Delhi High Court Directs Disposal Of Nokia's Rectification Application Over Refund Of Rs. 58 Crores Within Six Weeks

Nokia filed a writ petition before the High Court seeking a direction to the revenue authorities to decide the rectification application filed by it under Section 154 of the Income Tax Act, 1961 and grant consequential refund along with the applicable interest under the Act. Nokia also sought a direction to the revenue authorities to refund over Rs. 58 Crores adjusted under Section 245 of the Act against the outstanding tax demand of the relevant assessment year.

The counsel for Nokia submits that the revenue department committed certain errors in granting credit and calculating interest under Section 234B and Section 244A of the Act. The counsel submitted that the rectification application dated July, 2021 filed by Nokia under Section 154 of the Act has not been decided by the revenue authorities till date and that the time limit to pass the rectification order in terms of Section 154(8) of the Act has expired on 31st January, 2022.

Section 154(1) of the Act gives power to the specified income tax authority to amend any order passed by it under the Act to rectify any mistake apparent from the record. Section 154(8) provides that an application for amendment under the section made by the assessee shall be disposed of by the income tax authority within a period of six months from the end of the month in which the application is received by it.

The Court observed that CBDT instruction No.2/2013 of 2013 (F. No. 225/76/2013/ITA.II) and a CBDT Letter of 2015 (F. No.225/148/2015- ITA-II) stipulate that the Assessing Officers must strictly follow the time limit of six months provided under Section 154(8) of the Act in disposing of the rectification applications. Additionally, the court observed that in the case of Nortel Networks India International Inc. versus ACIT (WPC 12236/2021) and Cheil India Private Limited versus DCIT (WPC 11683/2021), the court had given directions to the revenue authorities to dispose of similar rectification applications in a time bound manner.

The court allowed the writ petition, directing the revenue authorities to decide Nokia's rectification application filed under Section 154 of the Act within six weeks by way of a reasoned order. Also, the court directed that in the event of a refund, the same shall be granted to Nokia with the applicable interest within six weeks.

Case Title: Nokia India Private Limited Versus Assistant Commissioner Of Income Tax

Citation: 2022 LiveLaw (Del) 155

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