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2024 (12) TMI 262 - HC - Income TaxEntitlement of refund as amount of tax arrears refundable as per Vivad Se Vishwas Act, 2020 ( VSV Act, 2020 ) along with interest u/s 244A - HELD THAT - A bare perusal of the Explanation would reveal that the Explanation pertains to payment of any amount under the Income Tax Act for the period before filing the declaration under sub- section (1) of Section 4 of the VSV Act, 2020 and nothing to do with the entitlement to interest for the period after issuance of Form No.5 indicating entitlement of the petitioner to the amount of refund. For the delayed payment, the petitioner is entitled to interest on the refund amount for the delay beyond the period of 90 days from the date of refund order i.e. 20.09.2022.Consequently, the writ petition is allowed. It is directed that respondents shall make payment of refund of Rs. 2,19,42,954/- along with interest @ 6% per annum on the delayed refund amount with effect from 20.12.2022 i.e. beyond the period of 90 days from the date of determination of refund amount on 20.9.2022 till the date of actual payment to the petitioner. The entire amount of refund and interest be paid within a period of eight weeks from the date of this order.
Issues:
Refund of tax arrears under Vivad Se Vishwas Act, 2020; Challenge to demand raised by assessing officer; Appeal before Income Tax Appellate Tribunal; Application under VSV Act, 2020 for settlement of disputed tax; Non-refund of amount as per Form 5 under VSV Act, 2020; Requirement to fill Form 26B for refund; Entitlement to interest on delayed refund amount. Analysis: The petitioner filed a writ petition seeking a refund of tax arrears amounting to Rs. 2,19,42,954/- under the Vivad Se Vishwas Act, 2020, along with interest under Section 244A of the Income Tax Act, 1961. The demand arose from an assessment order in F.Y. 2008-09 for alleged short payment of TDS, which was challenged before the first appellate authority and later revised by the assessing officer. Subsequently, the petitioner applied for settlement under the VSV Act, 2020, and a refundable amount was determined. Despite issuance of Form 5 indicating the refundable sum, the amount was not refunded, leading to the petition. The respondents argued that the petitioner needed to fill Form 26B for refund, which was contested by the petitioner citing provisions of the VSV Act, 2020. The court noted that once Form 5 under the VSV Act, 2020 was issued entitling the petitioner to a refund, there was no requirement for filing Form 26B as demanded by the respondents. The court emphasized that the VSV Act, 2020 did not necessitate filling any additional form for refund. Additionally, the court cited precedents where interest was awarded on delayed refunds, emphasizing the obligation to refund money received without right. The court rejected the respondent's argument regarding the provisions of Section 7 of the VSV Act, 2020, clarifying that the entitlement to interest for delayed payment was distinct from the provisions mentioned in the Explanation to Section 7. Consequently, the court allowed the writ petition and directed the respondents to pay the refund amount of Rs. 2,19,42,954/- along with interest at 6% per annum on the delayed refund amount from a specified date till the actual payment, to be completed within eight weeks from the date of the order. The court's decision was based on the petitioner's entitlement to interest for delayed payment beyond the stipulated period.
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