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TMI Blog2020 (7) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... consonance with the legislative intent and mandate of the aforesaid provision. The reasons cited do not support the finding that refund would adversely affect the Revenue. Reasoning given by the Income-Tax Officer is contrary to Section 241A of the Act. Accordingly, we set aside the impugned communication/ order dated 10.01.2020 - grant three 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 as noted above. 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. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the petitioner and accordingly, the present writ petition has been filed seeking directions in this regard. During the course of hearing, the reasons for withholding the refund were provided to the petitioner and consequently, the writ petition was amended to assai the order dated 10th January, 2020 whereby the refund has been withheld. 3. Mr. Mukesh Chand, learned counsel for the petitioner assailed the reasons for withholding the refund by arguing that the action of the respondent is contrary to Section 241A of the Act. He argued that the Income-Tax Officer, with the approval of the PCIT, withheld the refund merely on the ground that the case of the petitioner has been selected for limited scrutiny and cited the same reason for which t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, has already been issued and duly served. The case has been selected m Limited Scrutiny with the following reasons:- i. Claim of Large Value Refund. ii Lower amount disallowed u/s 40(a)(i) in ITR (Part AO-I) in comparison to audit report Amount disallowable under section 40(a)(i) on account of non-compliance with the provisions of Chapter XVII-B as per 3CD 2. Amount disallowable under section 40(a)(i) on account of noncompliance with the provisions of Chapter XVII-B as per Part A-O-I of ITR. The genuineness of refund claimed by the assessee remains to be verified as the assessment is yet to be complete. In view of the above I am satisfies that issued of refund may adversely affect the revenue. 6. From a reading of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for scrutiny assessment, he is justified to withhold the refund of tax. 32. The power of the AO has been outlined and defined in terms of the Section 241A and he must proceed giving due regard to the fact that the refund has been determined. The fact that notice under section 143(2) has been issued, would obviously be a relevant factor, but that cannot be used to ritualistically deny refunds. The AO is required to apply its mind and evaluate all the relevant factors before deciding the request for refund of tax. Such an exercise cannot be treated to be an empty formality and requires the AO to take into consideration all the relevant factors. The relevant factors, to state a few would be the prima facie view on the grounds for the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bjects. Any lapse in this regard tarnishes the image and credibility of the sovereign. It certainly cannot act like any unscrupulous businessman, who is seen to dodge his liabilities by resort to frivolous excuses and devious ways. 8. The exercise of withholding of refund under section 241A of the Act, pursuant to notice u/s 143(2) of the Act, without recording justifiable reasons, is not in consonance with the legislative intent and mandate of the aforesaid provision. The reasons cited do not support the finding that refund would adversely affect the Revenue. In view of the aforesaid, we hold that the reasoning given by the Income-Tax Officer is contrary to Section 241A of the Act. Accordingly, we set aside the impugned communicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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