Facts of the Case

  • The petitioner filed a writ petition seeking direction to the Income Tax Department to pass an appeal effect order pursuant to the order of the Income Tax Appellate Tribunal (ITAT) for Assessment Year 2013–14.
  • The ITAT, vide order dated 29 November 2019, deleted:
    • Transfer pricing addition on corporate charges amounting to ₹13.54 crore
    • Disallowance of depreciation on goodwill amounting to ₹158.73 crore
  • As a result, the petitioner became entitled to a refund of ₹23.18 crore (including interest).
  • The Revenue did not file any appeal under Section 260A against the ITAT order.
  • Despite this, no refund was granted to the petitioner.

Issues Involved

  1. Whether the Revenue is obligated to grant refund once the ITAT order attains finality.
  2. Whether failure to issue refund violates Sections 240 and 244A of the Income Tax Act.
  3. Whether the Assessing Officer can delay passing appeal effect order despite no further appeal being filed.

Petitioner’s Arguments

  • The ITAT order had attained finality as no appeal was filed under Section 260A.
  • The petitioner is legally entitled to refund along with interest under Sections 240 and 244A.
  • The inaction of the Revenue is arbitrary and contrary to statutory provisions.

Respondent’s Arguments

  • The Revenue accepted notice but stated that it had no instructions in the matter.

Court’s Findings / Order

  • The Court held that since no appeal was filed under Section 260A, the ITAT order had attained finality.
  • Non-grant of refund by the Revenue is in violation of Sections 240 and 244A of the Act.
  • The Court directed the Assessing Officer to:
    • Pass the appeal effect order within 12 weeks
    • Grant consequential refund along with applicable interest in accordance with law

Important Clarification

  • Once an ITAT order is not challenged under Section 260A, it attains finality and must be implemented without delay.
  • The Revenue cannot withhold refund in absence of any pending appeal.
  • Statutory interest under Section 244A is mandatory along with refund.

Link to download the order -https://delhihighcourt.nic.in/app/case_number_pdf/2022:DHC:4057-DB/MMH28092022CW139942022_183241.pdf

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