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2020 (8) TMI 326 - HC - Income TaxWithholding refund u/s 241A - petitioner seeking refund as determined under intimation issued by Centralised Processing Center (C.P.C.) under Section 143(1) - HELD THAT - Revenue, on instructions states that the respondents, without prejudice to their rights and contentions and without admitting to any illegality are willing to re-consider as to whether Section 241A of the Act is attracted to the present case and pass a fresh order in accordance with the judgments passed in Maple Logistics Private Limited 2019 (11) TMI 340 - DELHI HIGH COURT and Ericsson India Private Limited 2020 (3) TMI 606 - DELHI HIGH COURT . Accordingly, we set aside the impugned order dated 01st June, 2020 as well as the reasons given by the Assessing Officer dated 04th February, 2020 and the approval given by PCIT u/s 241A - We also grant six weeks' time to the respondents to re-consider the aspect whether the amount found due to be refunded, or any part thereof, is liable to be withheld under Section 241A in line with the decisions of this Court -The entire consideration, with the approval of the Principal Commissioner of Income Tax to the withholding of the refund amount, or any part thereof, should be completed within six weeks from today, failing which, we direct that without awaiting any further orders, the respondents shall transmit the amount of refund determined under section 143 (1) of the Act along with interest to the petitioner. In the eventuality of the respondents recording any reasons for withholding a part thereof, or the entire amount due for refund to the petitioner under Section 143(1), the reasons thereof as approved by the Principal Commissioner of Income Tax shall be provided to the petitioner forthwith.
Issues:
Refund of income tax under Section 143(1) of the Income Tax Act, 1961; Withholding of refund under Section 241A of the Act; Revision petition under Section 264 of the Act. Refund of Income Tax under Section 143(1) of the Income Tax Act, 1961: The petitioner filed a writ petition seeking a refund of INR 18,90,35,522 determined by the Centralised Processing Center under Section 143(1) for the assessment year 2018-2019. The petitioner argued that the mere issuance of a notice under Section 143(2) is insufficient to withhold the refund under Section 143(1). The petitioner contended that the reasons for withholding the refund were based on Computer Assisted Scrutiny System (CASS) reasons recorded in the notice under Section 143(2). Additionally, the petitioner challenged the respondent's characterization of their letter as a revision petition and the respondent's authority to entertain a revision petition under Section 264 against its own order. Withholding of Refund under Section 241A of the Act: The High Court directed the respondents to reconsider whether Section 241A of the Act applied to the case and to pass a fresh order in line with specific judgments. The impugned order dated June 1, 2020, along with the reasons given by the Assessing Officer and the approval by the Principal Commissioner of Income Tax under Section 241A, were set aside. The respondents were granted six weeks to reassess whether the refund amount should be withheld under Section 241A, as per the court's directions. If the reassessment was not completed within the stipulated time, the respondents were instructed to transmit the refund amount along with interest to the petitioner. The court emphasized that any reasons for withholding the refund should be provided to the petitioner promptly, allowing them to take necessary remedial steps. Revision Petition under Section 264 of the Act: The court disposed of the writ petition in accordance with the directions provided, granting relief to the petitioner regarding the refund of income tax. The order was uploaded on the website and forwarded to the respective counsels via email. The judgment highlighted that reasons for withholding the refund under Section 241A should not hinder the Assessing Officer from framing the assessment under Section 143(3) of the Act.
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