TDS Refund cannot be Indefinitely Delayed after Success in Appeal: Jharkhand HC Orders Time-Bound Action by Income Tax Authorities [Read Order]
The Bench clarified that if the Department proposes to adjust any alleged dues against the refund, the petitioner must be afforded an opportunity of hearing.
The Jharkhand High Court has held that refund of TDS ( Tax deduction at Source) cannot be indefinitely delayed once an assessee succeeds in appeal. The court directed the Income Tax authorities to resolve the matter before 30th April 2026.
A writ petition was filed by M/s Kashish Developers Limited seeking implementation of an appellate order and consequential refund arising out of TDS assessment for Financial Year 2017-18.
The petitioner submitted that despite succeeding before the Commissioner of IncomeTax (Appeals) by order dated 28 July 2021, the Department had failed to pass a consequential revised assessment or rectification order and release the resultant refund.
During the pendency of the writ, the Department passed an order dated 19 January 2026 giving effect to the appellate order. The respondent said to the court that the order dated 19.01.2026 was made manually and therefore, it was not possible to give automatic effect by way of refunds etc.
The Department also submitted that the petitioner has certain outstanding dues pending. The same may require verification and possible adjustment before releasing the refund.
It was further submitted that if the petitioner submits a physical application for refund/implementation, the same would be considered expeditiously in accordance with law.
The Division Bench comprising Chief Justice M.S. Sonak and Justice Rajesh Shankar permitted the petitioner to file a physical application seeking refund or implementation of the order dated 19 January 2026.
The Bench further clarified that if the Department proposes to adjust any alleged dues against the refund, the petitioner must be afforded an opportunity of hearing.
The court said that “All these exercises must be completed before 30th April 2026 because if the petitioner, who has succeeded in appeal, is entitled to refunds, then, the same should not be unnecessarily delayed.”
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