The Delhi High Court, in a major relief to LG, has directed the Central Processing Center to determine and process the Income Tax Refund due to LG Electronics in accordance with the law after the later filed a rectification application under Section 154 of the Income Tax Act, 1961.
Earlier, LG had opted to be taxed under Section 115BAA of the Income Tax Act, attracting a tax rate of 22%, yet the revenue authorities applied a tax rate of 25% under Section 115BA of the Income Tax Act. LG filed a writ petition in the High Court, challenging the intimation issued under Section 143(1) of the Act as well as seeking a direction to the revenue authorities to dispose of its rectification application under Section 154 of the Act seeking rectification of the impugned intimation.
Sections 115BA and 115BAA give an option to an assessee, being a domestic company, to be governed by either of the said provisions, attracting a tax rate of 25% or 22 % respectively, on satisfying certain conditions under the said provisions. Section 154 gives the specified income tax authority the power to amend any order passed by it under the Act or any intimation issued under Section 143(1) of the Income Tax Act in order to rectify any mistake apparent from the record.
Before the High Court, the Revenue contended that though the rectification of intimation under Section 143(1) has been carried out, due to some technical reasons the accounting of rectification order under Section 154 could not be completed at the Central Processing Center (CPC). The court directed the CPC to determine and process the refund due to LG in accordance with the law.
A two-judge bench consisting of Justice Manmohan and Justice Navin Chawlahas held that “due to some technical reasons the accounting of order under Section 154 could not be completed on 24th February, 2022 and the same may get completed by 25th February, 2022. The demand raised in intimation under Section 143(1) for Assessment Year 2020-21 has been cancelled and once the accounting of rectification order is completed at CPC, refund due will be determined.In view of the aforesaid development, the CPC is directed to determine and process the refund in accordance with law.”
M/S. LG ELECTRONICS INDIA PRIVATE LIMITED vs DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE 13 (1) AND OTHERS
CITATION: 2022 TAXSCAN (HC) 134
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