The litigation for Vodafone Mobile in India is not coming to an end. By each passing day, the company is facing new challenges imposed by the revenue department.
In a very recent judgment, Hon’ble High court of Delhi has allowed the discretion of the Assessing Officer of not processing the income tax return and refund of the company.
- The company filed its return of income for AY 2014-15 and AY 2015-16, claiming refunds of Rs. 1,532.09 crores and Rs. 1,355.51 crores, respectively. The return of income pertaining to the assessment year 2016-17, claiming refund of Rs. 1128.47 crores were filed. However, this too had not been processed to date.
- Vodafone requested the revenue for expeditious processing of the pending income-tax returns.
- Thereafter, a writ petition was filed by the petitioner ‘Vodafone’ on account of inaction on the part of the Assessing Officer in processing income tax returns for four assessment years 2014-15 to 2017-18 which would result in the issuance of refunds aggregating to Rs. 4759.74 crores along with applicable interest under section 244A.
- The writ petition claimed a direction upon the Assessing Officer to expeditiously process the refund claim made by Vodafone, and issue a refund in respect of Vodafone’s income tax returns for the relevant period under consideration.
- The assessee’s argument in these proceedings is that once the one year period in the proviso to section 143 (1) ends, the return – and whatever calculations are contained in it, with respect to tax liability as well as the consequential refunds, become final, subject to only one event: issuance of notice under section 143(2).
- Revenue contended that substantial outstanding demand is pending against the petitioner. Further, the likelihood of substantial demands upon the assessee after the scrutiny for the assessment years is completed, cannot be ruled out.
The judgment of the High Court of Delhi has clearly stated that the issue of a refund is the discretion of the Assessing Officer in cases where there is a possibility of scrutiny assessment. This will surely lead to a delay in the issue of refund of various assessee’s having adverse past assessment history and will act as a hurdle in governments’ claims of faster refund processing in India.