Introduction: The recent judgment by the Delhi High Court in the case of “Intertek India Private Limited Vs ACIT” sheds light on the importance of timely disposal of rectification applications under the Income Tax Act, 1961. The court’s directive to dispose of the application within four weeks has raised questions about the prolonged delay in this case.
Detailed Analysis: The crux of the petitioner’s grievance revolves around the inordinate delay in processing their rectification application, dated 25.05.2016. According to sections 154(a) and 154(8) of the Income Tax Act, the statutory timeline for such disposal is six months. This statutory timeline was reinforced by Instruction No.1 of 2016 dated 15.02.2016.
However, what raises eyebrows is the fact that the petitioner did not approach the court within a reasonable period. Despite repeated representations to the Assessing Officer (AO) and grievances sought, the delay persisted for over seven years. This delay cannot be adequately explained solely by the petitioner’s interactions with the AO.
The court’s decision to dispose of the writ petition with specific directions is noteworthy. First, it mandates the concerned officer to resolve the rectification application within four weeks of receiving the judgment. Second, the court has taken into account that the first representation to the respondent was made on 09.10.2019. Consequently, it rules that interest between the period after six months from the application’s filing date and 09.10.2019 need not be paid to the petitioner.
Conclusion: The Delhi High Court’s decision in the case of Intertek India Private Limited Vs ACIT serves as a reminder of the importance of adhering to statutory timelines for rectification applications. While the petitioner’s grievances were acknowledged, the court also emphasized the need for timely action.
This judgment underscores the significance of prompt resolution of tax-related matters to prevent unnecessary delays and protracted legal battles. It sends a message that both taxpayers and tax authorities should act diligently to ensure the efficient administration of tax laws.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
1. Issue notice.
2. Mr Abhishek Maratha, learned senior standing counsel who appears on behalf of the respondents/revenue, accepts notice.
3. Given the directions that we propose to pass, Mr Maratha says that he does not wish to file a counter-affidavit in the matter, and he will argue the matter based on the record presently available with the Court.
3.1. Therefore, with the consent of the learned counsels for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself.
4. The substantial prayer made in the writ petition, in essence, articulates the grievance of the petitioner. Therefore, for the sake of convenience, the prayer made is set forth hereafter:
“(a) Issue a Writ of mandamus, or a Writ in the nature of mandamus, or any other appropriate Writ or Order directing the Respondent to dispose of Petitioner’s Rectification Application dated 25.05.2016 within a period of four weeks and grant consequential refund along with applicable interest under Section 244A of the Act within the said four weeks.”
5. A perusal of the prayer clause would show that the petitioner is aggrieved by the fact that its rectification application dated 25.05.2016 has not been disposed of, as yet.
6. As rightly averred by the petitioner, the timeline fixed under sections 154(a) and 154(8) of the Income Tax Act, 1961 [in short, “the Act”], is six (6) months. The period involved goes way beyond the statutory timeline fixed for the disposal of a rectification application. This is also the position that obtains as per Instruction No.1 of 2016 dated 15.02.2016.
7. That said, we find it difficult to understand why the petitioner did not approach the Court within a reasonable period. Repeated representations to the Assessing Officer (AO) and grievances sought cannot explain, in our view, the delay and laches in approaching the Court. The period involved is more than seven (7) years.
7.1. Therefore, we dispose of the writ petition with the following directions:
(i) The concerned officer will dispose of the rectification application within four (4) weeks of receipt of a copy of the judgment.
(ii) The AO will bear in mind that the first representation to the respondent was made on 09.10.2019. We are therefore, of the opinion that interest between the period after the expiry of six (6) months from when the rectification application was filed and 09.10.2019 in the facts of this case, ought not to be paid to the petitioner.
8. Parties will act based on the digitally signed copy of the order.