Versusthe Deputy Commissioner Ofincome Tax (Tds) & Ors v. Kotwal, Jj.date: 30[Th] April, 2019

1 / 6 03-WP-1103-19.odt IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO.1103 OF 2019 M/s. Vodafone Idea Limited.... Petitioner versusThe Deputy Commissioner ofIncome Tax (TDS) & Ors.... Respondents ….... Mr.Deepak Chopra with Mr.Atul K. Jasani, Advocate for Petitioner.Mr.Deepak Chopra with Mr.Atul K. Jasani, Advocate for Petitioner. Mr.Sham Walve, Advocate for Respondent.Mr.Sham Walve, Advocate for Respondent. CORAM : AKIL KURESHI &SARANG V. KOTWAL, JJ.DATE: 30[th] APRIL, 2019. P.C. : 1. Heard learned Counsel for the parties for final disposalof the Petition. Petitioner’s grievance is that a refund ofRs.21,45,54,980/- payable to the Petitioner is not released bythe Income Tax Department. This refund is admittedly payableto the Petitioner and it arises in the factual background which can be gathered from the communication issued by theAssessing Officer himself on 25/04/2019, relevant portion ofwhich reads as under; “02.In this regard, Principal demand ofRs.27,93,47,377/- was raised u/s 201(1) of the Act1961 from AY 2007-08 to AY 2012-13. The Assesseepreferred appeal before CIT (A), Pune. The CIT (A)confirmed the order of the Assessing Officer upholdingthe said demand. Assessee had depositedRs.21,48,21,980/- against the said demand. Thereafter,Assessee again preferred appeal before ITAT, Pune. Thesaid demand was deleted by ITAT, Pune. Meanwhile,further demands of Rs.53,18,76,993/- u/s 201(1) of theAct were raised for AY 2013-14 to AY 2016-17.Accordingly, Rs.21,48,21,980/- which were depositedagainst the demand for AY 2007-08 to AY 2012-13 wasconsidered as payment against demand for AY 2013-14to AY 2016-17. Subsequently, the demand for AY 2013-14 to AY 2016-17 was again deleted by CIT (A)-10,Pune. The order is received in month of March, 2019and appeal effect was given on 28/03/2019.” 2. However, from the same communication we gatherthat the Assessing Officer was unable to issue the refund onaccount of error of Rs.20,02,034/- in the system of the 3 / 6 03-WP-1103-19.odt department. Again the fact that this amount was not due andpayable by the Petitioner to the department but was on accountof rectifiable error can be gathered from yet anothercommunication dated 07/08/2018 issued by the AssessingOfficer. Relevant portion of which reads as under; “It has come to my notice vide various letters submittedby Vodafone Mobile Services Ltd. ('Company') thatduring the period FY 2011-12 – Quarter 3 (Form 27Q)the company had deducted and deposited the TDSamounting to INR 10,89,736, on payment made toHSBC and reported the transaction in the TDS statementfiled for Old TAN (i.e. PNEH05354G). However, theCompany has informed that while filing the quarterlyTDS statement for the period FY 2011-12 – Quarter 4(Form 27Q), the Company has also, inadvertentlyreported the above mentioned payment in New TAN (i.e.PNEB01584C) as well. On account of the above inadvertent error andduplication of the entry towards payments made toHSCB, default demand for short payment of tax atsource is reported against the new TAN of the Company. 4 / 6 03-WP-1103-19.odtI have verified the details / documents submitted by theCompany in this regard and have found the same to bein order. Since the TDS default has arisen due to incorrectreporting of foreign remittance to HSCB (deductee nothaving PAN in India) in the TDS statement filed for2011-12 – Quarter 4, the TRACES Team is herebydirected to delete the “C” flag with respect to the saidtransaction in their records / system so that theCompany is able to make revision / correction in its TDSstatement filed for FY 2011-12 – Quarter 4.” 3. On account of the above inadvertent error andduplication of the entry towards payments made toHSCB, default demand for short payment of tax atsource is reported against the new TAN of the Company. 4 / 6 03-WP-1103-19.odtI have verified the details / documents submitted by theCompany in this regard and have found the same to bein order. Since the TDS default has arisen due to incorrectreporting of foreign remittance to HSCB (deductee nothaving PAN in India) in the TDS statement filed for2011-12 – Quarter 4, the TRACES Team is herebydirected to delete the “C” flag with respect to the saidtransaction in their records / system so that theCompany is able to make revision / correction in its TDSstatement filed for FY 2011-12 – Quarter 4.” 3. Upon perusal of the communication it would appearthat due to human error, the Petitioner had shown payment toHSBC under old as well as new TAN giving rise to TDSmismatch. The Assessing Officer himself agrees that this is anerror and the demand should be deleted from the system.Despite this communication from the Assessing Officer, thecomputer system of the department has not taken steps to deletethe demand. As a result of which, the Petitioner’s sizable taxrefund in access of Rs.21 Crores is held up. 4. Facts being clear, in our opinion, the department cannot withhold the refund of the Petitioner. Firstly, thecomputer system cannot override the factual aspects. If therefund is payable, whether the computer systems accepts or not,is of no consequence. More importantly, in the present case,according to the department itself, the error had to be rectified.Had this be done timely, there would have been no delay inreleasing the Petitioner’s refund. 5. the following directions;the following directions; Under these circumstances, Petition is disposed of with (i)The Respondent shall release the refund of thePetitioner arising out of the assessment for theassessment years 2007-2008 to 2010-2011 withstatutory interest latest by 15/05/2019.Petitioner arising out of the assessment for theassessment years 2007-2008 to 2010-2011 withstatutory interest latest by 15/05/2019. (ii)The Department shall take steps to rectify theerror of TDS mismatch in the computer systempertaining to the Petitioner. This may be doneerror of TDS mismatch in the computer systempertaining to the Petitioner. This may be done 6 / 6 03-WP-1103-19.odt as expeditiously as possible. However, therefund of the Petitioner shall not be linked withthe rectification of the error. (iii)Petition is disposed of accordingly. (SARANG V. KOTWAL, J.) (AKIL KURESHI, J.)