DILIPKUMAR MULCHAND PURUSWANI vs. INCOME TAX OFFICER, WARD 14(3), PUNE

The learned counsel for the parties states The learned counsel for the parties states that the issues raised in both petitions are that the issues raised in both petitions are similar, and therefore, they may be considered similar, and therefore, they may be considered together. together.

In both these petitions, the ITAT, vide its In both these petitions, the ITAT, vide its order dated 31 July 2006, has set aside the order dated 31 July 2006, has set aside the impugned assessment orders and restored the impugned assessment orders and restored the matter to the AO for a matter to the AO for a de-novo de-novo decision as per decision as per the observations made in the ITAT orders. The the observations made in the ITAT orders. The AO was also directed to provide an adequate AO was also directed to provide an adequate hearing opportunity to the assesses. hearing opportunity to the assesses.

The record shows, and it is not even The record shows, and it is not even disputed, that the ITAT order dated 31 July disputed, that the ITAT order dated 31 July 2006 was communicated to the department 2006 was communicated to the department concerned. The complaint in these petitions is concerned. The complaint in these petitions is that though almost 16 years have elapsed, the that though almost 16 years have elapsed, the concerned AO has not made any assessment concerned AO has not made any assessment orders according to the remand by the ITAT. orders according to the remand by the ITAT. The learned counsel for the Petitioner submits The learned counsel for the Petitioner submits that the Petitioners have been deprived of their that the Petitioners have been deprived of their refund for almost 17 years, and such retentions refund for almost 17 years, and such retentions of the amount by the department is arbitrary of the amount by the department is arbitrary and violates constitutional provisions. and violates constitutional provisions.

The Respondents have filed affidavits The Respondents have filed affidavits before us. Apart from trying to blame the before us. Apart from trying to blame the Petitioner for not pursuing the matter Petitioner for not pursuing the matter diligently, there is an acknowledgment that diligently, there is an acknowledgment that case papers are not traceable since more than case papers are not traceable since more than 10 years have elapsed. 10 years have elapsed.

In paragraphs 9 and 10 of the In paragraphs 9 and 10 of the affidavit filed by Mary Robin Abraham, affidavit filed by Mary Robin Abraham, stated as follows: - stated as follows: - “9. The department has undergone “9. The department has undergone restructuring in 2001 as well as 2014 restructuring in 2001 as well as 2014 wherein there was major upheaval of wherein there was major upheaval of jurisdiction of Assessing Officers as well jurisdiction of Assessing Officers as well as CIT charges. The present jurisdiction as CIT charges. The present jurisdiction of the Respondent 1 is assigned only of the Respondent 1 is assigned only from November, 2014. Prior to this from November, 2014. Prior to this period, the charge of Respondent 1 had period, the charge of Respondent 1 had jurisdiction over salary assesses. The jurisdiction over salary assesses. The Petitioner assessee had never raised this Petitioner assessee had never raised this issue before any forum or before the issue before any forum or before the Department till the year 2022 as Department till the year 2022 as Petitioner has not produced any Petitioner has not produced any document to prove any correspondence document to prove any correspondence made on the issue prior to the year 2022. made on the issue prior to the year 2022. It is beyond comprehension as to why an It is beyond comprehension as to why an assessee who has been regularly filing his assessee who has been regularly filing his return of income with tax payment and return of income with tax payment and claiming of refund, wherever due, forgot claiming of refund, wherever due, forgot his claim of refund for 16 long years. his claim of refund for 16 long years.

It is in public domain that the It is in public domain that the processing of return and keeping of processing of return and keeping of record in the Respondent Income Tax record in the Respondent Income Tax department has undergone several department has undergone several changes. It has moved from manual changes. It has moved from manual record to computer record. A Software record to computer record. A Software called ITD was initially introduced which called ITD was initially introduced which was subsequently migrated when ITBA was subsequently migrated when ITBA was adopted. Further, the PAN of was adopted. Further, the PAN of assessee has been with different assessee has been with different Jurisdictional AOs from 2002 to 2022, Jurisdictional AOs from 2002 to 2022, the details of which are annexed the details of which are annexed herewith and marked as EXHIBIT 'A'.” herewith and marked as EXHIBIT 'A'.”

