Bombay HC Orders Tax Refund Of Rs 1,128 Cr To Vodafone Idea

Bombay High Court ordered the Income Tax department on Thursday to reimburse Rs 1,128 crore to Vodafone Idea, paid by the telecom operator during the assessment year 2016–2017.

In its ruling, the HC said that the assessment order issued by the department in August of this year was time-barred and therefore could not be upheld.

A division bench of Justices KR Shriram and Neela Gokhale also expressed strong opposition to the assessing officer’s actions, citing laxity and lethargy in failing to issue the final order within the allotted period of 30 days, resulting in significant financial losses for the public and exchequer.

The Vodafone Idea petitioned the court, arguing that the I-T department had not reimbursed it for the money it had paid for the assessment year 2016–2017, which exceeded the actual tax that was owed on its income. The court granted the petition.

In its ruling, the bench observed that the Vodafone case was fairly straightforward and that it was obliged to take into account the assessing officer’s total apathy and negligent actions in carrying out his duties in compliance with the Income Tax Act.

The order stated that any dereliction or remissness on the part of the officials tasked with upholding the strict contours and spirit of the law impacts the exchequer and has a major impact on the prosperity and economic stability of the country.

It further stated that any effective system established by the government for the transparent and efficient administration of tax laws and regulations has the propensity to be destroyed and rendered ineffective by laxity in this regard.

The court advised that a thorough investigation be started into the assessing officer’s alleged disregard for the Income Tax Act’s provisions.