MOL CORPORATION vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS.

PDF · subscribers
W.P.(C)/14218/2022HC DelhiDLHC01037628202207 October 2022Author: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court, considering the limited prayer in the writ petitions, disposed of the petitions along with the applications. The Court directed the respondents to pass the necessary appeal effect orders and release the refund amounts, along with applicable interest, to the petitioner's bank account within a period of eight weeks from the date of the order. The Court did not delve into the merits of the underlying tax disputes but focused on ensuring compliance with the statutory timelines for passing appeal effect orders and releasing refunds. The principle established is that statutory mandates for timely appeal effect orders and refunds must be adhered to, and the High Court can direct compliance through writ jurisdiction when there is a failure to do so. The matters were listed for compliance on December 13, 2022.

What were the facts?

The petitioner, MOL Corporation (successor of Gracemac Corporation, USA), filed two writ petitions before the Delhi High Court. The petitions sought directions for the respondents (Assistant Commissioner of Income Tax & Ors.) to pass appeal effect orders giving effect to an Income Tax Appellate Tribunal (ITAT) order dated November 16, 2020. This ITAT order had been subsequently affirmed by the Delhi High Court. The petitioner also sought the release of refund amounts along with interest. The petitioner contended that Section 153(5) of the Income Tax Act, 1961, mandates passing of appeal effect orders within three months of receiving the ITAT order. They further argued that Section 240 mandates refund without a specific claim. The petitioner stated that despite follow-ups, refunds totaling Rs. 2,15,49,73,953/- for assessment year 2006-07 and Rs. 72,55,47,289/- for assessment year 2007-08, along with interest under Section 244A, were being retained without valid reasons.

What were the issues?

1. Whether the respondents have failed to comply with the statutory mandate under Section 153(5) of the Income Tax Act, 1961, to pass appeal effect orders within the prescribed time frame after receiving the ITAT order dated November 16, 2020, which was affirmed by the High Court. 2. Whether the respondents have failed to comply with the statutory mandate under Section 240 of the Income Tax Act, 1961, to refund the amounts due to the petitioner without requiring a specific claim, and whether the retention of refunds totaling Rs. 2,15,49,73,953/- for AY 2006-07 and Rs. 72,55,47,289/- for AY 2007-08, along with interest under Section 244A, is justified. Assessee's Contentions: - Section 153(5) of the Act mandates appeal effect orders within three months of receiving the ITAT order. - Section 240 of the Act mandates refund without a specific claim. - The respondents have retained significant refund amounts with interest for AY 2006-07 and 2007-08 without cogent reasons, causing grave injustice. - Reliance was placed on the Taxpayer's Charter (August 13, 2020) and High Court judgments in Nokia Corporation vs. DCIT & Ors: W.P.(C) 14070/2020; Nokia India Pvt. Ltd. vs. ACIT & Ors.: W.P.(C) 15030/2021; Qualcomm Technologies, Inc vs. DCIT & Ors.: W.P.(C) 2146 & 21583/2022. Revenue's Contentions: - The judgment records that Mr. Sanjay Kumar, learned Senior Standing Counsel, accepted notice.

Which sections of the Income-tax Act were involved?

Section 153(5),Section 240,Section 244A,Section 254

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

W.P.(C) 14218/2022
W.P.(C) 14239/2022

Read from the judgment's own cause title. This page is filed under one of them.

$~S-13 & 18 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 14218/2022 & CM APPL.43434/2022 MOL CORPORATION ..... Petitioner Mr.Nageswar Rao, Advocate with Mr.Akshay Uppal, Advocate. versus ASSISTANT COMMISSIONER OF INCOME TAX & ORS. ..... Respondents Mr.Sanjay Kumar, Sr.Standing Counsel and Ms.Easha Kadian, Advocate. + W.P.(C) 14239/2022 & CM APPL.43497/2022 MOL CORPORATION (SUCCESSOR OF GRACEMAC CORPORATION, USA) ..... Petitioner Mr.Nageswar Rao, Advocate with with Mr.Akshay Uppal, Advocate. versus ASSISTANT COMMISSIONER OF INCOME TAX & ORS. ..... Respondents Mr.Sanjay Kumar, Sr.Standing Counsel and Ms.Easha Kadian, Advocate. Mr.Sushil Kumar Pandey, Advocate with Mr.Kuldeep Singh, Advocate for R-5. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA

O R D E R % 07.10.2022 Present writ petitions have been filed seeking directions to the Respondents to pass appeal effect orders giving effect to the order dated 16th November, 2020 passed by the Income Tax Appellate Tribunal (‘ITAT’) in ITA No.5233/Del/2010, ITA No.945/Del/2012 and ITA No.947/Del/2012 (subsequently affirmed by this Court in ITA No.34/2022, ITA No.47/2022 and ITA No.48/2022 respectively). Petitioner also seeks release of refund amount along with interest in the Petitioner’s bank account. Learned counsel for the Petitioner states that Section 153(5) of the Income Tax Act, 1961 (‘the Act’) clearly provides that an order giving effect to an order passed by ITAT under Section 254 of the Act is to be passed by the Assessing Officer within a period of three months from the end of the month in which such order is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be. He further states that Section 240 of the Act mandates refund of amount resulting from an order passed in appeal without any claim from taxpayer. He states that despite multiple follow-ups through various submissions, emails and meetings, Respondents has continued to retain the refund of Rs.2,15,49,73,953/- and Rs.72,55,47,289/- (to be increased by interest under Section 244A of the Act up to the date of actual credit of refund) legally due to the Petitioner in relation to assessment year 2006-07 and 2007-08 respectively without assigning any cogent reason whatsoever, resulting in grave injustice to the Petitioner.

In support of his submission, he relies on the Taxpayer’s Charter announced on 13th August, 2020 and judgments of this Court in Nokia Corporation vs. DCIT & Ors: W.P.(C) 14070/2020; Nokia India Pvt. Ltd. vs. ACIT & Ors.: W.P.(C) 15030/2021; Qualcomm Technologies, Inc vs. DCIT & Ors.: W.P.(C) 2146 & 21583/2022. Issue notice. Mr.Sanjay Kumar, learned Senior Standing Counsel for the respondents, accepts notice. Keeping in view the limited prayer sought in the present writ petitions, the same along with applications are disposed of with a direction to the respondents to pass appeal effect orders as well as release the refund along with interest in the petitioner’s bank account within eight weeks. List the matters for compliance on 13th December, 2022. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J OCTOBER 7, 2022 TS

More judgments on Section 153(5)

All 52 judgments and leading authorities on Section 153(5) →

Recent GST High Court judgments

Search GST case law →