Facts of the Case

The petitioner, Evalueserve.com Pvt. Ltd., filed a writ petition seeking refund of two amounts relating to Assessment Year (AY) 2009–10:

  • ₹17,09,923/-
  • ₹1,21,07,102/-

The petitioner contended that the non-refund of these amounts was unjust, arbitrary, and contrary to provisions of the Income Tax Act, 1961.

The Revenue submitted that:

  • The return for AY 2009–10 was processed under Section 143(1), determining a refund of ₹4,11,870/-, which was already paid.
  • The amount of ₹1,21,07,102/- had been recovered from the petitioner’s bank account due to an outstanding demand.

However, it was admitted that the demand no longer survived.

Issues Involved

  1. Whether the petitioner is entitled to refund of ₹1,21,07,102/- recovered by the Revenue.
  2. Whether the petitioner is entitled to additional refund beyond ₹4,11,870/-.
  3. Whether failure to serve intimation under Section 143(1) affects the petitioner’s rights.
  4. Appropriate remedy for discrepancy in refund amount.

Petitioner’s Arguments

  • The petitioner argued that:
    • The amounts claimed were unlawfully retained by the Revenue.
    • No proper intimation under Section 143(1) was served.
    • The action of withholding refund was arbitrary and violative of statutory provisions.
    • Full refund along with interest was due.

Respondent’s Arguments

  • The Revenue contended:
    • Refund of ₹4,11,870/- had already been issued.
    • The claim of ₹17,09,923/- was not tenable.
    • ₹1,21,07,102/- was recovered due to an outstanding demand.
    • Since the demand no longer survives, refund of the recovered amount may be processed.

Court Findings / Order

The Court held:

  • The Revenue must refund ₹1,21,07,102/- along with applicable interest within four weeks.
  • Regarding the discrepancy between ₹4,11,870/- and ₹17,09,923/-:
    • The petitioner was granted liberty to file a rectification application before the Assessing Officer.
    • If filed within two weeks, the application must be decided within four weeks.

The writ petition was disposed of accordingly.

Important Clarifications

  • Recovery of tax based on a demand that no longer survives mandates refund with interest.
  • Disputes regarding quantum of refund should be addressed through rectification proceedings.
  • Non-service of intimation under Section 143(1) can be a relevant procedural concern but does not automatically determine refund entitlement.

Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS22092023CW106472022_180410.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools.