2025 (3) TMI 233 - HC - Income Tax

Rejection of refund application - department s website indicates that some of the Petitioner s applications seeking refund have been rejected based on the remarks indicated in the last column - as argued such rejection is arbitrary since there was no compliance with natural justice and the Petitioner was denied the opportunity to show how the Petitioner was entitled to a refund - HELD THAT - Respondent should have heard the Petitioner before rejecting the refund applications. The rejection of refund applications involves civil consequences and typically the principles of natural justice must be complied with. At the hearing the Petitioner could possibly have been able to explain why the refunds were due and such refund applications could not have been rejected based upon objections like alleged non-submission of Form-26B etc. On the above grounds we set aside the rejection of the Petitioner s applications seeking a refund. The matters are remitted to the Respondents for fresh consideration. We also direct the Respondents to decide the Petitioner s applications for refund after giving the Petitioner and their representative an opportunity to be heard.

Summary

The Bombay High Court, in a case concerning refund applications, found that the rejection of the Petitioner's applications lacked compliance with natural justice. The Court set aside the rejections, emphasizing the importance of allowing the Petitioner to explain the reasons for the refunds and directing the Respondents to reconsider the applications within 3 months, providing the Petitioner an opportunity to be heard. The Petitioner was also instructed to cooperate and not seek unnecessary adjournments. The Rule was made absolute without cost orders.