Case Law Details
Vodafone Mobile Services Ltd Vs ACIT & Anr. (Delhi High Court)
Conclusion: Refund claim of Vodafone’s worth Rs. 4759.74 Crores was rightly rejected as Revenue had the right to adjust the substantial outstanding demands against the refunds that arose but had not yet been determined due to ongoing scrutiny proceedings.
Held: In the present case, assessee filed a writ petition on account of inaction on the part of the Assistant Commissioner of Income Tax in not processing income tax returns for four Assessment Years which would result in issuance of refunds aggregating to Rs. 4759.74 crores along with applicable interest under Section 244A. It duly submitted that it was under financial stress and no recoverable demands were foreseeable, thus stating that there was no ground for delaying the processing of the returns and issuance of the consequent refunds. AO had exercised discretion under Section 143(1D) not to process the returns considering the pending special audit, pending scrutiny, substantial demand of amount more than 4500 crores had been raised on completion of scrutiny assessment of earlier years. It was held there was some merit in AO’s stand that substantial outstanding demand was pending against assessee and the likelihood of substantial demands upon assessee after the scrutiny for the AYs was completed, could not be ruled out. Thus, Revenue should have the right to adjust the demands against the refunds that arise but had not yet been determined due to ongoing scrutiny proceedings.
FULL TEXT OF THE HIGH COURT ORDER / JUDGEMENT
1. The present Writ Petition No.2730/2018 is filed by the petitioner (hereafter “Vodafone”) under Article 226 and 227 of the Constitution of India on account of inaction on the part of the Assistant Commissioner of Income Tax (hereafter referred as “respondent”) in not processing income tax returns for four Assessment Years (hereafter referred as “AY”) 2014-15 to 2017-18 (hereafter referred as the “relevant period under consideration”) which will result in issuance of refunds aggregating to Rs.4759.74 crores along with applicable interest under Section 244A of the Income Tax Act (hereafter referred as “Act”). A tabular depiction of the claims for refund for the aforementioned AYs is as under:-
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