M/S. Bombardier Transportation India Pvt Ltd v. Deputy Commissioner Of Income-Tax (Tds) ==========================================================

IN THE HIGH COURT OF GUJARAT AT AHMEDABADR/SPECIAL CIVIL APPLICATION NO. 12647 of 2019 ==========================================================M/S. BOMBARDIER TRANSPORTATION INDIA PVT LTD VersusDEPUTY COMMISSIONER OF INCOME-TAX (TDS) ========================================================== Appearance: MR B S SOPARKAR(6851) for the Petitioner(s) No. 1MR.VARUN K.PATEL(3802) for the Respondent(s) No. 1========================================================== CORAM:HONOURABLE MS. JUSTICE SONIA GOKANIandHONOURABLE MR. JUSTICE SANDEEP N. BHATT Date : 23/01/2023 ORAL ORDER (PER : HONOURABLE MS. JUSTICE SONIA GOKANI) 1.We have heard the learned counsel on thedraft amendment. Draft amendment is permitted to becarried out forthwith. 2. The original petitioner company-Bombardier Transportation has been acquired by the presentpetitioner with the change of the name which has takenover all the responsibilities of the erstwhile company.Thus, the petitioners in place of M/s BombardierTransportation India Private Limited would be AlstomRail Transportation India Private Limited. 3.It is engaged in the business of manufacturingof trains. In the financial year 2012-13, the petitionerremittedRs.35,09,92,996/-totheBombardierTransportation Canada INC for certain expenses. The taxwas deducted on payment of Rs.16,45,31,524/-, but thetax was not withheld on the payments ofRs.16,41,18,167/-. This according to the petitioner, onaccount of availability of `make available clause’ underDouble Taxation Avoidance Agreement, vide order underSection 201(1) and 201(1A) dated 20.2.2015, the DCITInternational taxation was of the opinion that thepetitioner ought to have deducted the tax on payment ofRs.16.41 crore and raised the demand under Section201(1) and 201(1A) for a sum of Rs.2,29,49,177/- andRs.52,78,311/- respectively. The petitioner made paymentof Rs.50 lacs under protest on 18.3.2015 and filed appealbefore the Commissioner of Income Tax (Appeals)(`CIT(Appeals)’). 4.The CIT(Appeals) allowed the same on21.12.2015. The demand was made nil on 12.1.2016. 5.The appeal to the Income Tax AppellateTribunal (ITAT) by revenue was dismissed on 3.1.2017.The refund was requested for the sum of Rs.50 lacs paidunder protest. Letter was also communicated to JointCommissioner of Income Tax (international taxation) on1.7.2016. The appeal to the Income Tax Appellate 6.It seems the complaint to the CPGRAM forrefund on 19.6.2017 which provided the reply on11.7.2017 and 2.8.2017 directing the effect to be given tothe appeal. Again the petitioner approached on16.10.2017 the CPGRAM that it was made to run frompillar to post. It seems the complaint to the CPGRAM for 7. On 20.2.2018, the petitioner received the letter from the respondent seeking the details which had beenprovided to the DCIT on 7.3.2018. On 16.4.2018, itcommunicated for filing the fresh online application inForm 26B on the TRACES so that the office of theDeputy Commissioner of Income Tax is unable to processthe request as certificate of no demand outstandingagainst PAN/ TAN was needed from the jurisdictionalAO alongwith the details of the bank account. 8.This, according to the petitioner, has been donefor which the communication had been addressed to theDeputy Commissioner of Income Tax on 28.1.2020pointing out that the company again applied for onlineapplication on form 26B for assessment year 2013-14.The challan of Rs.50 lacs had reflected unconsumed forthe amount of maximum refund allowed was shown asnil and entire amount shown as remaining availablebalance. 8.This, according to the petitioner, has been donefor which the communication had been addressed to theDeputy Commissioner of Income Tax on 28.1.2020pointing out that the company again applied for onlineapplication on form 26B for assessment year 2013-14.The challan of Rs.50 lacs had reflected unconsumed forthe amount of maximum refund allowed was shown asnil and entire amount shown as remaining availablebalance. 9.We find the very contents in e-mail sent on27.1.2020 addressed to TDS helpline, where the grievanceis raised that for the assessment year 2013-14, the TDSof Rs.50 lacs had been paid, the order had beenpronounced in favour of the companies of ITAT, awritten request to the assessing officer was made alongwith form 26B, however, it was not processed and theassessing officer had asked to file form 26B forprocessing refund of Rs.50 lacs. However, whilesubmitting form 26B, another grievance is that therefund amount is reflected as nil though the entireamount is not utilized. 