Reliance Has Been Laid On Dwejesh Acharya v. Income-Tax Officer :[2023] 157 Taxmann.com 332 (Rajasthan

Chief Justice's Court Case :- WRIT TAX No. - 1953 of 2024 Petitioner :- Dish TV India Limited Respondent :- Commissioner of Income Tax (TDS) and 2 othersCounsel for Petitioner :- Vivek Sarin, Divyanshi Singh,Harsh Vardhan GuptaCounsel for Respondent :- Gaurav Mahajan, Manu Ghildyal Hon'ble Arun Bhansali,Chief JusticeHon'ble Kshitij Shailendra,J. 1.This writ petition has been filed by the petitioner seeking refund ofRs.2,19,42,954/- as amount of tax arrears refundable to the petitioner as per theorder of full and final settlement of tax arrears in Form 5 dated 20.09.2022issued under Section 5(2) read with Section 6 of the Vivad Se Vishwas Act,2020 (‘VSV Act, 2020’) along with interest under Section 244A of the IncomeTax Act, 1961 (‘Act, 1961’). 2. It is inter-alia indicated that the TDS return was filed by the petitionerfor F.Y. 2008-09, which was taken up for assessment by the assessing officer.The assessment proceedings were concluded vide assessment order dated31.3.2011 creating a total demand of Rs.40,56,14,101/- under Section201/201(1-A) of the Act, 1961. The demand was raised on the alleged shortpayment of TDS along with interest. 3. The demand was challenged by the petitioner before the first appellateauthority, who by order dated 21.8.2013 allowed the appeal and remanded thematter back for fresh assessment. The assessing officer by the revisedassessment order dated 18.11.2013 imposed total demand of Rs.2,25,48,341/-(tax demand of Rs.6,05,387/- and interest Rs.2.19 crore) for F.Y. 2008-09. 4. A demand notice dated 18.11.2013 under Section 156 of the Act, 1961withholding refund equivalent to demand of Rs.2,25,48,341/- was passed. Therevised assessment order dated 18.11.2013 was challenged by the petitionerbefore the Income Tax Appellate Tribunal (‘I.T.A.T.’), which by order dated29.2.2016 dismissed the appeal filed by the petitioner. The order passed by theI.T.A.T. dated 29.2.2016 was challenged before this Court by filing Income TaxAppeal No. 26 of 2018. 5. In the meanwhile, the Central Government notified the VSV Act,2020 to provide for resolution of tax disputes. The petitioner by submittingForm 1 & 2 dated 8.3.2021 applied for the settlement of disputed tax forF.Y. 2008-09 under the VSV Act, 2020 inter-alia indicating the amountpayable under the VSV Act, 2020 at Rs.6,05,387/-. The application made bythe petitioner was accepted and certificate in Form 3 was issued determiningRs.2,19,42,954/- as amount refundable to the petitioner. 6.As required, the petitioner filed declaration of advance payment inForm 4 dated 31.05.2021, based on which certificate dated 16.04.2021 wasissued. The petitioner withdrew the pending Income Tax Appeal from thisCourt and the respondents issued order for full and final settlement of taxarrears under Section 5(2) of the VSV Act, 2020 in Form 5 dated20.09.2022, indicating refundable sum of Rs.2,19,42,954/-. However, theamount was not refunded as determined by order dated 20.09.2022 despiteseveral follow ups and representations made to the respondents seekingrefund along with interest. No response was received by the petitioner.Based on the said submissions, relief, as noticed hereinbefore, has beensought. 7. Learned counsel for the respondents were directed to complete hisinstructions. 8. Today Sri Manu Ghildyal, learned Standing Counsel appearing onbehalf of the respondents submitted that after filing of the writ petition, acommunication dated 19.11.2024 has been issued to the petitioner requestingthe company to submit their claim for refund of excess TDS in prescribedForm 26B through online functionality provided in TRACES so that furthernecessary action may be taken by the office and that if the petitioner doesthe needful, the refund would be paid to it. 9. It is further submitted that under the provisions of Section 7 of theVSV Act, 2020 no interest is payable. 7. Learned counsel for the respondents were directed to complete hisinstructions. 8. Today Sri Manu Ghildyal, learned Standing Counsel appearing onbehalf of the respondents submitted that after filing of the writ petition, acommunication dated 19.11.2024 has been issued to the petitioner requestingthe company to submit their claim for refund of excess TDS in prescribedForm 26B through online functionality provided in TRACES so that furthernecessary action may be taken by the office and that if the petitioner doesthe needful, the refund would be paid to it. 9. It is further submitted that under the provisions of Section 7 of theVSV Act, 2020 no interest is payable. 10. Learned counsel for the petitioner made submissions that the plearaised by the respondents by sending communication dated 19.11.2024 isde-hors the provisions of the VSV Act, 2020 and Act, 1961. 11. Submission has been made that the petitioner is seeking refund basedon the provisions of VSV Act, 2020 whereby Form 5 indicating the amountrefundable has been issued way back on 20.9.2022 and the respondents arebound to return the amount based on the said Form 5 along with interestunder Section 244A of the Act, 1961 and the plea raised pertaining to thesubmission of Form 26B for seeking refund has been raised only with a viewto deprive the petitioner of interest to which it is otherwise entitled. 