2023 (11) TMI 656 - HC - Income Tax

Delay in issuing refund - ACIT said that the system (under the control of CPC, Bangalore) needs to capture the refund already approved via web service rectification order and till this issue is resolved proceedings in this case cannot be completed - HELD THAT - This is the standard excuse given by the Department when it comes to giving refunds. The excuse used is that the system under the control of Centralized Processing Center ( CPC ), Bangalore has some issues and, therefore, amount is not being released to assessees. Interest is payable in law until the date of refund and the Department does not realize that it is public money that is used to pay interest. That is a waste and burden on the exchequer. We would only hope that the Finance Ministry looks into it with seriousness and tries to put an end to the problem faced by all assessees and the Income Tax Officers. A copy of this order be sent to the PMO, the Hon ble Finance Minister GOI, the Hon ble Law Minister GOI, the Central Board of Direct Taxes and to the Attorney General for India for information and necessary action. We only hope this problem gets resolved at the earliest. Had the department sorted out its technical issues, totally unrelated to any substantial legal issue, nevertheless contravening the fundamental right of Petitioner to receive undisputed amount of refund, the present proceedings would not have crept into the litigation arena. Respondents either by itself or through CPC shall ensure that the amount is credited to Petitioner s account on or before 4th November 2023 with interest upto the date of payment in accordance with law.

Summary

Issues involved:
The issues involved in this case are related to seeking a refund amount for Assessment Year 2020-21 and the delay in processing the refund due to technical issues at the Centralized Processing Center (CPC) in Bangalore.

Judgment Summary:

Issue 1: Refund amount discrepancy
The Petitioner sought a refund amount of Rs. 19,69,46,789 for Assessment Year 2020-21, but it was noted that the actual amount payable was Rs. 19,79,40,376. The Respondent did not dispute this amount. The Respondent's reliance on an affidavit of reply highlighted technical issues at the CPC in Bangalore causing delays in processing refunds. The Court criticized the Department for using such technical issues as an excuse for delayed refunds, emphasizing the burden it places on the exchequer and the importance of timely refund disbursement. The Court directed the Respondents, either directly or through the CPC, to ensure that the refund amount is credited to the Petitioner's account by a specified date with interest according to the law.

Issue 2: Delay in refund processing
The Court expressed concern over the standard excuse given by the Department regarding technical issues at the CPC causing delays in refund disbursement. The Court highlighted the importance of timely refund payments, emphasizing that interest is payable by law until the date of refund. The Court urged relevant authorities, including the Finance Ministry, to address and resolve the technical issues causing delays in refund processing to prevent unnecessary litigation and burden on the judicial system. The Court emphasized the need for prompt resolution of technical issues to avoid delays in refund disbursement and to reduce the backlog of cases in the judicial system.

Conclusion:
The Court disposed of the petition, granting liberty to apply. The Court directed the Respondents to ensure the timely crediting of the refund amount to the Petitioner's account by a specified date, along with interest as per the law. The Court highlighted the importance of addressing technical issues causing delays in refund processing to prevent unnecessary litigation and burden on the judicial system.