The Gujarat High Court has held that the interest is payable on refund under Direct Tax Vivad Se Vishwas Act 2020 (DTVSV Scheme) even in absence of the provision.
The bench of Justice Bhargav D. Karia and Justice D.N.Ray has observed that when the petitioner has opted for direct tax for Vivad se Vishwas Scheme 2020 and led the application which was approved by the designated authority and refund order is also passed as per the said scheme on 12/05/2022 by the Jurisdictional Assessing Officer, the petitioner was entitled to the interest on the amount of refund till the same was paid to the petitioner.
The Jurisdictional Assessing Officer passed and uploaded the manual order in the ITBA system on 12/05/2022 which was accounted on CPC 26/07/2022 with refund of Rs.2,20,41,042 and the refund was issued by the CPC and therefore nothing is pending before the Jurisdictional Assessing Officer.
The petitioner did not validate the bank account with the CPC as such the refund could not be paid to the petitioner. It was therefore submitted that no interest is payable to the petitioner up to the date when the account was validated by the system.
The department contended that as the petitioner validated the bank account on 03/09/2023 refund was released from CPC on 24/01/2024 and was credited in the bank account of the petitioner on 29/01/2024. The petitioner is not entitled to any interest on the refund amount either under the DTVSV Act, 2020 or under Section 244 of the Income Tax Act, 1961.
The assessee contended that the petitioner has been vigilant for refund which has arisen under the DTVSV Act, 2020, which is not in dispute as per the order giving effect dated 12/05/2022 passed by the Jurisdictional Assessing Officer.
The court without considering whether it is a fault on part of the petitioner to validate the bank account or whether any negligence on part of the respondents for not releasing the amount of refund, directed the respondents/department to pay the amount of interest at the rate of 6% per annum as per the calculation provided amounting to Rs.22,04,104 for twenty months from 01/06/2022 to 31/01/2024 considering the entire month on amount of Rs.2,20,41,042/- within a period of three months from the date of receipt of copy of this order.
Case Details
Case Title: M/S Sahil Total Infratech Pvt. Ltd. Versus Assistant Commissioner Of Income Tax Circle 2(1)(2), Surat & Ors.
Case No.: R/Special Civil Application No. 20804 Of 2023
Date: 24/02/2025
Counsel For Petitioner: Bhaumik Dholariya
Counsel For Respondent: Karan G Sanghani
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