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2020 (3) TMI 968 - HC - Income TaxRefund withheld u/s 241A - procedure for refund and withholding of refund - without the conditions mentioned therein being fulfilled - HELD THAT:- We have perused the record, no reasons apart from one mentioned in the order are there. The note of approval of the Princial Commissioner was also perused by us, the only reason mentioned was that there was an amount outstanding of ₹ 5 crores odd against the petitioner and for the said reason, the refund is withheld. Petitioner disputed the fact and submitted that the said demand was set aside. Be that as it may, the pendency of demand of ₹ 5 crores cannot be a ground for withholding almost refund of ₹ 300 crores, as per Section 245, the due amount could be set off against the refund due. In the absence of any material and reason for forming opinion that refund is likely to adversely affect the revenue withholding cannot be sustained. Learned counsel for the petitioner relied upon various citations relating to Section 143(1D) but the same would have no direct application in the case in hand as the grievance is against order under Section 241A of the Act. It would be further pertinent to note here that there is no dispute raised by the respondents that as on date refunds are due to the petitioner as per communication of processing of return under Section 143(1). Respondents have not disputed that in the return filed by the petitioner for the assessment year 2019-20, the total income declared is more than ₹ 550 crores and refund of more than ₹ 183 crores has been claimed. It cannot be lost sight of that the revenue is not in a position to deny that the petitioner is running its business, the returns being filed are of almost more than ₹ 200 crores, there are no arrears of tax relating to any assessment year and the refund is being claimed every year. There is no allegation that the tax is not being paid or there is any irregularity in filing the returns. The contention of the respondents to remit the matter back is not found worth acceptance as in the present case, there are no reasons even in the record to support the finding that refund would adversely affect the revenue and the note in approval file that there was demand of ₹ 5 crores pending has been found not good enough to withhold the refund of more than ₹ 300 crores. Even the officials present in Court were not in a position to cite any material or reason with regard to adverse affect of refund on revenue, it would be an exercise in futility to give another opportunity. In view of the above, writ petition is allowed. The impugned order is quashed. The respondents are directed to issue refund for the assessment year 2017-18 and 2018-19 along with statutory interest not later than within four weeks from receipt of certified copy.
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