INTERTEK INDIA PRIVATE LIMITED vs. ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 10 1 NEW DELHI

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W.P.(C)-11517/2023HC Delhi2023:DHC:650431 August 20233 pages
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What did the High Court hold?

The Delhi High Court disposed of the writ petition with specific directions. The Court acknowledged the petitioner's grievance regarding the inordinate delay in disposing of the rectification application filed on May 25, 2016, which far exceeded the statutory six-month period stipulated under Section 154(1) and 154(8) of the Income Tax Act, 1961, and Instruction No.1 of 2016. While directing the concerned officer to dispose of the rectification application within four weeks of receiving the judgment, the Court also addressed the petitioner's delay in approaching the Court. The Court held that given the petitioner's own delay in approaching the Court for over seven years, interest on the refund, between the expiry of the six-month period and October 9, 2019 (the date of the first representation to the respondent, as noted by the Court), ought not to be paid to the petitioner. The operative direction is for the disposal of the application and consequential refund, but with a curtailment of interest.

What were the facts?

The petitioner, Intertek India Private Limited, filed a writ petition before the Delhi High Court challenging the inaction of the Assistant Commissioner of Income Tax, Circle 10, New Delhi, in disposing of its rectification application dated May 25, 2016. The petitioner sought a writ of mandamus directing the respondent to dispose of the application and grant consequential refund with interest under Section 244A of the Income Tax Act, 1961. The respondent, represented by senior standing counsel, accepted notice and waived the need for a counter-affidavit, agreeing to argue based on the available record. The Court noted the significant delay of over seven years since the filing of the rectification application.

What were the issues?

1. Whether the respondent has failed to discharge its statutory duty to dispose of the petitioner's rectification application within the prescribed timelines under Section 154(1) and 154(8) of the Income Tax Act, 1961, and Instruction No.1 of 2016? - Assessee's Contention: The assessee argued that its rectification application, filed on May 25, 2016, has not been disposed of despite the statutory timelines of six months under Section 154(1) and 154(8) of the Act and Instruction No.1 of 2016 being significantly exceeded. The delay is causing prejudice by withholding a refund. - Revenue's Contention: The revenue did not file a counter-affidavit and did not present specific arguments against the assessee's claim of delay. However, the Court itself raised concerns about the petitioner's delay in approaching the Court.

Which sections of the Income-tax Act were involved?

Section 154,Section 244A

AI-generated summary — verify with the full judgment below

W.P.(C)No.11517/2023 Page 1 of 3

$~43 * IN THE HIGH COURT OF DELHI AT NEW DELHI %

Date of decision: 31.08.2023

+ W.P.(C) 11517/2023

INTERTEK INDIA PRIVATE LIMITED

..... Petitioner Through: Mr Kamal Sawhney with Mr Nihil Agarwal and Mr Puru Medhira, Advocates.

versus

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 10 1 NEW DELHI

..... Respondent Through: Mr Abhishek Maratha, Sr. Standing Counsel with Mr Akshat Singh, Standing Counsel.

CORAM:

HON'BLE MR JUSTICE RAJIV SHAKDHER

HON'BLE MR JUSTICE GIRISH KATHPALIA [Physical Hearing/Hybrid Hearing (as per request)] RAJIV SHAKDHER, J.: (ORAL)

1.

Issue notice. 2. Mr Abhishek Maratha, learned senior standing counsel who appears on behalf of the respondents/revenue, accepts notice. 3. Given the directions that we propose to pass, Mr Maratha says that he does not wish to file a counter-affidavit in the matter, and he will argue the matter based on the record presently available with the Court. 3.1 Therefore, with the consent of the learned counsels for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself. 4. The substantial prayer made in the writ petition, in essence, articulates Digitally Signed By:ATUL JAIN Signing Date:08.09.2023 21:15:50 Signature Not Verified

W.P.(C)No.11517/2023 Page 2 of 3

the grievance of the petitioner. Therefore, for the sake of convenience, the prayer made is set forth hereafter:

“(a) Issue a Writ of mandamus, or a Writ in the nature of mandamus, or any other appropriate Writ or Order directing the Respondent to dispose of Petitioner’s Rectification Application dated 25.05.2016 within a period of four weeks and grant consequential refund along with applicable interest under Section 244A of the Act within the said four weeks.”

5.

A perusal of the prayer clause would show that the petitioner is aggrieved by the fact that its rectification application dated 25.05.2016 has not been disposed of, as yet. 6. As rightly averred by the petitioner, the timeline fixed under sections 154(a) and 154(8) of the Income Tax Act, 1961 [in short, “the Act”], is six

(6) months. The period involved goes way beyond the statutory timeline fixed for the disposal of a rectification application. This is also the position that obtains as per Instruction No.1 of 2016 dated 15.02.2016. 7. That said, we find it difficult to understand why the petitioner did not approach the Court within a reasonable period. Repeated representations to the Assessing Officer (AO) and grievances sought cannot explain, in our view, the delay and laches in approaching the Court. The period involved is more than seven (7) years. 7.1 Therefore, we dispose of the writ petition with the following directions: (i) The concerned officer will dispose of the rectification application within four (4) weeks of receipt of a copy of the judgment. Digitally Signed By:ATUL JAIN Signing Date:08.09.2023 21:15:50 Signature Not Verified

W.P.(C)No.11517/2023 Page 3 of 3

(ii) The AO will bear in mind that the first representation to the respondent was made on 09.10.2019. We are therefore, of the opinion that interest between the period after the expiry of six (6) months from when the rectification application was filed and 09.10.2019 in the facts of this case, ought not to be paid to the petitioner. 8. Parties will act based on the digitally signed copy of the order.

RAJIV SHAKDHER, J

GIRISH KATHPALIA, J

AUGUST 31, 2023 / tr Digitally Signed By:ATUL JAIN Signing Date:08.09.2023 21:15:50 Signature Not Verified

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