Case Law Details
IBM India Private Limited Vs DCIT (Karnataka High Court)
Karnataka High Court issued a judgment in favor of IBM India Private Limited, directing the Income Tax Department to refund a total amount of Rs.154,08,41,927 with applicable interest. This refund relates to IBM India’s assessment years 2008-09 to 2015-16, in accordance with earlier orders from the Supreme Court, the Tribunal, and the High Court. The petitioner contended that, although the principal amount was refunded, the due interest was not paid as mandated by the earlier court orders. In addition to the principal refund, IBM India also sought an additional refund of Rs.59,70,096 for the shortfall of interest granted for the assessment years 2013-14 and 2015-16.
The respondents, representing the Income Tax Department, acknowledged the issue and assured that, upon verification, the refunds would be processed within a stipulated time frame. The Karnataka High Court, after reviewing the material on record, including documents from the previous orders, found in favor of IBM India. The court directed the Income Tax Department to refund the full amount, including the interest on the principal sum, under Section 244A of the Income Tax Act, 1961. The refund was to be completed by April 30, 2024. This decision was made based on the failure of the respondents to comply with the earlier representation made by IBM India regarding the refund. The court also directed the payment of the shortfall in interest for the specified assessment years, along with the applicable interest, further emphasizing the urgency for compliance with the Supreme Court’s directive.
FULL TEXT OF THE JUDGMENT/ORDER OF KARNATAKA HIGH COURT
In this petition, the petitioner has sought for the following relief:
“i) Directing the respondents to forthwith refund an amount of Rs.154,08,41,927/- being determined as due to the petitioner under the orders dated 18.02.2022 and 13.04.2023 passed by R-1 giving effect to the orders passed by the Hon’ble Supreme Court, this Hon’ble Court and the Tribunal for the assessment years 2008-09 to 2015-16 (Annexures A1 – A8) a/w applicable interest (on the amount of Rs.154,08,41,927/-) until the date of grant of the refund.
ii) Directing the Respondents to forthwith refund an amount of Rs.59,70,096/-, being the interest short granted for the assessment years 2013-14 and 2015-16 a/w applicable interest; and
iii) Pass such other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, in the interest of justice and equity. “
2. Heard the learned counsel for the petitioner and the learned counsel for the respondents. Perused the materials 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 invited my attention to the orders at Annexure – A1 to A8 in order to contend that despite the said orders and the petitioner filing application in Form – 26B of the Income Tax Act, 1961 (hereinafter referred to as ‘IT Act’ for short) at Annexures – B1 to B8, the respondents have only refunded the principal component and not the determined interest payable of Rs.154,08,41,927/- as well as shortfall of Rs.59,70,096/- which deserves to be refunded back to the petitioner together with further applicable interest on the petitioner and since the same has not been done by the respondents, the petitioner is before this Court by way of the present petition.
4. Per contra, leaned counsel for the respondents submits that if reasonable time is granted, the respondents would take necessary steps to refund the aforesaid amount of Rs.154,08,41,927/- andRs.5 9,70,096/- after verification together with applicable interest to the petitioner within a stipulated time frame.
5. In view of the aforesaid facts and circumstances and the undisputed material on record comprising of Annexures – A1 to A8 and B1 to B8 and the representation dated 03.01.2024 submitted by the petitioner, which has not been complied with by the respondents so far, I deem it just and appropriate to dispose of the petition directing the respondents to refund a sum of Rs.154,08,41,927/- together with applicable interest back to the petitioner under Section 244A of the IT Act on or before 30.04.2024. In addition thereto, the respondents are also directed to refund Rs.59,70,096/- being the alleged short fall of the interest granted for the Assessment Year 2013-14 and 2015-16 together with applicable interest under Section 244A of the IT Act back to the petitioner after due verification on or before 30.04.2024.
Subject to the aforesaid direction, petition stands disposed off.
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