Bombay High Court imposed interest burden on the erring officer for delayed issue of the Refund – Accountability fixed
In a landmark decision, the Bombay High Court has drawn a sharp line against administrative negligence in the income tax system.
In the case of Nirmalkumar Mulchand Puruswani vs. Income-tax Officer [2025] 173 taxmann.com 270 (Bom), the Court strongly condemned the 17-year delay in issuing tax refunds despite a binding ITAT order. The department attempted to defend the delay citing “restructuring,” “record loss,” and “jurisdictional changes.” But the Court wasn’t convinced.
Instead, it delivered a powerful message:
“The financial liability for delay must not fall on the State Exchequer or taxpayers. It must be recovered from the officials responsible.”
This is a significant step forward for taxpayer rights and accountability. The Court ordered:
• Refunds to be issued by a specific date.
• Interest at 6% p.a. to be paid for delays.
• Interest to be recovered from erring officers, not the public treasury.
This judgment underlines a fundamental principle of governance — public officials must be accountable for inaction. Passing the cost of negligence onto taxpayers only breeds distrust and inefficiency.
The case reinforces that constitutional protections under Articles 14, 265, and 300A cannot be ignored in tax administration.
Let us appreciate the judiciary which is establishing the accountability of the other side as well. Hope CBDT should come out with more voluntary compliance methodology to ensure that the officers are made equally responsible, not taxpayers alone.
The copy of the order is as under:
