HC orders tax refund of ₹1,128 cr to Vodafone Idea; pulls up I-T dept for laxity and lethargy

HC orders IT dept to refund Rs 1,128 cr to Vodafone Idea for taxes paid in 2016-17. Bench notes laxity of assessing officer in not passing order within 30 days, causing loss to exchequer. HC recommends enquiry and strict action against persons responsible for laxity. Court holds assessment order time-barred and directs refund with interest.

The Bombay High Court has directed the Income Tax department to refund ₹1,128 crore to Vodafone Idea Limited paid by the telecom operator in taxes for the assessment year 2016-2017.

The assessment order passed by the department in August this year was “time barred and hence cannot be sustained, "the HC noted in its judgement on Wednesday.

A division bench of Justices K.R. Shriram and Neela Gokhale also took a strong view against the assessing officer for showing “laxity and lethargy” in not passing the final order within the mandated 30-day time and thus causing a huge loss to the exchequer and public.

The court passed its judgment on a petition filed by the Vodafone Idea Limited claiming the I-T department failed to refund the amount paid by it for the assessment year 2016-2017 which, it said, was in excess of the legitimate tax due on its income.

The bench in its order noted the case of Vodafone was “quite elementary” and that it was “constrained to observe the complete apathy and negligent approach of the assessing officer concerned in discharging his duties” in accordance with provisions of the Income Tax Act.

“Any dereliction and remissness on the part of the officers entrusted with a duty to act within the strict contours of law affects the exchequer and has far reaching consequences on the prosperity and economic stability of the nation,” the order said.

Laxity in this regard has a propensity to destroy and bring to naught any effective system put in place by the government for efficient and transparent administration of taxation laws and its regulations, it added.