Not releasing the refund of income tax for the reason of technical glitch in the system is not tenable.

  • Vide Decision of High Court of Bombay in Vodafone Idea Limited Vs. Commissioner of Income-tax

Facts of the Case:

  1. This petition is filed for a direction to the respondents-the Income Tax authorities to refund an amount of Rs.149,98,21,407/- with statutory interest.
  2. The petitioner is a public limited company and is engaged in providing telecommunication services. For the period relevant to assessment year 2014-15, the petitioner had suffered sizable deduction of tax at source, at the hands of payees, which was in excess of Rs.204/- crores. The return filed by the assessee for the said assessment year 2014-15 was scrutinized under Section 143(3) of the Income Tax Act, 1961 (the Act for short). The assessment order dated 29.11.2018 gave rise to a refund of the said sum of Rs.149,98,21,407/-.
  3. Since the refund was not forthcoming, the petitioner wrote several letters to the department. At one stage, the department had raised the issue of pending demands for other assessment years. The petitioner clarified the position in this respect under a communication dated 14.12.2018, upon which, it appears that the department did not pursue this line any further.
  4. Few more letters from the petitioner followed without department releasing the refund. In one such e-mail correspondence dated 31.8.2019, the petitioner pointed out that several meetings had taken place with the Income Tax authority without resolution of the issues. The TDS mismatch of as small as Rs.1/- (on account of rounding off of the figure) was cited more than once for not releasing the refund. Eventually, the petitioner filed the present petition for the above noted prayer.
  5. Learned council for the Department candidly stated that the petitioner’s refund claim has not been released on account of computer glitch at the central processing center presumably on account of the fact that though the concerned demands are stayed by the appellate authority, the system is not accepting such position. He, therefore, submitted that the auto generation of refund could not be made because of this reason.


The Honorable High Court of Bombay held the case as follows:

  1. The computer system and auto generation or any difficulty in doing so in a particular case, cannot override the correct legal position.
  2. In the present case, the correct legal position is that the petitioner must receive the refund.
  3. Whatever the technical difficulties in releasing the refund, the department must sort it out. If for some reason of technical glitch the system in the present case fails to permit the payment of refund, the concerned authorized officer must manually do so.
  4. Therefore it directs the respondents to release the petitioner’s refund amount of Rs. 149,98,21,407/- with statutory interest, which shall be done within a period of two weeks from the date of receipt of this order.

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