The Supreme Court on Monday (20.01.2025) upheld a Bombay High Court order directing the Income Tax Department to refund Rs. 1,128 crore to Vodafone Idea Limited along with interest of Rs. 500 crore. This brings the total refund to Rs. 1,600 crore.
According to Business Standard, the Supreme Court bench of Justices JB Pardiwala and R Mahadevan dismissed the Revenue Department’s special leave petition (SLP) challenging the High Court’s order. The apex court cited a delay of 295 days in filing the petition, which it said was not satisfactorily explained by the department.
The dispute arose from a refund claim by Vodafone Idea for the assessment year 2016-2017. The Bombay High Court, in its November 2023 judgment, ruled in favor of Vodafone Idea, stating that the Income Tax Department had failed to issue its final order within the mandated time limit under the Income Tax Act. As a result, the assessment order issued in August 2023 was deemed time-barred.
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The High Court led by Justices KR Shriram and Neela Gokhale directed the Income Tax department to refund Rs. 1,128 crore to Vodafone Idea along with interest. The court criticized the negligence of the assessing officer for failing to adhere to deadlines, which it said caused huge harm to the public exchequer.
“The case of Vodafone was elementary, and we are constrained to observe the complete apathy and negligent approach of the assessing officer in discharging his duties under the Income Tax Act. Such dereliction affects the exchequer and has far-reaching consequences on the nation’s economic stability,” the High Court observed in its judgment.
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The Supreme Court refused to entertain the Revenue Department’s appeal against the High Court’s decision, stating that there was no valid reason for the delay in filing the SLP. The bench remarked that government agencies must adhere to statutory timelines and cannot expect the judiciary to condone undue delays without valid justification.
Vodafone Idea was represented by Senior Advocate Sachit Jolly and Advocate Soumya Singh, who argued that the company was entitled to a refund due to the Income Tax Department’s failure to meet its obligations. The company pointed out that the assessing officer did not pass the final order within the stipulated 30 days as required under Section 144C(13) of the Income Tax Act.
Thus, the Supreme Court dismissed the revenue’s Special Leave Petition (SLP) and upheld Bombay High Court’s decision.
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