2023 (12) TMI 986 - HC - Income Tax

Adjustment of refund against challan filled under VsV Scheme - calculation of interest u/s 244A - credit of the said challan was not given in Form 3 Form 5 under VsV as the challan was not visible on the PAN of assessee due to the fact that assessee deposited the challan on incorrect PAN - As argued interest u/s 244A will not be allowed to assessee on the amount of the refund as the delay in issue of refund is attributable to assessee and also the matters is settled under VsV 2020 - HELD THAT - Revenue are agreeable to refund the money after giving credit qua the same in the challan which concededly requires correction. The amount to be credited and thereafter remitted to the petitioner/assessee would be Rs. 25 lakhs, even according to the respondents/revenue. However, the respondents/revenue have indicated that interest under Section 244A of the Income Tax Act, 1961 in short, the Act would not be paid to the petitioner/assessee. Assessee, says that insofar as the proceedings under Direct Tax Vivad Se Vishwas Act, 2020 in short, 2020 Act are concerned, they are positioned at the stage of acceptance of Form-3. Also albeit on instructions also states that the petitioner/assessee will be agreeable to correction of the challan and receipt of Rs. 25 lakhs, sans the interest. Therefore, the writ petition is disposed of with a direction that the concerned authority will progress the matter under the 2020 Act, as per law, from the stage at which it is presently positioned. n so far as correction of the challan is concerned, steps in that behalf will be taken by the respondents/revenue and consequential refund of Rs. 25 lakhs would be made. This exercise will be completed within three (3) weeks of the receipt of a copy of the order passed today.

Summary

Issues involved:
The issues involved in the judgment are correction of challan for Assessment Year (AY) 2003-04, refund amount discrepancy, and interest under Section 244A of the Income Tax Act, 1961.

Correction of Challan:
The petitioner sought correction of the challan for AY 2003-04 to reflect the refund amount accurately. The respondents/revenue agreed to correct the challan and refund Rs. 25 lakhs to the petitioner/assessee. The respondents/revenue explained that the credit of the challan was not initially given in Form-3 and Form-5 under the Direct Tax Vivad Se Vishwas Act, 2020 due to the challan being deposited on an incorrect PAN. However, upon receiving the correct details from the assessee, the correction was made. It was clarified that the forms under the Act are final and cannot be revised. The refund amount to be credited and remitted would be Rs. 25 lakhs, but interest under Section 244A of the Income Tax Act, 1961 would not be paid to the petitioner/assessee.

Refund Amount Discrepancy:
The respondents/revenue agreed to refund the money after crediting the correct amount in the challan. The amount to be refunded was confirmed to be Rs. 25 lakhs. The petitioner/assessee, through their counsel, agreed to accept the corrected challan and the refund amount without claiming interest. The judgment directed the concerned authority to progress the matter under the Direct Tax Vivad Se Vishwas Act, 2020 from its current stage. The correction of the challan and the refund process for Rs. 25 lakhs were ordered to be completed within three weeks of the order.

Interest under Section 244A:
The judgment noted that interest under Section 244A of the Income Tax Act, 1961 would not be allowed to the petitioner/assessee on the refund amount. The delay in issuing the refund was attributed to the assessee, and the matter was settled under the Direct Tax Vivad Se Vishwas Act, 2020. The petitioner's counsel confirmed that they would not claim interest on the refunded amount of Rs. 25 lakhs. The order specified that parties should act based on the digitally signed copy of the judgment, and the relevant email correspondence was to be scanned and uploaded for record-keeping purposes.