High Court Awards 6% Interest on Delayed Tax Refund Under DTVSV Scheme
Case Overview
Assessee: Sahil Total Infratech (P.) Ltd.
Scheme: Direct Tax Vivad Se Vishwas (DTVSV) Scheme, 2020
Issue: Refund of ₹2.20 crores, approved on 12-05-2022, was delayed until 25-01-2024 despite multiple grievances.
Revenue’s Argument: Delay was due to the assessee’s failure to validate the bank account.
Assessee’s Claim: Entitled to interest on delayed refund.
Court’s Decision
Interest Entitlement: The assessee was granted 6% per annum interest on the delayed refund.
Period Considered: 01-06-2022 to 31-01-2024.
Amount Awarded: ₹22.04 lakhs, to be paid within three months.
Key Reasoning: Despite not qualifying under Section 244A of the Income-tax Act, the court applied equitable principles to ensure fairness.
Implications for Taxpayers
Precedent for Similar Cases: Taxpayers facing refund delays may claim interest based on equitable principles.
Importance of Timely Processing: The judgment reinforces accountability in refund processing under the DTVSV scheme.
Need for Proactive Action: Assessees should ensure bank validation to avoid disputes.
Conclusion
The Gujarat High Court’s decision highlights the importance of timely tax refunds and sets a precedent for interest compensation on unjustified delays.