In our opinion, the above averments are In our opinion, the above averments are quite vague. No details are provided about the quite vague. No details are provided about the officials responsible for the maintenance of officials responsible for the maintenance of records and if any action has taken place records and if any action has taken place against such officials for failure to retain such against such officials for failure to retain such records. The affidavit also does not explain why records. The affidavit also does not explain why no orders for giving effect to the ITAT’s remand no orders for giving effect to the ITAT’s remand orders were made within the prescribed period orders were made within the prescribed period of limitation and what action is taken against of limitation and what action is taken against the officials responsible for not making such the officials responsible for not making such orders. From the records, we find that these orders. From the records, we find that these were such search cases. Accordingly, the were such search cases. Accordingly, the departmental officials were expected to be departmental officials were expected to be diligent, and the matter was required to be diligent, and the matter was required to be diligently pursued. The ITAT remand order diligently pursued. The ITAT remand order needed to be complied with within a needed to be complied with within a reasonable period and, in any event, within the reasonable period and, in any event, within the limitation period prescribed by the law. If this is limitation period prescribed by the law. If this is not done, then the officials responsible for not not done, then the officials responsible for not doing this will have to be held accountable. doing this will have to be held accountable. Based on some vague statements about Based on some vague statements about restructuring or major upheaval, no attempt restructuring or major upheaval, no attempt can be made to avoid fixing responsibility. can be made to avoid fixing responsibility.

Accordingly, we direct the Principal Accordingly, we direct the Principal Commissioner of Income Tax, Pune, to Commissioner of Income Tax, Pune, to investigate these matters and file affidavits investigate these matters and file affidavits explaining the status of the investigation. The explaining the status of the investigation. The affidavits must be filed and served by 6 affidavits must be filed and served by 6 February 2025. February 2025. 9. 9. The learned counsel for the Respondents The learned counsel for the Respondents agrees to communicate and authenticate the agrees to communicate and authenticate the copy of this order to the Principal copy of this order to the Principal Commissioner of Income Tax, Pune. Commissioner of Income Tax, Pune.

List the petitions on 10 February 2025 List the petitions on 10 February 2025.”

Pursuant to the above order, the Principal Commissioner of Income Tax-3 Pune has filed an affidavit, which admitted that there is no certainty about whether any order giving effect to ITAT’s order has been made. No such order has been produced. It is conceded that the time limit for making such orders has now expired. In such a state of affairs, the revenue cannot avoid or delay the refunds due to the petitioner.

The affidavit of the Principal Commissioner makes for sorry reading. The Tribunal’s order in this case was made on 31 July 2006, and it is claimed that it was received by the then-jurisdictional CIT- 2, Pune, only on 13 March 2007. After that, it is claimed that the records are not traceable. The affidavit, while acknowledging the lapses, purports not to assign responsibility to any of the officials. This has become a routine. Lapses, which are otherwise evident are accepted because they are undeniable. But there is greatest reluctance to fix responsibility. The monetary burden due to the inaction or negligence is then passed on to the public exchequer.

Learned counsel for the Petitioners now submits that due to not passing the order giving effect within the prescribed period of limitation, the Petitioners would be entitled to the above refund returns. On instructions, he states that if the refunds are given by 30th April 2025, the Petitioners will not claim any interest on the refunds.

Accordingly, based on the statements in the affidavit filed by the Principal Commissioner of Income Tax, we direct the Respondents to pass appropriate orders on the issue of refunds by 15 April 2025. If any refunds are found due, they must be made to the Petitioners on or before 30 April 2025. 10. If there is a delay, the refund amounts will carry interest at 6% p.a. and must be paid to the petitioners. After such payment, the interest component must be recovered from the Officers responsible for the delay. There is no point in burdening the State Exchequer and, consequently, the taxpayer for inaction, whether deliberate or otherwise, on the part of the department officials.

We dispose of the petitions in the above terms by directing the Respondents to file a compliance report by 5th May 2025 with an advance copy to the learned counsel for the Petitioners. This direction is issued given the fair statement made by the learned counsel for the Petitioners that the Petitioners would not claim interest provided the amounts are refunded by 30th April 2025. In the facts of this case, it will not be proper to require the Petitioners to once again approach this Court by filing a fresh petition.

The Rule is made absolute in the above terms with no cost order. All concerned to act on the authenticated copy of this order. (Jitendra Shantilal Jain, J.) (M.S. Sonak, J.)