High Court (India)

October 17, 2019

Bombay High Court Directs Income Tax Department To Release Tax Refund Of Over 224 Crore To Vodafone Idea

[ By Bobby Anthony ]


The Bombay High Court has directed the Income Tax Department to release a tax refund worth more than Rs 224 crore which is due to Vodafone Idea Limited with statutory interest.

The order was passed while disposing of a plea by Vodafone seeking directions to the Income Tax (IT) Commissioner to refund the Tax Deducted at Source (TDS) for assessment year 2015-16.

Earlier in February this year, the IT authorities had communicated that Vodafone was owed nearly Rs 224.28 crore as refund after a scrutiny of its income tax returns for assessment year 2015-16 under Section 143 (3) of the Income Tax Act, 1961.

However, the payment was not made despite several representations by Vodafone to the IT authorities who cited various reasons for non-payment of refund over time, including pending demands for other assessment years as well as a TDS mismatch.

After Vodafone moved the Bombay High Court, the the IT department cited glitches in its computer system at its Central Processing Centre (CPC) as a reason why the refund amount was not released.

However, the court stated that computer system glitches cannot override the correct legal position, which is that Vodafone must receive the income tax refund.

The court directed the IT department to resolve the larger issue and ensure that such disputes arising out of technical glitches do not come before the court.

It may be recalled that on September 4 this year, the court had also directed the IT department to release a refund of Rs 43 crore with interest for assessment years 2007-08 to 2013-14 to Vodafone Idea Limited. The refund had been withheld for a pending demand of Rs 49 lakhs.

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