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TMI Blog2020 (3) TMI 968X X X X Extracts X X X X X X X X Extracts X X X X ..... d have no direct application in the case in hand as the grievance is against order under Section 241A of the Act. It would be further pertinent to note here that there is no dispute raised by the respondents that as on date refunds are due to the petitioner as per communication of processing of return under Section 143(1). Respondents have not disputed that in the return filed by the petitioner for the assessment year 2019-20, the total income declared is more than ₹ 550 crores and refund of more than ₹ 183 crores has been claimed. It cannot be lost sight of that the revenue is not in a position to deny that the petitioner is running its business, the returns being filed are of almost more than ₹ 200 crores, there are no arrears of tax relating to any assessment year and the refund is being claimed every year. There is no allegation that the tax is not being paid or there is any irregularity in filing the returns. The contention of the respondents to remit the matter back is not found worth acceptance as in the present case, there are no reasons even in the record to support the finding that refund would adversely affect the revenue and the note in approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in case of grant of refund; (iii) the Assessing Officer has to get previous approval of the Principal Commissioner or Commissioner; and (iv) the reasons are to be recorded in writing. In cases where the above said conditions are fulfilled, Section 241A empowers withholding of refund. The check mechanism is inbuilt in the provision i.e. for reasons to be recorded in writing. This ensures that opinion of the Assessing Officer is based on some material. The relevant clauses of extracts explaining relevant provisions of Finance Bill of 2017 are reproduced below: Processing of return within the prescribed time and enable withholding of refund in certain cases The provisions of sub-section (1D) of section 143 provide that the processing of a return shall not be necessary, where a notice has been issued to the assessee under sub-section (2) of the said section. Amendment to the said sub-section brought by Finance Act, 2016 provides that with effect from assessment year 2017-18, processing under section 143(1) is to be done before passing of assessment order. In order to address the grievance of delay in issuance of refund in genuine cases which are routinely selected fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 019 and 8.11.2019 was received requesting expeditious processing of return and issue of refund of ₹ 252.45 Cr. for the A.Y. 2018-19 and ₹ 48.35 Cr for the A.Y. 2017-18. The request for issue of refund of the assessee has been perused. It is seen that in past few years huge addition have been made including upward adjustments on the issue of transfer pricing leading to raising of huge demand on completion of scrutiny assessment u/s 143(3) of the IT Act, 1961. It is further seen that scrutiny assessment proceedings in this case for A.Y. 2016-17, 2017-18 and 2018-19 are presently pending as on date. For A.Y. 2016-17 order u/s 92 CA(3) has already been received from the Transfer Pricing Officer proposing upward adjustment. For A.Y. 2018-19, reference has already been made to the TPO. Since similar issues are involved in all the three A.Ys for which the scrutiny assessment are pending and there is likelihood of huge demand being raised for these years as well. In view of the above facts, the undersigned is of the opinion that grant of refund for the A.Y. 2017-18 and 2018- 19 before completion of scrutiny assessment is likely to adversely affect the collection of revenue a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re would be a similar addition in this year or not and lastly the demand, if created, is huge or not. It is submitted that all three aspects have been duly mentioned in the impugned order. The authorities while invoking Section 241A lost sight that mere pendency of the proceedings under Section 143(2) in itself is not enough to withhold the refund. Had that been the case, the language of provision of withholding would have been couched differently. The selection of case for scrutiny does not automatically amounts to withholding of refund. We have perused the record, no reasons apart from one mentioned in the order are there. The note of approval of the Princial Commissioner was also perused by us, the only reason mentioned was that there was an amount outstanding of ₹ 5 crores odd against the petitioner and for the said reason, the refund is withheld. Learned counsel for the petitioner disputed the fact and submitted that the said demand was set aside. Be that as it may, the pendency of demand of ₹ 5 crores cannot be a ground for withholding almost refund of ₹ 300 crores, as per Section 245, the due amount could be set off against the refund due. In the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al Chief Commissioner of Income Tax and others , decided on 14.10.2019. Reliance of the petitioner is that order under Section 241A was set aside as no reasons were mentioned as to why refund is likely to adversely affect the revenue. The revenue contends that the order was set aside and the matter was remitted back to decide the issue afresh. The contention of the respondents to remit the matter back is not found worth acceptance as in the present case, there are no reasons even in the record to support the finding that refund would adversely affect the revenue and the note in approval file that there was demand of ₹ 5 crores pending has been found not good enough to withhold the refund of more than ₹ 300 crores. Even the officials present in Court were not in a position to cite any material or reason with regard to adverse affect of refund on revenue, it would be an exercise in futility to give another opportunity. In view of the above, writ petition is allowed. The impugned order is quashed. The respondents are directed to issue refund for the assessment year 2017-18 and 2018-19 along with statutory interest not later than within four weeks from receipt of cert ..... X X X X Extracts X X X X X X X X Extracts X X X X
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