Bombay HC Directs Income Tax Department To Expedite 27 Vodafone Idea Tax Cases, Extends Protection On ₹699.54-Crore Refund

Mumbai, October 15, 2026: The Bombay High Court has directed the Income Tax Department to expedite pending orders giving effect to appellate decisions in 27 tax matters involving Vodafone Idea Ltd and its group entities, while extending protection against recovery of a disputed Rs 699.54 crore refund paid to the telecom company.

A bench of Justices BP Colabawalla and Farhan Dubash issued the directions while hearing a petition filed by Vodafone Idea. The court directed the department to pass orders in 13 matters within six weeks, while asking it to complete the other pending matters within specified timelines.

Dispute Over Rs 699.54-Crore Refund

The dispute over the refund arose after Rs 699.54 crore was electronically credited to Vodafone Idea’s State Bank of India account by the Central Processing Centre on September 15, 2026.

The Revenue sought to recover the amount, claiming that the Assessing Officer had recorded satisfaction under Section 245(2) of the Income Tax Act and obtained approval from the Principal Commissioner to withhold the refund.

Although the Assessing Officer had emailed the intimation to the Central Processing Centre on September 9, the amount was released. The department subsequently termed the payment erroneous and initiated recovery proceedings.

During earlier hearings, the High Court allowed Vodafone Idea to amend its petition to challenge the withholding letters and directed that the refund be kept in a fixed deposit with SBI without being used.

Court Sets Timelines For Pending Tax Matters

During the latest hearing, the Revenue submitted an affidavit outlining a roadmap for processing pending appeal-effect matters, divided into three groups based on the amounts involved and applicable limitation periods.

Group A comprises 13 matters involving Rs 113.77 crore, in which the statutory time limit for passing orders has already expired. The court directed the department to pass the orders within six weeks.

It clarified that the direction would not affect Vodafone Idea’s contention that the expiry of the limitation period entitles it to refunds based on its returned income, relying on Supreme Court precedent.

Group B includes 10 matters involving Rs 1,423.81 crore, with limitation periods extending up to March 31, 2027. The court directed the department to complete these matters expeditiously, preferably by December 31, 2026, and no later than January 31, 2027. This group includes the assessment year linked to the disputed Rs 699.54 crore refund.

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Group C covers four matters involving Rs 2,782.13 crore, with limitation deadlines extending up to March 31, 2028. The court directed the authorities to begin verification and process these matters expeditiously.

Interim Protection Extended

The bench extended the interim protection against recovery of the Rs 699.54 crore refund until further orders. The matter will be heard next on November 2, 2026.

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