Delay in issue of Refund- Why interest should not be recovered erring Officer? – Bombay High Court

Delay in issue of Refund- Why interest should not be recovered erring Officer? – Bombay High Court

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Delay in issue of Refund- Why interest should not be recovered erring Officer? – Bombay High Court

In a landmark decision by Bombay High Court in the case of Tata Projects Limited Vs DCIT, the court has  directed that Within two weeks from today, respondent no.4 and respondent no.5 (not below the rank of Assistant Director of Income Tax) shall file an affidavit in reply and serve a copy thereof explaining why the refund is not being issued.
Further, the court also asked Respondent nos.4 and 5 to explain why the concerned officer, who is delaying the refund, should not be penalized in as much as why he should not be directed to pay the interest from his pocket on the refund?
The court finally remarked as under:
“We note this because though petitioner will be getting refund with 6% interest, it is public money that is being used to pay the interest. Refund in question is Rs. 65 crore”.
The copy of the landmark order as under:
Bombay High Court
Tata Projects Limited
 Vs 
DCIT
No. 1578 of 2022
Date of Order: 24/03/2022
1 Petitioner’s grievance is that though there has been an intimation on 23rd November 2021 under Section 143(1) of the Income Tax Act, 1961 (the Act) that petitioner was entitled to a refund of Rs.64,92,16,450/-, petitioner has not received the refund. Petitioner has sent reminders and still did not get the refund. Infact petitioner has been informed to wait for some time.
2 To the petition is also annexed a photocopy of “Citizen’s Charter 2014, a declaration of our commitment to the taxpayers” by the Income Tax Department where it says issue of refund alongwith interest under Section 143(1) of the Act will be made within six months from the date of the return and in this case, indisputably, returns was filed on 15th February 2021.
 3 Mr. Suresh Kumar requests for two weeks time to file reply. Though we are not inclined to grant any time nevertheless in view of the deadline of 31st March 2022 to complete assessment, we are granting the indulgence.
4 Within two weeks from today, respondent no.4 and respondent no.5 (not below the rank of Assistant Director of Income Tax) shall file an affidavit in reply and serve a copy thereof explaining why the refund is not being issued. Respondent nos.4 and 5 shall also explain why the concerned officer, who is delaying the refund, should not be penalized in as much as why he should not be directed to pay the interest from his pocket on the refund. We note this because though petitioner will be getting refund with 6% interest, it is public money that is being used to pay the interest
5. Stand over to 13th April 2022.
6 In our view, CBDT should be informed about this order because a similar order has been passed yesterday, i.e., 23rd March 2022, in another matter. This Court fails to understand why when refund is admittedly due, the Department is reluctant to issue the refund orders and pushing the assessee to rush to the Court.

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