KRBL LIMITED vs. DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1), DELHI & ORS.

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W.P.(C)/15068/2022HC DelhiDLHC01040515202201 November 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA3 pages
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What did the High Court hold?

The Delhi High Court disposed of the writ petition with a direction to the Respondents-Revenue to consider issuing the refund of Rs. 15,03,89,270/- along with up-to-date interest, which was admittedly due pursuant to the appeal effect order dated April 5, 2021. The Court also directed the Respondents to pass an appeal effect order pursuant to the ITAT order dated May 9, 2022, and to issue an additional refund of Rs. 17,96,10,730/- along with up-to-date interest. The Court noted that the Revenue had sufficient time to file an appeal and that, in accordance with law, an appeal effect order should be passed within three months of the appeal order. The necessary appeal effect order and payments of refunds were to be made within six weeks. The rights and contentions of all parties were left open. The issue regarding the release of Rs. 60,00,000/- seized at the time of search was implicitly covered by the direction to pass the appeal effect order and make payments, although not explicitly detailed in the operative part.

What were the facts?

The petitioner, KRBL Limited, filed a writ petition before the Delhi High Court seeking a direction to the Income Tax Department to issue refunds amounting to Rs. 15,03,89,270/- along with interest, as per an appeal effect order dated April 5, 2021, arising from a CIT(A) order. Additionally, the petitioner sought the issuance of a further refund of Rs. 17,96,10,730/- with interest, and the release of Rs. 60,00,000/- seized during a search, all pursuant to an Income Tax Appellate Tribunal (ITAT) order dated May 9, 2022. The petitioner stated that the ITAT had decided all issues in its favour, leading to the deletion of all additions. Despite representations made on May 20, 2022, and July 11, 2022, no appeal effect order or refunds were issued. The Revenue indicated it was in the process of filing an appeal against the ITAT order.

What were the issues?

1. Whether the Respondents-Revenue should be directed to issue the refund of Rs. 15,03,89,270/- along with up-to-date interest, admittedly due to the Petitioner pursuant to the appeal effect order dated April 5, 2021, arising from the CIT(A) order. (Question of law and fact, concerning refund entitlement and procedural delay). 2. Whether the Respondents-Revenue should be directed to pass an appeal effect order pursuant to the ITAT order dated May 9, 2022, and issue an additional refund of Rs. 17,96,10,730/- along with up-to-date interest. (Question of law and fact, concerning compliance with ITAT order and refund issuance). 3. Whether the Respondents-Revenue should be directed to release the refund of Rs. 60,00,000/- seized at the time of search along with up-to-date interest, due to the Petitioner pursuant to the ITAT order dated May 9, 2022. (Question of law and fact, concerning release of seized amounts). Assessee's Contentions: The ITAT decided all issues in favour of the Petitioner, leading to the deletion of all additions. The Petitioner is entitled to a refund of remaining taxes paid under protest amounting to Rs. 33,00,00,000/- along with applicable interest under Sections 244A/244A(1A) of the Act. Non-issuance of refund violates Article 265 of the Constitution of India and Sections 237 and 240 of the Act. The Petitioner relied on the ITAT order dated May 9, 2022. Revenue's Contentions: The Revenue stated it was in the process of filing an appeal against the order of the ITAT.

Which sections of the Income-tax Act were involved?

Section 244A,Section 244A(1A),Section 237,Section 240

AI-generated summary — verify with the full judgment below

Neutral Citation Number: 2022/DHC/004600 W.P.(C) 15068/2022 Page 1 of 3 $~96 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 15068/2022 KRBL LIMITED ..... Petitioner Through : Ms. Ananya Kapoor with Mr.Sumit Lalchandani, Advocates. versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 13(1), DELHI AND ORS ..... Respondents Through : Mr. Ajit Sharma, Senior Standing Counsel for Revenue along with Mr.A.Renganath, Advocate. % Date of Decision: 01st November, 2022 CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (ORAL): CM APPL. 46553/2022 (for exemption) Exemption allowed, subject to all just exceptions. Accordingly, the application stands disposed of. W.P.(C) 15068/2022 1. Present writ petition has been filed seeking a direction to the Respondents to issue the refund of Rs.15,03,89,270/- along with up-to-date interest being admittedly due to the Petitioner pursuant to appeal effect order dated 05th April, 2021 arising out of order of CIT(A), pass the appeal effect Digitally Signed By:JASWANT SINGH RAWAT Signing Date:02.11.2022 18:31:18 Signature Not Verified

Neutral Citation Number: 2022/DHC/004600 W.P.(C) 15068/2022 Page 2 of 3 order pursuant to ITAT order dated 09th May, 2022 as well as issue additional refund of Rs.17,96,10,730/- along with up-to-date interest and to release the refund of Rs.60,00,000/- seized at the time of search along with up-to-date interest due to the Petitioner pursuant to the ITAT order dated 09th May, 2022. 2. Learned counsel for the Petitioner states that the ITAT vide order dated 09th May, 2022, decided all issues in favour of the Petitioner and the entire additions were deleted. She states that the Petitioner is now entitled to a refund of remaining taxes paid under protest amounting to Rs.33,00,00,000/- along with applicable interest under Sections 244A/244A(1A) of the Income Tax Act, 1961 (‘the Act’). 3. Learned counsel for the Petitioner states that the Petitioner has filed letters dated 20th May, 2022 and 11th July, 2022 with the Respondents for passing of an appeal effect order pursuant to the ITAT order and also for release of refunds legally due to the Petitioner, but to no avail. She submits that non-issuance of refund is in violation of Article 265 of the Constitution of India and also against Sections 237 and 240 of the Act. 4. Issue notice. Mr.Ajit Sharma, learned senior standing counsel accepts notice on behalf of the Respondents-Revenue. He states that the Revenue is in the process of filing an appeal against the order of the ITAT. 5. Having heard learned counsel for the parties, this Court is of the view that the Respondents-Revenue has had sufficient time to file an appeal against the order of the ITAT. In any event, in accordance with the mandate of law, the appeal effect order has to be passed within three months of passing the appeal order. Digitally Signed By:JASWANT SINGH RAWAT Signing Date:02.11.2022 18:31:18 Signature Not Verified

Neutral Citation Number: 2022/DHC/004600 W.P.(C) 15068/2022 Page 3 of 3 6. Keeping in view the limited prayer sought in the present writ petition, the same is disposed of along with the pending application with a direction to the Respondents-Revenue to consider:- (i) Issue of refund of Rs.15,03,89,270/- along with up-to-date interest being admittedly due to the Petitioner pursuant to appeal effect order dated 05th April, 2021 arising out of order of CIT(A); (ii) Passing an appeal effect order pursuant to ITAT order dated 09th May, 2022; and (iii) Issue additional refund of Rs.17,96,10,730/- along with up-to-date interest. 7. The necessary appeal effect order and payments of refunds shall be made within a period of six weeks. The rights and contentions of all the parties are left open. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J NOVEMBER 01, 2022 KA Digitally Signed By:JASWANT SINGH RAWAT Signing Date:02.11.2022 18:31:18 Signature Not Verified

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