The Bombay High Court bench of Justice N.R. Borkar and Justice K.R. Shriram has asked the department to explain why an officer delaying an income tax refund should not be directed to pay interest from his pocket.
The petitioner/assessee submitted that though there had been an intimation on November 23, 2021, under Section 143(1) of the Income Tax Act, 1961, that the petitioner was entitled to a refund of Rs. 64.92 crores, the petitioner had not received the refund. The petitioner sent reminders and still did not get the refund. The petitioner was informed to wait for some time.
The income tax department in the “Citizen’s Charter 2014, a declaration of our commitment to the taxpayers” said that the issue of a refund along with interest under Section 143(1) Income Tax Act, 1961 will be made within six months from the date of the return and that returns were filed on February 15, 2021.
The court has given two weeks’ time to the respondent (not below the rank of Assistant Director of Income Tax) to file an affidavit in reply and serve a copy explaining why the refund was not issued.
The court directed the respondent to explain why the concerned officer, who was delaying the refund, should not be penalised as much as why he should not be directed to pay the interest from his pocket on the refund. Though the petitioner will be getting a refund with 6% interest, it is public money that is being used to pay the interest.
“In our view, CBDT should be informed about this order because a similar order has been passed yesterday, i.e., March 23, 2022, in another matter. This Court fails to understand why when refund is admittedly due, the Department is reluctant to issue the refund orders and pushing the assessee to rush to the Court,” the court said.
Case Title: Tata Projects Limited Versus Deputy Commissioner of Income Tax