M/S MANYATA PROMOTERS PRIVATE LIMITED V. THE DEPUTY COMMISSIONER OF INCOME TAX

WP/4829/2022

AI Insights

The case revolves around a writ petition filed by M/s Manyata Promoters Private Limited against various income tax authorities, seeking a refund of TDS credit amounting to INR 30,71,87,125/- for the assessment year 2019-20. The petitioner argued that despite having offered income in previous years and having the corresponding TDS deducted, the credit for this TDS was not reflected due to automation issues in the tax department's processing system. The respondents did not contest the petitioner's entitlement to the TDS credit but cited functional disabilities in their automated systems as the reason for the delay. The court, acknowledging the procedural shortcomings of the respondents, ruled in favor of the petitioner.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 754170 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 24-03-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: T SURYANARAYANA RAO
• Keywords: Assessment Year; Income Tax; Refund; TDS credit; Automated process
• Section: 199

Judgement Text

"IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24TH DAY OF MARCH 2022 BEFORE THE HON’BLE MR. JUSTICE B. M. SHYAM PRASAD WRIT PETITION NO. 4829/2022 (T-IT) BETWEEN : M/S MANYATA PROMOTERS PRIVATE LIMITED (ERSTWHILE EMBASSY OFFICE PARKS PRIVATE LIMITED) EMBASSY GOLFINKS BUSINESS PARK ROYAL OAKS OFF INTERMEDIATE RING ROAD BENGALURU – 560 071 REPRESENTED BY LATE VISHNOI AGED 35 YEARS. ... PETITIONER (BY SRI.T. SURYANARAYANA RAO, SENIOR COUNSEL FOR SRI MAHESH CHOWDHERY, ADVOCATE) AND : 1. THE DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, CENTRAL CIRCLE 1 (3) CENTRAL REVENUE BUILDING QUEENS ROAD BENGALURU – 560 001. 2. THE PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL REVENUE BUILDING QUEENS ROAD BENGALURU – 560 001. 3. THE CENTRAL BOARD OF DIRECT TAXES MINISTRY OF FINANCE, NEW DELHI -110 001. 2 4. THE DIRECTORATE GENERAL OF INCOME TAX (SYSTEMS) CENTRAL BOARD OF DIRECT TAXES MINISTRY OF FINANCE NEW DELHI – 110 001. ... RESPONDENTS (BY SRI.E.I. SANMATHI, ADVOCATE) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE RESPONDENTS TO FORTHWITH REFUND THE TDS CREDIT AMOUNTING TO INR 30,71,87,125/- DUE TO THE PETITIONER, ALONG WITH APPLICABLE INTEREST. THIS WRIT PETITION COMING ON FOR ORDERS, THIS DAY, THE COURT MADE THE FOLLOWING: ORDER The petitioner has sought for the following reliefs: a) Direct the Respondents to forthwith refund the TDS credit amounting to INR 30,71,87,125/- due to the petitioner along with applicable interest. b) In the alternative, grant credit of the TDS amounting to INR 30,71,87,125/- in the earlier Assessment Years viz., 3 AYs 2016-17, 2017-18 and 2018-19 and direct granting of refund, when the corresponding income was offered to tax”. Sri T.Suryanarayana, learned Senior Counsel for the petitioner, submits that the petitioner’s entitlement for TDS credit as claimed in the returns for the assessment year 2019-20 pursuant to Form-26AS cannot be denied in view of the provisions of Section 199 of the Income Tax Act, 1961 (for short, ‘IT Act’) and in fact, it is not denied by the impugned order, however it is stated that the TDS credit cannot be allowed because the functionality in the automated process does not enable transfer of TDS. In elaboration, Sri T.Suryanarayana submits that the petitioner, which files returns on the actual basis, offered income during the assessment years preceding the assessment year 2019-20 but there were no actual 4 receipts. The actual receipts from the concerned are in the assessment year 2019-20 with necessary TDS credited to the petitioner. The petitioner who has offered income earlier would be entitled to TDS credit with the payment and TDS affected by the payer. The procedural difficulties because of the automation cannot be a reason to deny credit that would otherwise be available to the petitioner. Sri E.I.Sanmathi, learned counsel for the respondents, is unable to controvert essential submissions on behalf of the petitioner viz., that the petitioner’s request for rectification is rejected not because there is denial of the petitioner’s entitlement to the TDS credit returns but because of a functional disability in the automated process. This Court is persuaded to opine that with the authorities not disputing the petitioner’s entitlement to TDS credit, the petitioner is entitled for refund by 30.4.2022. 5 Therefore, the petition is allowed declaring that the petitioner is entitled for TDS credit amount to Rs.30,71,87,125/- in the assessment year 2019-20 and directing the respondents to take necessary action to ensure that benefit of such refund is available to the petitioner for the assessment year 2019-20 within a period of eight (8) weeks from the date of receipt of a certified copy of this order. SD/- JUDGE SA/- Ct:sr "