ALSTOM RAIL TRANSPORTATION INDIA PRIVATE LIMITED vs. DEPUTY COMMISSIONER OF INCOME-TAX (TDS)

SCA/12646/2019HC GujaratGJHC24030708201923 January 2023Author: HONOURABLE THE CHIEF JUSTICE MS. JUSTICE SONIA GOKANI,HONOURABLE MR. JUSTICE SANDEEP N. BHATT12 pages
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What were the facts?

The petitioner, M/s. Bombardier Transportation India Pvt Ltd, is challenging the respondent's action of withholding a refund along with interest and additional interest under Section 244A of the Income Tax Act. The dispute stems from accounting entries made in FY 2004-05 (AY 2005-06) for provision of expenses to foreign entities. Tax was deducted and deposited in October 2005 upon receiving invoices. The respondent treated this as a default under Section 201(1) and passed orders for TDS, interest, and penalty. Appeals followed, with the ITAT deleting the penalty. The revenue's appeal against this deletion was dismissed by the High Court in August 2016. Despite this, the refund of Rs. 90,46,000/- paid by the petitioner remained unissued, leading to multiple complaints and the present petition.

What did the High Court hold?

The High Court held that the petitioner is entitled to the refund along with statutory interest under Section 244A. The Court noted that the revenue's appeal was dismissed in August 2016, making the refund due thereafter. The respondent's reasons for delay, such as separate IT portals and manual deposits, were not considered sufficient to justify the five-year delay post the High Court's decision. The Court referred to its decision in Nima Specific Family Trust v/s Assistant Commissioner of Income-tax, holding that while interest on delayed refunds is mandated, interest on interest is not permissible. However, considering the exceptional delay and the respondent's lack of clarity on outstanding demands, the Court directed the respondent to complete the refund process within three months. If not completed within this period, the respondent was ordered to pay Rs. 1 lac to the petitioner as compensation. The petitioner was also directed to submit necessary documents regarding name change within one week.

What were the issues?

1. Whether the respondent is liable to grant the refund due to the petitioner, along with interest and additional interest under Section 244A of the Income Tax Act, considering the High Court's dismissal of the revenue's appeal in August 2016? Assessee's Contention: The petitioner argues that the refund became due after the High Court's order in August 2016, and the respondent's failure to issue it, despite multiple communications and complaints, warrants judicial intervention. They seek directions for the refund and consequential interest and additional compensation for the delay. Revenue's Contention: The respondent attributes the delay to technical issues with separate IT portals (ITBA and TRACES) and the complexity of reconciling manual deposits made prior to the online regime. They also mention outstanding demands against the assessee for various assessment years, making automatic adjustment difficult and time-consuming. They claim that the refund processing is not possible on the portal and requires inter-departmental coordination.

Which sections of the Income-tax Act were involved?

Section 244A,Section 40(a),Section 195,Section 201(1)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
C/SCA/12646/2019 ORDER DATED: 23/01/2023 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 12646 of 2019 ========================================================== M/S. BOMBARDIER TRANSPORTATION INDIA PVT LTD Versus DEPUTY COMMISSIONER OF INCOME-TAX (TDS) ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1 MS POOJA ASHAR, AGP for the Respondent(s) No. 1 MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE SANDEEP N. BHATT Date : 23/01/2023

ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI)

1.

Draft amendment is permitted to be carried out forthwith, on hearing learned counsels for both the sides.

2.

The petitioner is before this Court seeking to challenge the action of the respondent for non-grant of the refund which has been withheld with interest and additional interest under Section 244A of the Income Tax Act.

3.

Certain accounting entries were passed by the Page 1

The order continues below.

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