Facts of the Case

The petitioner, Intertek India Private Limited, filed a rectification application dated 25.05.2016 under Section 154 of the Income Tax Act, 1961. The grievance raised was that the said rectification application had not been disposed of by the concerned Assessing Officer despite the statutory time limit prescribed under law.

The petitioner approached the High Court seeking a writ of mandamus directing the respondent to dispose of the rectification application and grant consequential refund along with applicable interest under Section 244A.

It was noted that the statutory timeline for disposal of a rectification application is six months, which had been significantly exceeded in the present case.

Issues Involved

  1. Whether the delay in disposal of the rectification application by the tax authorities violates the statutory timeline prescribed under Section 154.
  2. Whether the petitioner is entitled to interest under Section 244A for the delayed period.
  3. Whether delay and laches on part of the petitioner in approaching the Court affects relief entitlement 

Petitioner’s Arguments

  • The petitioner contended that the rectification application filed in 2016 had not been disposed of even after several years, which is contrary to the statutory mandate under Section 154.
  • It was argued that as per Section 154(8), the authority is required to dispose of such application within six months.
  • The petitioner sought directions for expeditious disposal along with grant of refund and applicable interest under Section 244A.

Respondent’s Arguments

  • The respondent did not file a counter affidavit and agreed to argue based on available records.
  • The Revenue did not substantially dispute the delay but contested the entitlement to full interest, especially considering the petitioner’s delay in approaching the Court.

Court Findings / Order

  • The Court acknowledged that the statutory timeline of six months under Section 154 had been exceeded.
  • However, the Court also observed that the petitioner approached the Court after an unreasonable delay of more than seven years.
  • The Court held that repeated representations do not justify such delay and laches.

Directions Issued:

  1. The concerned officer shall dispose of the rectification application within four weeks from receipt of the judgment.
  2. The Assessing Officer shall consider that the first formal representation was made on 09.10.2019.
  3. Interest under Section 244A shall not be granted for the period between:
    • Expiry of six months from filing of rectification application, and
    • 09.10.2019

Important Clarification

The Court clarified that:

  • While statutory timelines are mandatory, litigants must also act within reasonable time.
  • Delay and laches on part of the petitioner can lead to denial or restriction of consequential benefits such as interest. 

 Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS31082023CW115172023_215602.pdf 

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