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Bombay HC directs I-T dept to refund Rs 1,128 crore to VIL

 In a relief to the telecom service provider Vodafone Idea (VIL), the Bombay HC on Thursday directed the Income Tax department to refund `1,128 crore to the telco paid by the company in 2016-2017.  

The order came after a petition filed by VIL claiming the I-T department failed to refund the amount paid by it for the assessment year 2016-2017.  The company in its petition claimed the excess of the legitimate tax due on its income and the department had failed to refund it. A division bench of Justices K R Shriram and Neela Gokhale 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.

The HC took a strong view of the fact that the assessment order was passed two years after the direction of Dispute Resolution Panel (DRP), and said the assessment order be quashed. It said the move caused a huge loss to the exchequer and public. The bench ruled that a detailed enquiry be initiated on part of the assessing officer concerned to act in accordance with provisions of the Income Tax Act. 

“Strict action should be taken against persons responsible for the laxity and lethargy displayed which has caused a huge loss to the exchequer and in turn to the citizens of this country,” said HC. Sandeep Sehgal, Partner- Tax, AKM Global, a tax and consulting firm said the judgment emphasises that DRP provisions are mandatory in nature and are to be complied by the tax officer. It serves as an important directive to the tax department that the department should bear the brunt of its indoor mismanagement.

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