ITR Refund: If you filed your ITR on time but e-verification was delayed, you still have no hope of receiving a refund. The Delhi ITAT has provided relief to taxpayers in an important decision. Find out when you can receive a refund despite the delay.
ITR Refund: Many taxpayers file their Income Tax Return (ITR) on time but delay e-verification. Refunds can still be obtained, but there are certain conditions. The Income Tax Department must condone the delay in e-verification.
Recently, the Delhi Income Tax Appellate Tribunal (ITAT) issued a significant ruling in favor of taxpayers. The tribunal stated that if the Central Processing Center (CPC) has already condoned the delay, a refund cannot be withheld solely on this technicality.
The ITAT held that withholding money from a taxpayer who does not owe any tax would be against Article 265 of the Constitution, which states that no tax can be levied or collected except under the law.
What was the whole matter after all?
This case pertains to a Delhi taxpayer who had filed his ITR on time under section 139(1) for the assessment year 2015-16 on September 3, 2015.
He took set-offs for current year losses, unabsorbed depreciation, and losses from previous years. Consequently, his taxable income was nil. The taxpayer also claimed a refund of approximately ₹17.08 lakh, primarily for TDS deducted on rental income. However, he failed to e-verify his ITR within the stipulated time.
The taxpayer told the tribunal that his 83-year-old father was seriously ill and had to be frequently taken to the hospital. Consequently, the e-verification could not be completed on time. He subsequently filed an application with the Central Public Accounts Commission (CPC) seeking condonation of the delay. The CPC accepted the application. Subsequently, the e-verification of the ITR was completed on February 16, 2018. Despite this, the Income Tax Department did not process the return under Section 143(1). The refund was also not issued.
The taxpayer then filed a rectification application under Section 154. However, the assessing officer rejected it. The first appellate authority subsequently upheld the same decision. Subsequently, the taxpayer approached the ITAT.
What did ITAT say?
The Delhi ITAT allowed the taxpayer’s appeal. The tribunal stated that there was no dispute that TDS had been deducted on the rental income. The Income Tax Department also had records of this. The ITAT stated that the CPC had already condoned the delay in e-verification. Therefore, the Income Tax Department could not withhold the refund on that basis.
The tribunal also said that withholding money from a taxpayer when he does not owe any tax would amount to unjust enrichment by the government.
The ITAT also cited Article 265 of the Constitution. The tribunal stated that no tax can be levied without the permission of law. Withholding TDS on a mere technicality violates this constitutional principle.
On this basis, the ITAT set aside the lower authority’s order and directed the Assessing Officer and the CPC to take necessary steps to issue the refund in accordance with law.
What does this decision mean?
The ITAT clarified that in this case, the refund cannot be withheld merely because the e-verification of the ITR was done after the due date. Importantly, the CPC had already condoned that delay.
The tribunal also held that the TDS amount was present in the department’s records. After setting off the loss, the taxpayer did not owe any tax.
The ITAT held that withholding refunds on the same technical grounds after the delay has been condoned is wrong. Doing so would amount to undue advantage to the government. It is also against the spirit of Article 265 of the Constitution.
However, the tribunal clarified that its decision was based on the facts of this case. Here, the taxpayer had filed the ITR on time. Furthermore, the CPC had already condoned the delay in e-verification.
The post ITR Refund: Refund will be given even if there is delay in e-verification, big relief to taxpayers due to ITAT’s decision first appeared on informalnewz.
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