Interglobe Enterprises Private Limited Vs PCIT (Delhi High Court)
Delhi High Court has ruled in favor of Interglobe Enterprises Pvt. Ltd. in its dispute with the Principal Commissioner of Income Tax (PCIT) over the double taxation of ₹1.51 crore as interest income. The case revolved around whether interest on an income tax refund received for Assessment Years (AY) 2009-10 and 2010-11 should be taxed in AY 2012-13 or AY 2014-15. The court found that the amount had been taxed twice and directed the Commissioner to reassess the matter.
The dispute began when Interglobe Enterprises declared ₹1.51 crore as interest income in its AY 2014-15 tax return. However, during reassessment proceedings for AY 2012-13, the tax authorities included the same amount in taxable income, leading to double taxation. Despite accepting the tax liability for AY 2012-13 under the Direct Tax Vivad Se Vishwas Act, 2020, the company’s request for revision of its AY 2014-15 assessment under Section 264 of the Income Tax Act was rejected. The Commissioner held that the issue did not fall within the scope of revision under Section 264, prompting Interglobe Enterprises to challenge the decision in court.
The Delhi High Court relied on judicial precedents, including CIT v. Shelly Products (2003) 5 SCC 461, where the Supreme Court ruled that excess tax paid due to an inadvertent error must be refunded. Additionally, Vijay Gupta v. CIT Delhi-XIII (2016 SCC OnLine Del 1961) affirmed that Section 264 empowers tax authorities to correct mistakes made by both tax officials and taxpayers. The court also cited Dwarka Nath v. ITO (1965) 3 SCR 536, reinforcing that the Commissioner’s jurisdiction under Section 264 is judicial in nature, requiring a fair and reasonable decision.
