Case Law Details
Mcnally Bharat Engineering Company Limited Vs ACIT (Calcutta High Court)
Mcnally Bharat Engineering Company Limited (Petitioner) filed a writ petition seeking refund of Rs. 20,14,56,936/- from Assistant Commissioner of The Income Tax (Respondent) who withheld the refund determined under Section 143(1) of the Income Tax Act, 1961 (IT Act) of the Petitioner for assessment year 2018-19 computed in accordance with provisions of Section 244A of the IT Act.
The Petitioner contended that the Respondent withheld the refund as per provision of Section 241A of the IT Act, however, in order to invoke the same, the Respondent had to form an opinion that the grant of refund is likely to adversely affect the revenue which it failed to do so.
The Hon’ble High Court of Calcutta relying on a principle laid down in the judgment of Nazir Ahmad vs. King Emperor [AIR 1936 PC 253], which provided that “if a statute provides an act to be done by a particular authority and in a particular manner, it should only be done by that authority and in that manner or not at all” noted that the Respondent acted arbitrarily by withholding the refund without assigning any reason though the statute mandates for recording the same.
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