Nirmalkumar Mulchand Puruswani Vs ITO (Bombay High Court)
Bombay High Court has taken a firm stance on bureaucratic delays in issuing tax refunds, directing that interest on delayed refunds be recovered from the responsible officers of the Income Tax Department. This ruling came in the case of Nirmalkumar Mulchand Puruswani Vs ITO, where the petitioners had been awaiting refunds for nearly two decades due to the department’s failure to give effect to an Income Tax Appellate Tribunal (ITAT) order from July 31, 2006. The court’s decision underscores the principle of accountability within public service and aims to prevent the state exchequer from bearing the financial burden of official negligence.
The petitioners’ grievance centered on the significant delay in processing their refunds, amounting to ₹6,03,482 and ₹5,98,274 respectively, despite the ITAT having set aside original assessment orders and remanding the matters for de-novo decisions. The ITAT order, issued in 2006, mandated that the Assessing Officer (AO) provide adequate hearing opportunities and make new assessments. However, as of January 2025, no assessment orders had been made, effectively depriving the petitioners of their due refunds for almost 17 years. The petitioners argued that such inaction and delay violated fundamental constitutional provisions, including Articles 300A (right to property), 265 (no tax save by authority of law), and 14 (equality before law), deeming the department’s retention of funds arbitrary.
