paid to assessee should not be collected from the Officers who had delayed the refund? - HELD THAT - As stated earlier in other orders that even though assessee gets refund with interest thereon at the rate of 6% p.a., it is public money that is being wasted. It is unacceptable to this Court that public money is used to pay refund when assessee is entitled to refund is not in issue. Principal Chief Commissioner of Income Tax, Mumbai shall file an affidavit in this Court to explain as to (a) why payment of refund was delayed and b) why amount of interest paid to assessee should not be collected from the Officers who had delayed the refund. We say this because, as noted earlier, it is public money that is being used to pay interest to assessee. We have to note that in view of this, delay in giving refund, Revenue has been paying interest. Petitioner will earn interest but at whose cost, is something which Revenue should keep in mind. When entitlement of petitioner to get the refund is not in question, we fail to understand as to why Revenue delays in issuing refund order and pays interest on that with public money. Perhaps the concerned Officer should be directed to show cause and explain the delay otherwise, it is public money being wasted. We are making it clear that if the amount is not paid, we may have to take strict action. We may even consider putting the blame on the concerned Officer and direct action to be taken against such Officer in the event money is not credited to the petitioner s account by 29.03.2022. The affidavit shall be filed within 4 weeks from today. We are also anguished by the fact that precious judicial time is being wasted because of this conduct on the part of the respondents and legal costs are being incurred by Assessee and Government of India.

Summary

Issues involved: Delay in issuing refund, payment of interest, accountability of Revenue officers, wasting public money, judicial time, legal costs

Delay in issuing refund:
The High Court directed the respondents to calculate and issue a refund within one week from the date of the order. The petitioner highlighted that interest had accumulated on the refund amount since December, amounting to around Rs. 2 crores. The Court expressed concern over the delay in issuing refunds, emphasizing that even though the assessee is entitled to a refund with interest, it is public money being wasted.

Payment of interest and accountability of Revenue officers:
The Court instructed the Principal Chief Commissioner of Income Tax, Mumbai, to file an affidavit explaining the reasons for the delayed payment of the refund and why the interest paid to the assessee should not be recovered from the officers responsible for the delay. The Court reiterated that using public money to pay interest to the assessee due to delays in issuing refunds is unacceptable and emphasized the need for accountability.

Wasting public money and judicial time:
The Court expressed anguish over the fact that precious judicial time is being wasted due to the conduct of the respondents. It noted that legal costs are being incurred by both the Assessees and the Government of India as a result of these delays in issuing refunds and emphasized the importance of efficiently handling refund processes to avoid wasting public resources.

Action and accountability measures:
The Court warned that if the refund amount is not paid promptly, strict action may be taken, including holding the concerned Officer responsible and directing appropriate action against them. The Court emphasized the need for the Revenue to consider the implications of delaying refund orders and paying interest with public money, urging for more efficient and accountable practices within the department.

Notification and future directions:
The Court ordered that a copy of the order be provided to various high-ranking officials, including the Central Board of Direct Taxes, the Finance Minister, the Law Minister, and the Attorney General for India. The petition was scheduled to be listed for further directions on a specific date, highlighting the ongoing monitoring and attention given to the issue to ensure timely resolution and accountability.