Bombay HC Pulls Up I-T Dept, Orders Tax Refund Of Rs 1,128 Crore To Vodafone Idea; Vi Shares Rise 2.49%

According to an  assessment order passed by the I-T department in August this year, the Bombay HC in its judgment said this was "time barred and hence cannot be sustained"

Shares of Vi were trading at Rs 13.98 apiece, up 2.49 per cent on the BSE on Thursday.

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In a major relief to Vodafone Idea Limited (VIL), the Bombay High Court (HC) has directed the Income Tax (I-T) department to refund Rs 1,128 crore to VIL paid by the telco in taxes for the assessment year 2016-2017, the PTI reported on Thursday. According to an  assessment order passed by the I-T department in August this year, the HC in its judgment said this was "time barred and hence cannot be sustained".

According to the report, the court passed its judgment on a petition filed by the VIL claiming the I-T department failed to refund the amount paid by it for the assessment year 2016-2017 which, it said, was in excess of the legitimate tax due on its income. A division bench of Justices K R Shriram and Neela Gokhale also 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 and thus causing a huge loss to the exchequer and public.

The bench in its order noted the case of Vodafone was "quite elementary" and that it was "constrained to observe the complete apathy and negligent approach of the assessing officer concerned in discharging his duties" in accordance with provisions of the Income Tax Act. "Any dereliction and remissness on the part of the officers entrusted with a duty to act within the strict contours of law affects the exchequer and has far reaching consequences on the prosperity and economic stability of the nation," the order said.

Laxity in this regard has a propensity to destroy and bring to naught any effective system put in place by the government for efficient and transparent administration of taxation laws and its regulations, it added.

The court recommended a detailed enquiry to be initiated on the failure 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," the HC said, directing for its order copy to be circulated to the Union Ministry of Finance.

Shares of Vi were trading up following the high court verdict. At 1.35 pm, Vi stocks were trading at Rs 13.98 apiece, up 2.49 per cent on the BSE on Thursday.