System default is the standard excuse while delaying refunds: Bombay HC


System default is the standard excuse while delaying refunds: Bombay HC


Matrix Publicities and Media India Pvt. Ltd. Versus Deputy Commissioner of Income Tax Circle- 16(1), Mumbai & Ors. (Writ Petition (L) No.16764 Of 2023)



  1. The petition seeks a refund amount of Rs. 19,69,46,789 for Assessment Year 2020–21. The jurisdictional officer has sent a letter or email to Central Processing Centre (CPC) for early capture or update of the refund details as determined in the ITBA portal so that the final manual order can be passed by the respondent.
  1. The system (under the control of CPC, Bangalore) has to capture the refund already approved via the web service rectification order passed on July 29, 2023. Until the issue is resolved, proceedings in the case cannot be completed and refund cannot be granted.


Hon. Bombay HC held as below:

  1. The excuse used is that the system under the control of the Centralized Processing Center (CPC), Bangalore, has some issues and, therefore, amounts are not being released to assessees. Interest is payable by law until the date of refund, and the Department does not realize that it is public money that is used to pay interest. That is a waste and a burden on the exchequer.
  1. We would only hope that the Finance Ministry looks into it with seriousness and tries to put an end to the problem faced by all assessees and the Income Tax Officers. A copy of this order should be sent to the PMO, the Hon’ble Finance Minister GOI, the Hon’ble Law Minister GOI, the Central Board of Direct Taxes, and the Attorney General for India for information and necessary action. We only hope this problem gets resolved at the earliest.
  1. The system default is the standard excuse of the department when it comes to giving refunds. Had the department sorted out its technical issues, totally unrelated to any substantial legal issue, nevertheless contravening the fundamental right of the petitioner to receive an undisputed amount of refund, the present proceedings would not have crept into the litigation arena.
  1. The department, either by itself or through CPC, should ensure that the amount is credited to the petitioner’s account on or before November 4, 2023, with interest up to the date of payment in accordance with the law.