In a recent decision, the Allahabad High Court held that taxpayers cannot be left at the mercy of an Assessing Officer who delays payment of refunds that are genuinely due. The bench, comprising Justice Shekhar B. Saraf and Justice Prashant Kumar, delivered the ruling in a writ petition concerning a claim for a Tax Deducted at Source (TDS) refund. The petitioner, a cooperative society exempt under Section 80P of the Income Tax Act, contended that despite submitting the required documentary proof, its refund request was not being processed because of a mismatch between its claimed figures and those in its Form 26AS. The assessing department resisted, arguing that the mismatch warranted rejection.
The Court emphatically rejected that defense, stating that when an assessee presents documents establishing that tax has been deducted, the Assessing Officer is obligated to process the refund and cannot unduly delay it. The Court clarified that the Officer cannot insist that the claimed amount must perfectly mirror the entries in Form 26AS; what matters is the proof furnished by the taxpayer, including documents like Form 16A. The Court reminded that the duty of verification lies with the revenue’s machinery, which must reconcile discrepancies by engaging with the deductor rather than penalizing the taxpayer.
The judgment emphasized that the revenue’s role is to verify and confirm the correctness of submitted claims and supporting documents. It cannot shift the burden onto the assessee to match external records or reject claims purely on procedural grounds. The Court observed that earlier precedents had held that differences between TDS claims and Form 26AS often stem from deductors’ failures, not the assessee’s fault. Consequently, the assessing authority must investigate those inconsistencies rather than penalizing or rejecting a taxpayer’s refund out of hand.
Further, the Court held that the petitioner’s claim for interest on the delayed refund was maintainable, since the delay was attributable solely to inaction on the part of the Income Tax Department. The Court directed that the refund be paid to the petitioner forthwith, along with applicable interest. Through this ruling, the Allahabad High Court reaffirmed that legitimate claims for refund cannot be stalled indefinitely by administrative inertia, and that taxpayers are entitled to timely redress when they satisfy their evidentiary burden.
0 Comments
Thank you for your response. It will help us to improve in the future.