Hindustan Petroleum Corporation Limited Vs DCIT (ITAT Mumbai)
The Income Tax Appellate Tribunal (ITAT) Mumbai recently set aside an order passed by the Commissioner of Income Tax (Appeals) [CIT(A)] in the case of Hindustan Petroleum Corporation Limited (HPCL) vs. Deputy Commissioner of Income Tax (DCIT). The case revolves around interest on refunds for the assessment year 2011-12. HPCL had filed an appeal challenging the denial of interest on refunds, which the CIT(A) dismissed, claiming the matter was settled under the now-defunct Vivad Se Viswas Scheme (DTVSVS) 2020.
This is the second round of litigation in this matter. Initially, assessment was completed for AY 2011-12, and subsequent appeals led to a tribunal order in 2021, which was disposed of due to the DTVSVS. However, a dispute arose regarding the scope of issues covered by the DTVSVS. HPCL argued that the interest on refund issue was not part of the settled dispute. The tribunal, in a previous order, had directed the CIT(A) to determine whether the interest issue was indeed covered by the DTVSVS and then decide the appeal on merits.
Despite the tribunal’s clear directions, the CIT(A) again dismissed HPCL’s appeal, citing the DTVSVS, without addressing the tribunal’s order or providing reasons. The ITAT criticized the CIT(A)’s disregard for its previous order and emphasized the need for a reasoned decision. The ITAT stressed the CIT(A)’s obligation to first decide the grounds of appeal on merits, and then, if deemed applicable, provide specific reasoning as to why the DTVSVS covers the issue.
The ITAT, therefore, quashed the CIT(A)’s order and directed the CIT(A) to hear the case afresh. The tribunal specifically instructed the CIT(A) to first adjudicate on the merits of HPCL’s appeal regarding interest on refunds. Only after this, if the CIT(A) believes the matter falls under the DTVSVS, should they provide detailed reasoning for that conclusion.
FULL TEXT OF THE ORDER OF ITAT MUMBAI
