On delay of the Income Tax department’s to comply with the assessee’s refund request, the Bombay High Court ( HC ) directed to issue an additional refund.
The petition was filed by the legal heir of the Late Mr Lakhpatrai Agarwal and challenged the inaction on the part of the respondents, in complying with the direction and order dated 18th February 2010 passed by the Income Tax Appellate Tribunal (ITAT) by not completing the assessment in time as per the provisions of the Income Tax Act, 1961 and consequently not issuing the refund and the jewellery seized in the course to the petitioner.
During the search, jewellery about the petitioner was seized and the petitioner’s father stated under Section 132(4) of the Act admitting to undisclosed income to the tune of Rs. 28,04,308/-.
A notice under Section 158BC of the Act was issued and served upon the assessee calling upon him to file his income tax return. Upon receipt of the notice, the petitioner’s father filed his return of income for the block period 1st April 1996 to 13th August 2002 declaring an undisclosed income amount of Rs.28,04,308/- in form of Fixed Deposit Receipts (“FDRs”) (Rs. 20,00,000/- being the principal amount and Rs. 8,04,308/- being the interest portion).
The respondents undertook correspondence with the bank manager to ascertain the full particulars of the FDRs involving the petitioner’s father and the Bank Manager and furnished the requisite data. On 29th December 2004, the block assessment order under Section 158BC(c) of the Act was passed assessing Rs. 52,82,278/- as against the declared return of income of Rs. 28,04,308/-.
The Commissioner of Income Tax (Appeals) (CIT(A)) confirmed the additions made by the AO in the block assessment order. The ITAT, partly allowed the appeal citing violations of principles of natural justice on the ground that the petitioner ought to have been allowed to cross-examine the statement made by the bank manager or DRAFT rebut the claims made by him with evidence.
The respondent contended that they have not received the order dated 18th February 2010. Section 254 (3) itself provides for ITAT to send a copy of the order to both the assessee and the Commissioner; therefore, the onus would lie on the respondent to prove that they had not received the said order.
A two-member bench comprising Justice Dhiraj Singh Thakur and Justice Kamal Khata observed that the respondent failed to take steps to comply with the order dated 18th February 2010 and even within 9 months after receipt of the letter addressed by the Petitioner on 6th March 2018.
The Court directed the respondents to issue a refund of ₹ 7,39,083/- plus additional interest (under section 244A of the Act) till the date of payment to the Petitioner and to release the jewellery seized within two weeks from the date of this order.
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