SIGMA ELECTRIC MANUFACTURING CORPORATION PVT LTD. vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 8, PUNE AND ORS

PDF · subscribers
WP/17926/2024HC BombayHCBM01059462202401 April 2025Bench: HON'BLE SHRI JUSTICE M.S. SONAK,HON'BLE SHRI JUSTICE JITENDRA SHANTILAL JAIN3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that since the refunds have now been made, the issue of interest is best adjudicated by the Third Respondent (presumably an Income Tax authority) in terms of Section 244A(2) of the Income Tax Act, 1961. The Third Respondent is to decide whether any delay in disbursing the refund was attributable to the petitioner. The petitioner was granted liberty to represent their case to the Third Respondent within three weeks of the order's uploading, providing all necessary details. The Third Respondent must then hear the petitioner and decide the matter in accordance with the law within four weeks, communicating a reasoned decision. The court kept all contentions of both parties open and granted liberty to challenge the Third Respondent's decision if aggrieved. The petition was disposed of in these terms.

What were the facts?

The petitioner, Sigma Electric Manufacturing Corporation Pvt Ltd, filed a writ petition before the Bombay High Court concerning refunds and interest on those refunds. Refunds had been granted to the petitioner. However, a dispute arose regarding the payment of interest on these refunds. The petitioner claimed an amount of Rs. 8,23,431/- as interest for four assessment years. The revenue contended that the refunds granted included interest up to the date of the respective orders and that subsequent delays in disbursing the refund were attributable to the petitioner. The petitioner disputed this, stating that necessary bank details were provided and there was no delay on their part. They also indicated no objection to adjusting the interest/refund component against dues of an amalgamated company for assessment year 2017-18.

What were the issues?

1. Whether the petitioner is entitled to interest on the refunds granted, and if so, to what extent, under Section 244A of the Income Tax Act, 1961? Assessee's contentions: The petitioner argued that they are due and payable interest amounting to Rs. 8,23,431/- for the four assessment years in question. They disputed the revenue's claim that delays in refund disbursal were attributable to them, stating that necessary bank details were provided. They also offered to have the interest/refund adjusted against dues of an amalgamated company for AY 2017-18. Revenue's contentions: The revenue contended that the refunds granted to the petitioner included interest payable up to the date of the respective orders. They further submitted that subsequent delays in making the refund were for reasons attributable to the petitioner.

Which sections of the Income-tax Act were involved?

244A(2)

AI-generated summary — verify with the full judgment below

8-WP-17926-2024.DOCX Amol IN THE HIGH COURT OF JUDICATURE AT BOMBAY CIVIL APPELLATE JURISDICTION WRIT PETITION NO. 17926 OF 2024 Sigma Electric Manufacturing Corporation Pvt Ltd …Petitioner Versus Deputy Commissioner of Income Tax Circle 8, Pune & Ors …Respondents ______________________________________________________ Mr Aarti Sathe, i/b, Ms Aasavari Kadam, for the Petitioner. Mr Vikas T Khanchandani, for the Respondents-Revenue. ______________________________________________________ CORAM M.S. Sonak & Jitendra Jain, JJ. DATED: 01 April 2025 PC:- 1. Heard learned Counsel for the parties. 2. This Petition concerns the issue of refunds and payments of interest on the refunds. 3. The refunds have been granted to the Petitioner as was accorded by us and confirmed by Ms Sathe the learned Counsel for the Petitioner. The interest issue was however pending. 4. Ms Sathe has handed in a chart, based on which she submits that the Respondents are due and payable interest amounting to Rs.8,23,431/- for the four assessment years in question. However, Mr Khanchandani, learned Counsel for the Respondents disputes this position. He states that the refunds granted to the Petitioner includes the interest payable upto Page 1 of 3 AMOL PREMNATH JADHAV Digitally signed by AMOL PREMNATH JADHAV Date: 2025.04.03 10:42:28 +0530

8-WP-17926-2024.DOCX the date of the respective orders. He submits that post such dates, for reasons attributable to the Petitioner the refund could not made. 5. Ms Sathe, disputes this position. She states that necessary bank details were supplied to the extent possible and there was no delay on the part of the Petitioner. She point out that the Petitioner had also stated that they would have no objection if the interest/refund component is adjusted against the dues of the amalgamated company for the assessment year 2017-18. 6. Now that the refunds have been made, we think that the interest issue is best adjudicated by the Third Respondent in terms of Section 244A(2) of the Income Tax Act. The Third Respondent, after hearing the Petitioner, would then be in a position to decide whether any delay was attributable to the Petitioner. 7. Accordingly, the Petitioner is granted the liberty to represent the Third Respondent within three weeks of the uploading of this order presenting their version along with all details. Upon receipt of such representation, the Third Respondent must, after hearing the Petitioner/representative decide the same in accordance with law within four weeks. A reasoned decision must be communicated to the Petitioner. 8. If the Petitioner is aggrieved by such decision, the Petitioner shall have the liberty to challenge the same in accordance with law. All contentions of all parties in this regard are kept open. Page 2 of 3

8-WP-17926-2024.DOCX 9. This Petition is disposed of in the above terms without any costs order. 10. All concerned to act on an authenticated copy of this order. (Jitendra Jain, J) (M.S. Sonak, J) Page 3 of 3

Recent GST High Court judgments

Search GST case law →