BRINDA ARENJA vs. DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -18 & ANR.

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W.P.(C)/1106/2025HC DelhiDLHC01003445202521 March 2025Author: HON'BLE MR. JUSTICE VIBHU BAKHRU,HON'BLE MR. JUSTICE TEJAS KARIA3 pages
AI SummaryPartly Allowed

What did the High Court hold?

The Delhi High Court held that the disbursement of a refund due to the petitioner cannot be inordinately delayed due to the Revenue facing technical challenges with its systems or processes. The Court noted that the delay would also increase the quantum of refund due to additional interest. Consequently, the Court directed the respondents to process the refund along with further applicable interest as expeditiously as possible, within a period of twelve weeks from the date of the order. The Court further stipulated that if the respondents faced any technical challenges, the refund should be disbursed by processing it manually, emphasizing that the Revenue's technical issues would not be a ground for non-disbursal of the refund. The writ petition was disposed of in these terms.

What were the facts?

The petitioner, Brinda Arenja, filed a writ petition before the Delhi High Court seeking a mandamus to direct the Deputy Commissioner of Income Tax to issue a refund of ₹11,09,568/- for Assessment Year 1997-98, along with applicable interest. The petitioner's return was filed on 27.06.1997. An addition of ₹46,34,410/- was made under Section 69. The CIT(A) set aside the assessment and remanded it. A subsequent assessment also made the same addition, leading to a deposit of ₹5,15,082/- by the petitioner. The CIT(A) partly allowed the appeal. The Revenue's appeal to the ITAT was dismissed, as was its subsequent appeal to the Allahabad High Court. An order giving effect to the ITAT's decision was passed on 01.03.2023, computing a refund of ₹11,09,568/-, including tax and interest, but the refund had not been released.

What were the issues?

1. Whether the Revenue can delay the disbursement of a determined refund due to technical challenges in its systems. (Question of law and fact) The Assessee's contention is that the refund, determined on 01.03.2023, has not been released despite the ITAT and High Court upholding the assessee's position. The delay is causing prejudice and potentially increasing the refund amount due to further interest accrual. The Revenue's contention, as stated by its counsel, is that the delay in refund disbursement is due to the challans not being digitally uploaded and ongoing internal searches for records and communication to capture challan details on the framework. This is attributed to migration to a new technical system adopted by the Revenue.

Which sections of the Income-tax Act were involved?

Section 69,Section 240,Section 244A,Section 143(3),Section 254,Section 250

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
$~7 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 1106/2025 and CM APPL. 5467/2025 BRINDA ARENJA .....Petitioner Through: Mr Satyen Sethi, Advocate. versus DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE -18 & ANR. .....Respondents Through: Mr Vipul Agrawal with Ms Sakshi and Mr Akshat, Singh, Advocates. CORAM: HON'BLE MR. JUSTICE VIBHU BAKHRU HON'BLE MR. JUSTICE TEJAS KARIA

O R D E R % 21.03.2025

1.

The petitioner has filed the present petition, inter alia, praying as under: “(i) A Writ of Mandamus or Writ, Order or Direction in the nature of Mandamus or any other appropriate Writ, Order or Direction under Article 226 / 227 of the Constitution of India, directing Respondents particularly Respondent No.l to issue refund of Rs. 11,09,568/-, for the assessment year 1997-98 with up-to date interest under section 240 read with Section 244A of the Act.”

2.

The petitioner had filed its return of income for the Assessment Year [AY] 1997-98 on 27.06.1997. The learned Assessing Officer [AO] during the assessment under Section 143(3) of the Income Tax Act, 1961 [the Act] making an addition of ₹46,34,410/- under Section 69 of the Act on account of difference in the value of the cost of acquisition of an immovable property and its fair market value.

3.

The petitioner had successfully appealed the said decision before the This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 21:34:37

Commissioner of Income Tax (Appeals) [CIT(A)] and by an order dated 04.09.2000, the learned CIT(A) had set aside the assessment order dated 31.03.2000 and remanded the matter to the AO to decide afresh. Pursuant to the said order, the AO had once again framed an assessment making an addition of ₹46,34,410/-. In view of the above, the petitioner had made a deposit of ₹5,15,082/- during the period 03.07.2002 to 17.02.2004. The petitioner also appealed the assessment order before the learned CIT(A) which was partly allowed by an order dated 27.02.2003. The Revenue appealed the said decision of the learned CIT(A) before the learned Income Tax Appellate Tribunal [ITAT] which was dismissed by an order dated 27.10.2005. 4. The Revenue filed the appeal against the said order passed by the learned ITAT before the Allahabad High Court which too was dismissed by an order dated 06.01.2017. Thereafter, the petitioner requested the AO to give effect to the order passed by the learned ITAT. On 01.03.2023, an order under Sections 254/250/143(3) of the Act was passed computing the total income at ₹2,42,920/- and a refund due to the petitioner at ₹11,09,568/-. The said amount of refund included tax of ₹5,14,083/- and interest under Section 244A of the Act, which was computed at ₹5,95,485/-.

5.

The petitioner also furnished an indemnity bond on 09.08.2023 as required by the AO confirming that it had neither claimed credit of tax of ₹70,169/- nor had received any refund.

6.

Although the refund due to the petitioner was determined way back on 01.03.2023, the same has not been released to the petitioner yet.

7.

The learned counsel appearing for the Revenue submits on instructions that the Revenue has not been able to process the disbursement This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 21:34:37

of the refund as the challans have not been digitally uploaded. He submits that the Revenue has been searching the records and has sent various communications internally for the details of the challans to be captured on the framework in order for the refund to be disbursed. He submits that the said exercise would be completed shortly and the delay in disbursement is solely on account of migration to technical system as adopted by the Revenue.

8.

Undisputedly, the disbursement of the refund due to the petitioner cannot be delayed inordinately on account of the Revenue facing any technical challenges relating to its system or processes. We also note that in view of the delay in disbursement of the refund, the quantum of refund would also change on account of increase in the quantum of interest.

9.

In view of the above, we direct the respondents to process the refund due to the petitioner alongwith further interest as applicable, as expeditiously as possible, and in any event, within a period of twelve weeks from date. In the event, the respondents face any technical challenges, the refund shall be disbursed by processing the same manually. We clarify that the challenge faced by the Revenue regarding its processes or its systems would not be the ground for non-disbursal of the said refund.

10.

The writ petition is disposed of in the aforesaid terms. Pending application also stands disposed of. VIBHU BAKHRU, J TEJAS KARIA, J MARCH 21, 2025/tr Click here to check corrigendum, if any This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 01/07/2025 at 21:34:37

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