Sahil Total Infratech Pvt. Ltd. Vs ACIT (Gujarat High Court)
Summary: The Hon’ble Gujarat High Court directed the Income Tax Department to pay interest at 6% per annum on a delayed tax refund due to a company under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act). Despite the department’s argument that interest is not payable under the DTVSV Act, the Court held that the tax authorities were liable to pay interest for the period they retained the refund amount, applying the principle established by the Supreme Court in the Tata Chemical’s case.
Facts of the Case
M/S Sahil Total Infratech Pvt. Ltd. had opted for the Direct Tax Vivad Se Vishwas Scheme 2020 and filed an application which was approved by the designated authority. The Jurisdictional Assessing Officer passed a refund order on May 12, 2022, determining that the petitioner was entitled to a refund of Rs. 2,20,41,042/-.
The petitioner claimed that despite validating their bank account on the tax portal multiple times (in May 2022 and again in March 2023), they did not receive the refund. The petitioner had closed their HDFC Bank account in July 2022 and had subsequently opened and validated an account with Union Bank of India.
