Why Should Delay Interest Not Be Recovered From Your Salary? : Delhi High Court To AO Over 4-Year Delay In Tax Refund

The Delhi High Court on Tuesday (July 28) directed an Assessing Officer to personally explain the four-year delay in taking steps to release over ₹15 crore due to Clix Capital Services Pvt. Ltd.

A Division Bench of Justices Dinesh Mehta and Rajneesh Kumar Gupta directed the officer involved to personally appear before the Court and show cause why the interest payable for the delay should not be recovered from his salary.

Petitioner-company submitted that the Assessing Officer had passed an order under Sections 254/250/143(1) of the Income Tax Act on February 25, 2022, recording that the necessary forms and challans would be issued. However, despite the passage of more than four years, no further steps had been taken.

Petitioner had also placed on record at least 20 email representations sent to the authorities and submitted that due to the Department's "indolent approach", working capital of more than ₹15 crore remained blocked with the Revenue for four years.

Taking note of the submissions, the Bench directed the concerned AO to remain present on the next date of hearing along with an affidavit explaining the inordinate delay.

The Court further directed the officer to show cause "why the interest payable on this amount for the delay be not recovered from his salary?"

The matter has been listed for further hearing on August 21.

For Petitioner: Senior Advocate Sachit Jolly with Advocates Sherry Goyal, Viyushti Rawat and Subham Gupta.

For Respondent: Senior Standing Counsel Indruj Singh Rai with Junior Standing Counsels Sanjeev Menon, Rahul Singh and Priya Sarkar.