Refund To An Assessee Could Not Be Withheld Due To Technical Glitches

VODAFONE IDEA LTD. V. CIT (2019) 267 TAXMAN 405 (BOM.)(HC)

THE HIGH COURT HELD THAT

Refund should not be withheld due to somereason of technical glitch, system fails, mismatch of TDS etc. The Concerned AO mustmanually calculate the refund and release the refund . The computer systemand auto generation or any difficulty in doing so in a particular case, cannot overridethe correct legal position.

SECTION 237 OF INCOME TAX ACT, 1961

REFUNDS

If any person satisfies the AssessingOfficer that the amount of tax paid by him or on his behalf or treated as paid by him or on his behalf for any assessment year exceeds the amount with which he is properly chargeable under this Act for that year, he shall be entitled to a refund of the excess.

BRIEF FACTS

1. The return filed by the assessee was scrutinized and the assessment order gave rise torefund of certain sum.

2. Since the refund was not forthcoming, the petitioner wrote severalletters to the department but with no avail.

3. The petitioner pointed out that TDS mismatchof as small as Re. 1 (on account of rounding off of the figure) was cited as reason morethan once for not releasing the refund.

4. On writ, the Court held that when material factsare not disputable, there is no reason why the petitioner should not get the refundwhich flows from the order of assessment.

5. The department does not dispute that thedemands for other assessment years of the petitioner are presently not enforceable.

6. Thatbeing the position, the refund of the petitioner, when facts are not disputable cannot bewithheld, that too on the ground of technical difficulty of the system not accepting sucha declaration of stay of the demands and giving effect to such position.

7. The computersystem and auto generation or any difficulty in doing so in a particular case, cannotoverride the correct legal position.

8. In the present case, the correct legal position is thatthe petitioner must receive the refund. Whatever the technical difficulties in releasing therefund, the department must sort it out. If for some reason of technical glitch, the systemfails to permit the payment of refund, the concerned authorized officer must manually doso.

9. Therefore, the respondent is directed to release the petitioner’s refund amount withstatutory interest.

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