2023 (7) TMI 137 - HC - Income Tax

Seeking refund due alongwith with interest u/s 244A till the date of actual payment - stay of demand granted adjusting 20% of all demands - HELD THAT - Since there is a stay order granted on 27th December 2022 and 20% has already been adjusted against the refund due for AY2018-2019, respondents cannot adjust any amount against this refund due for AY 2015-2016. We direct respondent no. 1, who respondent no. 2 states is the person responsible, to ensure that the refund amount of Rs. 60,07,99,744/- alongwith interest, if any, in accordance with law, is credited to petitioner s account within one week from the date this order is uploaded. Also by an order dated 2nd March 2023 respondents were directed to refund the amount to petitioner alongwith interest in accordance with law. The affidavit in reply has been filed admitting Rs. 60,07,99,744/- as payable. Still the order dated 2nd March 2023 has not been complied with. Therefore, notice be issued to respondent no. 1, Director of Income Tax, CPC, returnable on 25th July 2023, as to why contempt proceedings should not be initiated against him. We are issuing contempt notice only against respondent no. 1 in view of what is stated in the affidavit in reply that the CPC is responsible for processing the refund.

Summary

Issues:
The petition involves seeking a writ of mandamus for the immediate issuance of a refund amount due for Assessment Year 2015-2016 along with interest under Section 244A of the Income Tax Act, 1961.

Issue 1 - Refund Due for Assessment Year 2015-2016:
The petitioner claimed a refund of approximately Rs. 60 crores for the assessment year 2015-16. Despite addressing all deficiencies highlighted by the revenue, the refund was not processed. The court found no justification for withholding the refund and ordered the payment to be made within three weeks along with interest.

Issue 2 - Stay Orders and Adjustment of Demands:
An affidavit admitted that the refund amount was due and payable, with the responsibility placed on the CPC to issue the refund. Stay orders had been granted for outstanding demands of various assessment years, with adjustments made against the refund due for Assessment Year 2018-2019. The court emphasized that the entire refund due for Assessment Year 2015-2016 should be paid, as it was not justifiable to adjust it against other demands.

Separate Judgement:
The court directed respondent no. 1 to ensure the refund amount, along with any applicable interest, is credited to the petitioner's account within one week. Non-compliance with the previous order led to the initiation of contempt proceedings against respondent no. 1, cautioning strict compliance to avoid aggravated contempt.