The Supreme Court has dismissed a Special Leave Petition (SLP) by the Income Tax Department in the refund matter of Vodafone Idea Limited. With this, the company is eligible to get a refund of ₹1600 crore.
“There is a gross delay of 295 days in filing the Special Leave Petition which has not been satisfactorily explained by the petitioners. 2 3. The Special Leave Petition is, accordingly, dismissed on the ground of delay,” a division bench of J.B. Pardiwala and R. Mahadevan. The SLP was filed against ruling by Bombay High Court.
Procedure says an SLP can be filed at the Supreme Court within 90 days from the date of judgement of a high court or within 60 days against the order of a high court refusing to grant the certificate of fitness for appeal to the Supreme Court.
According to Manish Garg, Lead (Transfer Pricing and Litigation), AKM Global, this case pertains to AY 2016-17, where Vodafone Idea Ltd (then Vodafone Ltd.) had claimed around ₹1,100 Crore tax refund in its income tax return. However, the refund claim was dismissed in scrutiny assessment on account of certain transfer pricing additions. Pursuant to that, Vodafone filed objections before DRP and DRP issued its directions in March 2021.
However, instead of 1 month, the tax department passed the final assessment order in September 2023, nearly after delay of more than 2 years. Vodafone filed a writ petition before the High Court to challenge the validity of final assessment order on account of breach of timeline stipulated under the provision of income tax law. The High Court had allowed the writ petition and ruled in favour of Vodafone. The High court ruled that the timeline for passing order stipulated under the income-tax provisions are to be interpreted strictly and also reprimanded officials involved for showing extreme lethargy and insincerity in this case. Aggrieved by this, the IT Department filed SLP in the Supreme Court.
“Earlier, the High Court, and now the Supreme Court, giving a decision in favour of Vodafone underscores the significance of assessment timelines provided under the income tax law and establishes a view that strict adherence to statutory timelines is non-negotiable. For the business community, this verdict brings much-needed assurance and certainty in following tax procedures. Further, the High Court’s proposed action against the officers for negligence will strengthen the accountability in the tax department,” Garg said. The Hindu BusinessLine