L.S. CABLE AND SYSTEM LTD. vs. UNION OF INDIA & ORS.

Q: Which sections of the Income-tax Act were involved?

Section 143(1), Section 143(3), Section 241A

W.P.(C)/8355/2020HC DelhiDLHC01029007202025 November 2020Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MR. JUSTICE SANJEEV NARULA2 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court of Delhi disposed of the writ petition as withdrawn. The petitioner was granted liberty to withdraw the petition to challenge the action taken under Section 241A of the Income Tax Act, 1961. The Court explicitly stated that it had not expressed any opinion on the merits of the controversy and that all rights and contentions of the parties were left open. Therefore, no specific finding was made on the legality of withholding the refund without a speaking order, as the case was disposed of on the petitioner's request to withdraw and pursue alternative remedies. The operative direction was to dispose of the writ petition and pending application with the liberty granted.

What were the facts?

The petitioner, L.S. Cable and System Ltd., filed a writ petition seeking directions for the release of an income tax refund of Rs. 1,97,27,981/- for Assessment Year 2018-2019. The petitioner stated that the Centralized Processing Center (CPC), Bangalore, had processed the refund under Section 143(1) of the Income Tax Act, 1961, admitting the refund liability. Although a scrutiny notice was issued, no final assessment order under Section 143(3) or an order withholding the refund under Section 241-A had been passed by respondent no. 2. The respondents subsequently filed a short affidavit stating that the refund was withheld under Section 241A after due process. The petitioner then sought to withdraw the writ petition to challenge the action under Section 241A.

What were the issues?

1. Whether the Assessing Officer can withhold an income tax refund without passing a speaking order under Section 241A of the Income Tax Act, 1961, when the refund has been processed under Section 143(1)? Assessee's Contention: The petitioner argued that the Assessing Officer cannot withhold the refund without passing a speaking order under Section 241A. They relied on the judgments in Ericsson India Pvt. Ltd. v. ACIT and Maple Logistics Pvt. Ltd. & Anr. v. Principal Chief Commissioner of Income Tax & Ors. Revenue's Contention: The respondents, through their short affidavit, stated that the petitioner's refund had been withheld under Section 241A of the Income Tax Act, 1961, after observance of due process of law. No specific legal arguments or reliance on authorities were recorded for the revenue in the provided text.

Which sections of the Income-tax Act were involved?

Section 143(1),Section 143(3),Section 241A

AI-generated summary — verify with the full judgment below

$~Suppl.-4 * IN THE HIGH COURT OF DELHI AT NEW DELHI

+ W.P. (C) 8355/2020 & CM APPL. 27138/2020

L.S. CABLE AND SYSTEM LTD. ..... Petitioner Through: Mr. Raghavendra Pratap Singh and Mr. Sanjeev Kumar Singh Advocates.

versus

UNION OF INDIA & ORS.

...... Respondents Through: Mr.Raghvendra Singh, Sr. Standing Counsel with Ms. Easha Kadian, Jr. Standing Counsel , Advocates.

CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MR. JUSTICE SANJEEV NARULA

O R D E R %

25.11.2020 The petition has been heard by way of video conferencing. On the last date of hearing i.e. 22nd October, 2020, this Court had passed the following order: “The petition has been listed before this Bench by the Registry in view of the urgency expressed therein. The same has been heard by way of video conferencing. Present writ petition has been filed seeking directions to respondent no. 2 to release the income tax refund of Rs.1,97,27,981/- for the Assessment Year 2018-2019 to the petitioner. Learned counsel for petitioner submits that the Centralized Processing Center (CPC), Bangalore has already processed the income tax refund of the petitioner under Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the „Act‟) and admitted the total refund liability of Rs.1,97,27,981/- . He further states that though a scrutiny notice has been issued, however respondent no.2 has neither passed a final assessment order under Section 143(3) nor has it passed an order withholding the refund under Section 241-A of 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 30/06/2026 at 11:20:28

the Act. He relies upon the judgments in Ericsson India Pvt. Ltd. v. ACIT, Special Range-3 & Anr, W.P.(C) 10373/2019 wherein while placing the reliance on Maple Logistics Pvt. Ltd. & Anr. v. Principal Chief Commissioner of Income Tax & Ors (Maple Case), this Court has observed that the Assessing Officer cannot withhold refund without passing a speaking order under Section 241A of the Act. Issue notice. Mr.Raghvendra Singh, Advocate accepts notice on behalf of the respondents. He prays for and is permitted to file counter-affidavit within two weeks. Rejoinder-affidavit, if any, be filed within one week thereafter. List on 25th November, 2020. The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail.”

In pursuance to the said order, respondent No.2 has filed a short affidavit in which it is stated that the petitioner’s refund has been withheld under Section 241A of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’) after observance of due process of law. At this stage, learned counsel for petitioner wishes to withdraw the present writ petition to challenge the action under Section 241A of the Act. With the aforesaid liberty, the present writ petition and pending application stand disposed of. All the rights and contentions of the parties are left open. It is made clear that this court has not expressed any opinion on the merits of the controversy. The order be uploaded on the website forthwith. Copy of the order be also forwarded to the learned counsel through e-mail.

MANMOHAN, J

SANJEEV NARULA, J NOVEMBER 25, 2020/TS 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 30/06/2026 at 11:20:28

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