10.Even if there is nothing to show as to howthe communication has gone on 30.1.2020, reflecting thesame, the fact remains that the e-mail sent on 27.1.2020has gone through the electronic mode and there cannotbe any doubt with regard to its reaching the personwhose e-mail id is provided. Nothing appears to havebeen done thereafter. Even if there is nothing to show as to how 11.The Bombay High Court in case of VodafoneIdea Ltd. V/s Commissioner of Income Tax reported in[2019] 267 Taxman 408, was considering a case of arefund where the assessee suffered sizeable deduction oftax at source. The refund of huge amount had arisen onaccount of the computer glitch at the Central ProcessingCentre which was conveyed by the department that theassesse’s refund claimed could not be withheld. Thedepartment was directed to release the refund withstatutory interest after manually quantifying the same. “7. When material facts are nt disputable, we do not seeany reason why the petitioner should not get the refundwhich flows from the order of assessment. The departmentdoes not dispute that the demands for other assessment years of the petitioner are presently not enforceable. Thatbeing the position, the refund of the petitioner arising out ofthe order of assessment for the said assessment year 2014-15, cannot be withheld, that too on the ground of technicaldifficulty of the system not accepting such a declaration ofstay of the demands and giving effect to such position. 8. The computer system and auto generation or anydifficulty in doing so in a particular case, cannot overridethe correct legal position. In the present case, the correctlegal position is that the petitioner must receive the refund.Whatever the technical difficulties in releasing the refund,the department must sort it out. If for some reason oftechnical glitch the system in the present case fails topermit the payment of refund, the concerned authorizedofficer must manually do so. We, therefore, direct therespondents to release the petitioner’s refund amount ofRs.224,28,74,090/- with statutory interest, which shall bedone within a period of two weeks from the date of receiptof this order. 9. Before closing, we observe that this situation cannot bepeculiar to the petitioner alone. Surely, before thedepartment, there would be large number of cases ofassessees where the refund claim out of an order ofassessment or appellate order arises as against which thesame assessee may have demands for other assessment years, recovery of which, may have been suspended. In all such cases, similar difficulty may be faced by thedepartment. We except the department to address this largerissue so that similar disputes do not have to travel to theHigh Court for resolution.” Except the fact that there was no form filled by the 9. Before closing, we observe that this situation cannot bepeculiar to the petitioner alone. Surely, before thedepartment, there would be large number of cases ofassessees where the refund claim out of an order ofassessment or appellate order arises as against which thesame assessee may have demands for other assessment years, recovery of which, may have been suspended. In all such cases, similar difficulty may be faced by thedepartment. We except the department to address this largerissue so that similar disputes do not have to travel to theHigh Court for resolution.” Except the fact that there was no form filled by the petitioner in form 26B for the department to process therefund of Rs.50 lacs, no other ground is emerging. 13.Learned advocate Mr.Patel, on instructions,volunteered that within three months, it shall be in aposition to complete the same noticing the fact that thecompany has changed its name with all its past andfuture liabilities. Of course, it has been given e-pannumber and it is the same pan number which was withM/s Bombardier Transportation, however, necessaryprocedure shall need to be completed by the petitionerand name change with supporting documents shall go tothe concerned officer-ACIT Income Tax Vadodara both e-copies and physical copies through registered letterwithin one week from the date of receipt of this order.Let process be completed in a three months’ period, afterreceipt of such copies. If not done within three months, Learned advocate Mr.Patel, on instructions, the amount of compensation to be paid shall be Rs.1lacs.14.This petition stands disposed off in aboveterms. (SONIA GOKANI, J) SRILATHA (SANDEEP N. BHATT,J)