2019 (10) TMI 265 - HC - Income Tax

Non-releasing of the refund - mismatch in TDS - HELD THAT - Direction to refund the claim of the petitioner manually and release the same subject to withholding of the amount of mismatch. Writ Petition is disposed of with the following directions - AO shall process the refund claim of the petitioner manually for the assessment years 2007-08 to 2013- 14 and release the refund as found due with statutory interest after withholding the said sum of ₹ 49,30,180/-. This exercise shall be completed within two weeks from today. We keep the larger question of withholding of the refund by one unit of the Income Tax Department for the TDS mismatch across the country open. In the present case, however, the said order was passed on the basis of facts and circumstances pointed out to us and we therefore, see no reason to recall/modify the order. Before closing, it is recorded that no part of the refund can be withheld in relation to the income tax demands, which are either quashed by appellate authority or tribunal or stayed.

Summary

Issues:
1. Motion seeking modification or recall of the court's order dated 4.9.2019 regarding the refund of ?43.25 crores by the Income Tax (TDS), Pune.
2. Discrepancy in the amount of TDS mismatch leading to the recall of the order.

Analysis:
1. The petitioner, Vodafone Idea Limited, filed a motion seeking modification or recall of the court's order dated 4.9.2019, which directed the Income Tax Authorities to release the refund of ?43.25 crores with applicable interest for assessment years 2007-08 to 2013-2014. The Assessing Officer had not seriously disputed the petitioner's claim for refund but had withheld it due to an outstanding TRACES demand of ?49,30,180. The court, in a previous case involving the same petitioner, had directed the Assessing Officer to refund the claim manually and release it after withholding the amount of mismatch. In this case, the court directed the Assessing Officer to process the refund claim manually and release the refund due after withholding the said sum of ?49,30,180 within two weeks from the date of the order.

2. The department pointed out a discrepancy in the TDS mismatch amount, stating it was actually ?1,55,68,01,913 instead of ?49,30,180 as recorded in the order. The original petitioner's counsel argued that after reconciliations, the TDS mismatch amount had reduced to ?1,99,970. The court decided not to recall or modify the order based on the facts presented, keeping the question of withholding refunds for TDS mismatches across the country open. It was clarified that no part of the refund could be withheld for income tax demands that were either quashed by appellate authorities or tribunals or stayed.

In conclusion, the court disposed of the Notice of Motion, maintaining its earlier order directing the release of the refund after withholding the specified amount, and addressing the discrepancy in the TDS mismatch amount.