High Court Grants Interest on Delayed Income Tax Refund

Case Name:

D.B. Civil Writ Petition No. 10210/2022 - Dwejesh Acharya S/o Late Kalyan Sharma, Registered Legal Heir Of Late Shri Acharya Hari Sharma S/o Late Kalyan Sharma v. Income Tax Officer, Jaipur, and Others

Key Takeaways:

1. The petitioner filed a writ petition seeking interest on the delayed income tax refund.
2. The court ruled in favor of the petitioner, granting interest at the rate of 6% per annum on the delayed refund amount.
3. The interest was to be calculated from 8/6/2021, beyond the period of 90 days from the date of determination of the refund amount, till the date of actual/last payment.
4. The respondents were directed to make the payment of interest within 08 weeks from the date of the court’s order.

Case Synopsis:

This is a legal from the High Court of Judicature for Rajasthan, specifically from the Bench at Jaipur, regarding a Civil Writ Petition No. 10210/2022. The petitioner, Dwejesh Acharya, has filed a writ petition seeking a direction to the respondents for the payment of interest on the amount of refund due against the respondents, which include various income tax authorities and the Central Board of Direct Tax.

The petitioner’s claim for interest on the refund amount is based on the provisions of the Vivad Se Vishwas Act, 2020 (VSV Act) for settlement of disputes. The petitioner had filed an application under the VSV Act for the dispute relating to Assessment Year 2013-14 and received Form No. 3 of the VSV Act on 25/1/2021 indicating a refund of Rs.3,47,03,505. Subsequently, after making several representations, the petitioner received adjustment against demands but no interest was paid for the delayed payment.

The court considered the submissions made by both parties and perused the material available on record. It was observed that the order in Form No. 5 had been issued by the designated authority under the VSV Act, 2020, determining the amount refundable to the petitioner. The court also referred to judgments by the Delhi High Court and the Bombay High Court in similar circumstances, where interest was ordered to be paid as per the rate prescribed under Section 244A (of Income Tax Act, 1961).

The court held that for the delayed payment, the petitioner is entitled to interest on the refund amount for the delay beyond the period of 90 days from the date of refund determination. Consequently, the writ petition was allowed, and it was directed that the respondents-revenue shall make payment of interest at the rate of 6% per annum on the delayed refund amount from 8/6/2021 (beyond the period of 90 days from the date of determination of refund amount on 8/3/2021) till the date of actual/last payment. The payment of interest was to be made within 08 weeks from the date of the order.

In summary, the court ruled in favor of the petitioner, granting the request for interest on the delayed refund amount as per the provisions of the VSV Act and the Income Tax Act.

FAQ:

Q1: What was the petitioner seeking in the writ petition?

A1: The petitioner sought a direction for the payment of interest on the amount of income tax refund due against the respondents.

Q2: What was the court’s ruling in the case?

A2: The court ruled in favor of the petitioner, granting interest at the rate of 6% per annum on the delayed refund amount.

Q3: From which date was the interest to be calculated?

A3: The interest was to be calculated from 8/6/2021, beyond the period of 90 days from the date of determination of the refund amount, till the date of actual/last payment.

Q4: What was the timeline for the payment of interest as per the court’s order?

A4: The respondents were directed to make the payment of interest within 08 weeks from the date of the court’s order.