Case Law Details
M N Dastur & Company Pvt. Ltd. Vs DCIT (Karnataka High Court)
Refund Justice – Tribunal Allowed, Yet Refund Delayed? HC Steps In to direct IT Dept to Release Dues within 8 Weeks; Karnataka HC Directs IT Dept to Grant Refund with Interest Pursuant to ITAT’s Order
Karnataka High Court considered a petition filed seeking enforcement of refund pursuant to the order of the Tribunal.
M N Dastur & Company Pvt. Ltd., a company registered under the Companies Act, had succeeded before the Tribunal in ITA Nos.118 & 119/2022 for AYs 2015-16 & 2016-17. Tribunal by order dated 26.05.2022 directed AO to examine & grant refund along with interest u/s 244A(1) & 244A(1A).
Despite repeated representations on 30.05.2022, 04.08.2023, 06.08.2024 & 18.10.2024, Revenue failed to pass an Order Giving Effect (OGE) or grant the refund. Aggrieved by this inaction, Assessee approached the High Court.
Petitioner submitted that once the Tribunal’s order has attained finality, the Department is duty-bound to give effect to it. The withholding of refund despite clear appellate directions is arbitrary & violative of law.
Revenue’s counsel submitted that if reasonable time is granted, necessary steps would be taken to comply with the Tribunal’s order & process the refund in accordance with law.
The Court noted that ITAT’s order dated 26.05.2022 had clearly directed examination of the refund claim & payment of interest. Delay in issuing refund despite multiple representations was unjustified.
The High Court directed the Department to pass OGE to the Tribunal’s order dated 26.05.2022. Refund along with statutory interest u/s 244A(1) & 244A(1A) shall be granted. The entire exercise must be completed within 8 weeks from the date of receipt of this order.
This ruling reinforces that once the Tribunal grants relief, the Revenue is bound to give effect promptly & cannot indefinitely withhold refunds. Courts will intervene to ensure taxpayers get their legitimate dues along with interest u/s 244A.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, the petitioner seeks for the following reliefs:
“i) Directing the 1st respondent to pass the order giving effect to the order of the ITAT and issue the refund along with interest under Section 244A(1) and 244A(1A) of the Act within reasonable time as may be prescribed by this Hon’ble Court;
ii) Pass such other or further orders as this Hon’ble Court deems fit in the facts and circumstances of the case, in the interest of justice and equity.”
2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.
3. In addition to reiterating the various contentions urged in the petition and referring to the material on record, learned counsel for the petitioner submits the limited grievance of the petitioner is that pursuant to the order dated 26.05.2022 passed by the Income Tax Appellate Tribunal in ITA No.118/2022 and 119/2022 for the assessment year 2015-16 and 2016-17 has allowed the appeal and directed the Assessing Officer to examine and consider the claim of refund along with interest. The petitioner submitted a representations dated 30.05.2022, 04.08.2023, 06.08.2024 and 18.10.2024, despite which, the respondents are not taking any steps to give effect to the said order and has not granted refund under Section 244A(1) and 244A(1A) of the Income Tax Act and as such the petitioner is before this Court by way of the present petition.
4. Per contra, learned counsel for the respondent submits that if reasonable time is granted, respondent would take necessary steps pursuant to the aforesaid order and issue refund in accordance with law.
5. In view of the aforesaid facts and circumstances, petition stands disposed of directing the concerned respondent to pass an Order Giving Effect (OGE) to the order dated 26.05.2022 referred to supra passed by the Income Tax Appellate Tribunal in ITA No.118/2022 and 119/2022 for the assessment year 2015-16 and 2016-17 and grant/issue refund along with interest within a period of eight weeks from the date of receipt of copy of this order.
6. Subject to the aforesaid directions, petition stands disposed of.
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