12. Reliance has been laid on Dwejesh Acharya v. Income-tax Officer :[2023] 157 taxmann.com 332 (Rajasthan). 13. Learned counsel for the respondents reiterated the submissions thatpetitioner has to apply in Form 26B as the amount of refund pertains toexcess TDS and that on such application being made in Form 26B, needfulwould be done to the petitioner. 14. We have considered the submissions made by learned counsel for theparties and perused the material available on record. 15. The facts are not in dispute wherein, the petitioner applied under theVSV Act, 2020 and in full and final settlement Form 5 under the provisionsof the VSV Act, 2020 was issued entitling the petitioner to refund ofRs.2,19,42,954/-. Despite issuance of the said Form, the amount, whichshould have been automatically paid by the respondents, was not paid,forcing the petitioner to file the present petition. 16. After filing of the present petition, after a passage of two years, it didnot lie on the respondents that the petitioner was required to fill Form 26B ofthe Income Tax Rules for seeking the refund. The said action of therespondents, has no basis inasmuch as once Form 5 under the VSV Act,2020 was issued entitling the petitioner to a refund of Rs.2,19,42,954/-, therewas no question of the respondents then requiring to file Form 26Bas nowsought to be demanded by the respondents. 17. A perusal of the Rules would reveal that Form 26B is required to befilled up if the assessee claims refund paid under Chapter XVII-B of the Act,1961. The stage of requirement of filling up the Form 26B was long over inthe year 2008-09 itself and the present refund was being sought by thepeititoner in terms of the provisions of the VSV Act, 2020, which did notrequire filling up any Form, as claimed by the respondents and as such, thedemand made has no sanction in law. 18. So far as the demand made by the petitioner with regard to interest isconcerned, the Delhi High Court in the case of Ms. Anjul v. Office of PCIT :[2022] 145 taxmann.com 140 while relying on judgment of Hon'bleSupreme Court in Union of India v. Tata Chemicals Limited : (2014) 6 SCC335 held that the State having received the money without right and havingretained and used it, is bound to make the party good, just as an individualwould do under like circumstances. The obligation to refund money receivedand retained without right implies and carries with it the right to interest. 18. So far as the demand made by the petitioner with regard to interest isconcerned, the Delhi High Court in the case of Ms. Anjul v. Office of PCIT :[2022] 145 taxmann.com 140 while relying on judgment of Hon'bleSupreme Court in Union of India v. Tata Chemicals Limited : (2014) 6 SCC335 held that the State having received the money without right and havingretained and used it, is bound to make the party good, just as an individualwould do under like circumstances. The obligation to refund money receivedand retained without right implies and carries with it the right to interest. 19. Bombay High Court in the case of UPS Freight Services India (P.)Ltd.v. Dy. CIT : [2022] 156 taxmann.com 489 while following the order inthe case of Ms. Anjul (supra) also ordered for payment of interest as per therate prescribed under Section 244A of the Income Tax Act in similarcircumstances. 20.So far as the plea raised by learned counsel for the respondents withreference to provisions of Explanation to Section 7 of VSV Act, 2020 isconcerned, the same has been noticed for rejection only. 21. The provisions of Section 7 of VSV Act, 2020 read as under: "7. Any amount paid in pursuance of a declaration made undersection 4 shall not be refundable under any circumstances. Explanation.- For the removal of doubts, it is hereby clarified thatwhere the declarant had, before filing the declaration under sub-section (I) of section 4, paid any amount under the Income-tax Actin respect of his tax arrear which exceeds the amount payableunder section 3, he shall be entitled to a refund of such excessamount, but shall not be entitled to interest on such excess amountunder section 244A of the Income-tax Act." 22. A bare perusal of the Explanation would reveal that the Explanationpertains to payment of any amount under the Income Tax Act for the periodbefore filing the declaration under sub- section (1) of Section 4 of the VSVAct, 2020 and nothing to do with the entitlement to interest for the periodafter issuance of Form No.5 indicating entitlement of the petitioner to theamount of refund. 23.In view of the above discussion, for the delayed payment, thepetitioner is entitled to interest on the refund amount for the delay beyondthe period of 90 days from the date of refund order i.e. 20.09.2022. 24. Consequently, the writ petition is allowed. 25.It is directed that respondents shall make payment of refund ofRs.2,19,42,954/- along with interest @ 6% per annum on the delayed refundamount with effect from 20.12.2022 i.e. beyond the period of 90 days fromthe date of determination of refund amount on 20.9.2022 till the date ofactual payment to the petitioner. The entire amount of refund and interest bepaid within a period of eight weeks from the date of this order. Order Date :- 2.12.2024 nd (Kshitij Shailendra, J.) (Arun Bhansali, CJ)