New Delhi: If you filed your Income Tax Return (ITR) within the due date but could not complete e-Verification on time, this ruling could bring relief. The Delhi Income Tax Appellate Tribunal (ITAT) has said that a genuine tax refund cannot be withheld only because e-Verification was delayed, especially when the Income Tax Department has already accepted the delay.
What Was the Case About?
The case involved a taxpayer who filed his ITR for the assessment year 2015-16 within the prescribed deadline. After claiming eligible set-offs and deductions, his total tax liability became zero.
As tax had already been deducted at source (TDS), he was entitled to a refund of around Rs17.08 lakh. However, he failed to complete the mandatory e-Verification within the stipulated time.
Why Was the e-Verification Delayed?
The taxpayer explained that his 83-year-old father was seriously ill and required frequent hospital visits. Because of these exceptional circumstances, he could not complete the e-Verification process on time.
He later approached the Central Processing Centre (CPC) and requested condonation of the delay. The CPC accepted his explanation and approved the delayed e-Verification. After receiving the approval, he completed the verification process.
Why Was the Refund Still Denied?
Despite the delay being condoned and the return being successfully e-Verified, the taxpayer's refund was not issued.
He first sought rectification from the Income Tax Department, but his request was rejected. He then challenged the decision before the Delhi ITAT.
What Did the ITAT Say?
After examining the records, the Tribunal ruled in favour of the taxpayer. It observed that once the CPC had already condoned the delay in e-Verification, the department could not use the same reason to deny the refund.
The ITAT also noted that the taxpayer's TDS had already been credited to the government and was fully reflected in the department's records. Moreover, there was no outstanding tax liability against him.
Tribunal Cites the Constitution
The Tribunal also referred to Article 265 of the Constitution of India, which states that tax can be collected or retained only under the authority of law.
It held that if no tax is legally payable, the government cannot retain a taxpayer's money merely because of a technical lapse after the delay has already been condoned.
What Does This Mean for Taxpayers?
The ruling does not mean that every delayed e-Verification will automatically result in a refund. The decision is based on the specific facts of this case.
The taxpayer had filed the ITR within the due date, the CPC had officially condoned the delay in e-Verification, the TDS records were available with the department, and there was no outstanding tax liability.
Taxpayers should always complete e-Verification as soon as possible after filing their ITR to avoid delays. If genuine circumstances prevent timely verification, they should immediately apply to the CPC for condonation of delay. If the request is accepted, this ITAT ruling could strengthen their claim for a legitimate tax refund.
