Gurcharan Singh Bhatia Vs ACIT (ITAT Delhi)
ITAT Directs TDS Refund Despite Delayed E-Verification; Revenue Cannot Retain Tax on Technical Grounds
The Delhi ITAT held that the Revenue cannot deny refund of TDS merely because the return was e-verified belatedly, particularly when the delay in e-verification had already been condoned by the CPC. The assessee had filed the return for AY 2015-16 within the prescribed time and claimed a refund of ₹17.08 lakh arising from TDS deducted from rental income. However, the return was not e-verified within the stipulated period due to the serious illness of the assessee’s aged father. Subsequently, the CPC condoned the delay and accepted the e-verification in February 2018, yet the refund was never issued.
The Tribunal observed that once the delay in e-verification had been condoned, the return stood regularized and there was no legal justification for withholding the refund. It noted that the TDS deduction was undisputed and duly reflected in the tax records. Denial of refund solely on a procedural lapse, despite condonation, amounted to an unjust retention of tax by the Revenue.
Relying on the decisions of the Karnataka High Court in K. Nagesh v. ACIT and the Gujarat High Court in S.R. Koshti v. CIT, the Tribunal reiterated that tax authorities are duty-bound to ensure that only legitimate taxes are retained and that taxpayers should not be deprived of lawful reliefs on mere technicalities. The Tribunal emphasized that Article 265 of the Constitution mandates that no tax can be retained except by authority of law, and denial of refund in such circumstances would amount to unjust enrichment by the Revenue.
Accordingly, the Tribunal set aside the orders of the Assessing Officer and the JCIT(A) and directed the Revenue authorities to take necessary steps to grant the refund due to the assessee in accordance with law.
FULL TEXT OF THE ORDER OF ITAT DELHI
The appeal of the assessee is directed against the order dated 30.10.2025 of ld. CIT(A)/Addl./JCIT(A)-4, Chennai passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) wherein dismissal order of rectification application u/s 154 seeking refund of the TDS amount was confirmed and the claim of refund of Rs.17,08,200/- on account of TDS deducted as income from house property was denied on the ground that assessee could not e-verified the Income Tax Return within stipulated period.
