Facts of the Case

The petitioner, PTC India Ltd., filed a writ petition seeking directions against the Income Tax Department for failure to give effect to an appellate order dated 26.09.2018 passed by the Commissioner of Income Tax (Appeals) under Section 250 of the Income Tax Act.

Despite the appellate order granting relief, the respondent authorities did not pass the consequential appeal effect order under Section 153, nor did they grant the refund along with statutory interest under Section 244A. 

Issues Involved

  1. Whether the Income Tax Department is obligated to pass an appeal effect order pursuant to an order of the CIT(A) under Section 250.
  2. Whether the petitioner is entitled to a refund along with interest under Section 244A upon such appeal effect being given.
  3. Whether a writ of mandamus can be issued directing the revenue authorities to implement the appellate order.

Petitioner’s Arguments

  • The petitioner contended that the appellate order dated 26.09.2018 had attained finality and required implementation.
  • It was argued that failure to pass an appeal effect order under Section 153 was arbitrary and contrary to law.
  • The petitioner further submitted that it was entitled to consequential refund along with statutory interest under Section 244A.
  • Relief was sought through a writ of mandamus directing the respondents to implement the CIT(A)’s order and grant refund with interest.

Respondent’s Arguments

  • The respondent/revenue accepted notice and, considering the nature of the direction proposed by the Court, stated that no counter-affidavit was required.
  • The matter was taken up for final disposal at the admission stage itself with consent of both parties.

Court’s Findings / Order

  • The Court observed that the petitioner’s grievance was limited to non-implementation of the CIT(A)’s order and grant of consequential relief.
  • It held that the respondents are obligated to pass an appeal effect order under Section 153 of the Act.
  • The Delhi High Court disposed of the writ petition with the following directions:
    • The respondents shall pass the appeal effect order under Section 153.
    • The order must be passed within eight weeks from receipt of the Court’s order.
    • While passing the order, the authority must also consider grant of refund along with interest under Section 244A.

Important Clarification

  • The Court emphasized that once an appellate order is passed, the revenue authorities are bound to give effect to it within a reasonable time.
  • The direction to consider refund with interest highlights that consequential relief cannot be withheld after appellate adjudication.
  • The judgment reinforces the availability of writ jurisdiction under Articles 226/227 in cases of administrative inaction by tax authorities.

Sections Involved

  • Section 153, Income Tax Act, 1961
  • Section 244A, Income Tax Act, 1961
  • Section 250, Income Tax Act, 1961

Link to download the order -https://delhihighcourt.nic.in/app/showFileJudgment/RAS23122022CW176212022_192824.pdf

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