Wp(C)/26588/2019 Of Unitac Energy Solutions(India)Pvt.ltd v. Principal Chief Commissioner Of Income Tax

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE ALEXANDER THOMAS TUESDAY, THE 04TH DAY OF FEBRUARY 2020 / 15TH MAGHA, 1941WP(C).No.26588 OF 2019(W) PETITIONER: UNITAC ENERGY SOLUTIONS(INDIA)PVT.LTD.2ND FLOOR, UNITAC ARCADE, OPPOSITE DECATHALON, N.H.BYPASS, THYKOODAM, VYTTILA, KOCHI-682019. BY ADV. SMT.NISHA JOHN RESPONDENTS: 1PRINCIPAL CHIEF COMMISSIONER OF INCOME TAXKOCHI, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018.2019KOCHI, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018.2019 KOCHI, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, 2JOINT/ADDITIONAL COMMISSIONER OF INCOME TAX,CORPORATE CIRCLE-2(1), KOCHI, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018.CORPORATE CIRCLE-2(1), KOCHI, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018. 3THE ASSISTANT COMMISSIONER OF INCOME TAX,CORPORATE CIRCLE-2(1), KOCHI, 3RD FLOOR, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018.CORPORATE CIRCLE-2(1), KOCHI, 3RD FLOOR, CENTRAL REVENUE BUILDING, I.S.PRESS ROAD, KOCHI-682018. 4ADDL.R4- CENTRALISED PROCESSING CENTRE,INCOME TAX DEPARTMENT, BANGLORE-560 500,REPRESENTED BY DEPUTY COMMISSIONER OF INCOME TAX, CPC.(ADDL.R4 ISIMPLEADED AS PER ORDER DATED 26.11.2019 IN IA.2/2019 IN WP(C))INCOME TAX DEPARTMENT, BANGLORE-560 500,REPRESENTED BY DEPUTY COMMISSIONER OF INCOME TAX, CPC.(ADDL.R4 ISIMPLEADED AS PER ORDER DATED 26.11.2019 IN IA.2/2019 IN WP(C)) R1-3 BY ADV. SRI.P.K.RAVINDRANATHA MENON (SR.)R1-3 BY SRI.JOSE JOSEPH, SC, FOR INCOME TAXR1-3 BY SRI.JOSE JOSEPH, SC, FOR INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON04.02.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: ALEXANDER THOMAS, J ============================ WP(c) NO. 26588/2019 ============================================== Dated this the 4th day of February 2020 JUDGMENT The factual aspects broadly stated in this writ petition are as follows: That the petitioner company is aggrieved by the non-disbursal ofrefund for the A.Y. 2017-18 in terms of Ext.P1 intimation under section143(1) of the Act. Petitioner is also seeking for a direction to process thereturn for A.Y. 2018-19. Revenues failure to grant refund has resulted inblocking of working capital of petitioner company and has caused gravefinancial hardship. The aggregate of the eligible refunds if A.Y. 2019-20 isalso included, would come to around Rs.8 crores. If legitimate refundscontinue to be held back and the processing of return and consequentissuance of refunds are delayed, petitioner company cannot survive due tolack of working capital. Hence aggrieved by the failure of respondents toissue refund for the A.Y. 2017-18 and to process the return for A.Y. 2018-19, this writ petition is filed with the following prayers. (a)To issue a writ of mandamus or any other appropriate writ,order or direction directing the respondents to issue the refund dueto the petitioner in terms of Ext.P1 for the AY 2017-2018. (b)to issue a writ o f mandamus or any other appropriate writ,order or direction directing the respondents to process the return for the A.Y. 2018-19 and issue the refund due to the petitioner withoutdelay. 2.Heard Smt. Nisha John, learned counsel appearing for the petitioners and Sri. Jose Joseph, learned standing counsel for the IncomeTax Department, Government of India, appearing for all the respondents. (a)To issue a writ of mandamus or any other appropriate writ,order or direction directing the respondents to issue the refund dueto the petitioner in terms of Ext.P1 for the AY 2017-2018. (b)to issue a writ o f mandamus or any other appropriate writ,order or direction directing the respondents to process the return for the A.Y. 2018-19 and issue the refund due to the petitioner withoutdelay. 2.Heard Smt. Nisha John, learned counsel appearing for the petitioners and Sri. Jose Joseph, learned standing counsel for the IncomeTax Department, Government of India, appearing for all the respondents. 3.The respondents have initially filed a statement dated30/11/2019 in this case. Later, Sri.Jose Joseph, learned standing counselfor the Income Tax Department, Government of India appearing for therespondents have submitted that there are some crucial subsequentdevelopments in this case which has occurred after the filing of thestatement on 30/11/2019 and that an additional statement in that regard isbeing filed. Accordingly, it is seen that the additional statement dated27/01/2020 has been filed on behalf of the respondent before this Court on29/01/2020. Smt. Nisha John, learned counsel appearing for the petitionerhas made submissions mainly in tune with the pleadings in WP(c) as wellas the reply affidavit to the first statement. 