Delhi High Court Directs Income Tax Dept. To Decide The Rectification Applications Filed By Jones LNG Lasalle

The division bench of Justice Manmohan and Justice Preetam Singh Arora has directed that if any refund is due and payable to the petitioner, it shall be refunded within eight weeks.

The petitioner/assessee is in the business of real estate consultancy and advisory services; brokerage; project management; design and construction of office interiors; integrated facility management; and shared service office services. The petitioner was issued a notice dated 10th February, 2022 under Section 226 of the Act seeking to recover outstanding demand for the assessment years 2009-10, 2010-11, 2011-12, 2012-13, 2014-15, 2015-16, 2017-18, & 2018-19 aggregating to Rs. 3,55,89,80,829. The petitioner replied to the notice, explaining to the authorities that the demands raised were incorrect, and the petitioner has filed various letters since 2019 seeking the deletion of the erroneous outstanding tax demand and release of the consequential refund.

The petitioner stated that the petitioner has filed an application under Section 197 seeking a withholding certificate at a lower tax rate of 1.74%. The application was rejected on the ground that a demand of Rs. 322,33,71,079 was outstanding on the petitioner's PAN. The respondents in the order itself have observed that the pending demands are likely to be reduced to NIL if the petitioner's rectification applications are processed. The incorrect outstanding demand has been consistently appearing on the department's portal even after numerous representations and applications filed by the petitioner. As the rectification applications filed by the petitioner remain undecided, the petitioner has been denied a refund of INR 92,360,000,00 (excluding interest), which has resulted in an unforeseen situation where the petitioner was forced to bear the brunt of the department's laxity and casual attitude.

The petitioner stated that since 2019, the petitioner has addressed multiple reminders and representations to the authorities seeking disposal of the rectification applications filed by the petitioner. However, the applications are still pending. The department is trying to take advantage of its own laches and if the correct effect is given to the pending application, huge refunds will be due and payable to the petitioner.

The court noted that a number of rectification applications of the assessee are pending and, once they are decided, the demand against the assessee is likely to be reduced to NIL. The basis for rejection of the application filed by the petitioner under Section 197 of the Income Tax Act is self-contradictory.

Case Title: Jones LNG Lasalle Property Consultants Versus DCIT

Citation: W.P.(C) 10908/2022 & C.M.No.31782/2022

Dated: 21.07.2022

Counsel For Appellant: Advocates Deepak Chopra with Harpreet Singh Ajmani and Ankul Goayl

Counsel For Respondent: Sr.Standing Counsel Ajit Sharma

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