Wp/4829/2022 Of M/S Manyata Promoters Private Limited v. The Deputy Commissioner Of Income Tax

IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24 DAY OF MARCH2022 BEFORE THE HON’BLE MR.JUSTICE B.M.SHYAM PRASAD WRIT PETITION NO.4829/2022(T-IT) BETWEEN : M/SMANYATAPROMOTERSPRIVATELIMITED (ERSTWHILEEMBASSYOFFICEPARKSPRIVATELIMITED) EMBASSYGOLFINKSBUSINESSPARK ROYALOAKSOFFINTERMEDIATERINGROAD BENGALURU–560071 REPRESENTEDBYLATEVISHNOI AGED35YEARS. ... PETITIONER (BY SRI.T. SURYANARAYANA RAO, SENIOR COUNSEL FOR SRI MAHESH CHOWDHERY, ADVOCATE) AND : 1.THEDEPUTYCOMMISSIONEROFINCOMETAX CENTRALCIRCLE,CENTRALCIRCLE1(3) CENTRALREVENUEBUILDING QUEENSROAD BENGALURU–560001. CENTRALCIRCLE,CENTRALCIRCLE1(3) CENTRALREVENUEBUILDING QUEENSROAD BENGALURU–560001. 2.THEPRINCIPALCOMMISSIONEROFINCOMETAX CENTRALREVENUEBUILDING QUEENSROAD BENGALURU–560001. CENTRALREVENUEBUILDING QUEENSROAD BENGALURU–560001. 3.THECENTRALBOARDOFDIRECTTAXES MINISTRYOFFINANCE,NEWDELHI-110001. MINISTRYOFFINANCE,NEWDELHI-110001. 4.THEDIRECTORATEGENERALOFINCOMETAX(SYSTEMS) CENTRALBOARDOFDIRECTTAXES MINISTRYOFFINANCE NEWDELHI–110001. INCOMETAX(SYSTEMS) CENTRALBOARDOFDIRECTTAXES MINISTRYOFFINANCE NEWDELHI–110001. ... RESPONDENTS (BY SRI.E.I. SANMATHI, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE RESPONDENTS TO FORTHWITH REFUND THE TDS CREDIT AMOUNTING TO INR 30,71,87,125/- DUE TO THE PETITIONER, ALONG WITH APPLICABLE INTEREST. THIS WRIT PETITION COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has sought for the following reliefs: a) Direct the Respondents to forthwith refund the TDS credit amounting to INR 30,71,87,125/- due to the petitioner along with applicable interest. refund the TDS credit amounting to INR 30,71,87,125/- due to the petitioner along with applicable interest. b) In the alternative, grant credit of the TDS amounting to INR 30,71,87,125/- in the earlier Assessment Years viz., TDS amounting to INR 30,71,87,125/- in the earlier Assessment Years viz., AYs 2016-17, 2017-18 and 2018-19 and direct granting of refund, when the corresponding income was offered to tax”. Sri T.Suryanarayana, learned Senior Counsel for the petitioner, submits that the petitioner’s entitlement for TDS credit as claimed in the returns for the assessment year 2019-20 pursuant to Form-26AS cannot be denied in view of the provisions of Section 199 of the Income Tax Act, 1961 (for short, ‘IT Act’) and in fact, it is not denied by the impugned order, however it is stated that the TDS credit cannot be allowed because the functionality in the automated process does not enable transfer of TDS. In elaboration, Sri T.Suryanarayana submits that the petitioner, which files returns on the actual basis, offered income during the assessment years preceding the assessment year 2019-20 but there were no actual receipts. The actual receipts from the concerned are in the assessment year 2019-20 with necessary TDS credited to the petitioner. The petitioner who has offered income earlier would be entitled to TDS credit with the payment and TDS affected by the payer. The procedural difficulties because of the automation cannot be a reason to deny credit that would otherwise be available to the petitioner. Sri E.I.Sanmathi, learned counsel for the respondents, is unable to controvert essential submissions on behalf of the petitioner viz., that the petitioner’s request for rectification is rejected not because there is denial of the petitioner’s entitlement to the TDS credit returns but because of a functional disability in the automated process. This Court is persuaded to opine that with the authorities not disputing the petitioner’s entitlement to TDS credit, the petitioner is entitled for refund by 30.4.2022. Sri E.I.Sanmathi, learned counsel for the respondents, is unable to controvert essential submissions on behalf of the petitioner viz., that the petitioner’s request for rectification is rejected not because there is denial of the petitioner’s entitlement to the TDS credit returns but because of a functional disability in the automated process. This Court is persuaded to opine that with the authorities not disputing the petitioner’s entitlement to TDS credit, the petitioner is entitled for refund by 30.4.2022. Therefore, the petition is allowed declaring that the petitioner is entitled for TDS credit amount to Rs.30,71,87,125/- in the assessment year 2019-20 and directing the respondents to take necessary action to ensure that benefit of such refund is available to the petitioner for the assessment year 2019-20 within a period of eight (8) weeks from the date of receipt of a certified copy of this order. SD/- JUDGE SA/- Ct:sr