4.From the submissions made on behalf of the respondents, itappears that the facts stated in this case are in relation to two assessmentyears for the petitioner assessee, viz, assessment years 2017-18 and thesubsequent assessment year, 2018-19. According to the respondents,assessment under Section 142(3) for the assessment year 2017-18 in this case was duly completed on 27/12/2020 and that, refund of an amount tothe tune of Rs.2,73,03,515/- was duly ordered. Further that, adjustment inthat regard was made by the competent authority of the respondent underSection 245 of the Income Tax Act, whereby the balance refund due to thepetitioner to the tune of Rs.1,20,67,181/- for the assessment year 2017-18and that proceedings are issued, directing the said balance refund amountto be duly released to the petitioner as per proceedings issued on30/01/2020. Further it is stated by the learned standing counsel for therespondents that steps are to be taken to ensure that the said refundamount of Rs.1,20,67,181/- is duly credited to the bank account of thepetitioner through electronic means without much delay and it is expectedthat process will be completed within a week or so. 5.Further it is pointed out that for the assessment year 2018-19,the demand was to the tune of Rs.1,52,36,334/-, the demand includinginterest as brought out in the intimation under Section 143(1) for the saidassessment year 2018-19 comes to Rs.1,52,36,334/-. Further it is pointedout that for the assessment year 2018-19, the petitioner has filedrectification application u/s 154 of the IT Act, which has now been receivedby the respondent on 27/01/2020. It is pointed out that under theprovisions contained in Section 154(8) of the IT Act, the Assessment Officerhas a time limit up to a period of 6 months from the date of receipt of the application to consider and dispose off the same. It is pointed out that themain issue raised in the rectification application is that due to someapparent problems in the TDS amounts, due credit was not given and thatthe plea of the petitioner is that if those technical issues are dealt with, thenthe petitioner is legally entitled to secure the benefit of those TDS creditsand therefore, petitioner is entitled for a refund of an amount to the tune ofRs.3,34,63,050/-. application to consider and dispose off the same. It is pointed out that themain issue raised in the rectification application is that due to someapparent problems in the TDS amounts, due credit was not given and thatthe plea of the petitioner is that if those technical issues are dealt with, thenthe petitioner is legally entitled to secure the benefit of those TDS creditsand therefore, petitioner is entitled for a refund of an amount to the tune ofRs.3,34,63,050/-. 6.Having regard to the facts and circumstances of this case, it isordered that the Assessment Officer concerned, viz, the 3[rd] respondent-Assistant Commissioner of Income Tax, who is the assessing officerconcerned, may take all reasonable endeavors possible under thesecircumstances to ensure that the plea made by the petitioner in the abovesaid rectification application filed under section 154 of the IT Act, for theassessment years 2018-19 may be taken up without any further delay, andafter affording reasonable opportunity of being heard to the petitioner,through authorized officials or a counsel if any, will take a considereddecision thereon and also take into consideration, the plea of the petitionerthat the petitioner is legally entitled for securing the benefit of claim forTDS credit as afore stated without much delay, going by the case of thepetitioner, that the amounts involved in the TDS problems are rectified,which comes to the tune of more than Rs.3.34 crores, and also taking into account, extreme fragility of the liquidity issues now being faced by thepetitioner concerned. The 3[rd] respondent may take a pro-active approachand may understand the fiscal and business problems now faced by thepetitioner assessee and may pass orders on the said rectificationapplication for the assessment year 2018-19 within 3 to 4 weeks from thedate of production of a certified copy of this judgment. This Court wouldobserve that ordinarily, such a time limit may be short for a decisionmaking process, but having regard to the above said crucial issues and alsothe fact that the petitioner has been waiting for refund for quiet a long timeand also taking into account, the extremely precarious nature of the cashliquidity issues now faced by the petitioner's business concern, it is hopedand expected that the 3[rd] respondent would rise to the occasion and wouldtake necessary steps to meet the said time deadline, in the interest ofjustice and fairness. 7.It is further ordered that in case, if the petitioner has a case thatany of the facts and figures mentioned herein above does not reflect thecorrect factual position, then certainly it is open to the petitioner to seekredressal of such grievances by filing appropriate representation before thecompetent authority concerned of the Income Tax Department, withoutany further delay, and if so filed, the said competent authority wouldexamine those grievances of the petitioner as well and render a considered decision thereon after affording reasonable opportunity of being heard to the petitioner. With these observations and directions, the above Writ Petition (Civil) stands finally disposed of. Nsd//true copy//PA to Judge Sd/- ALEXANDER THOMAS JUDGE APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1TRUE COPY OF THE RELEVANT PAGES OF INTIMATION U/S.143(1) DATED 30.03.2019 FOR THE A.Y.2017-18. EXHIBIT P2TRUE COPY OF TAX RETURN ACKNOWLEDGMENT FOR THE A.Y.2018-19.