LI Network
Published on: December 22, 2023 at 18:20 IST
The Karnataka High Court has directed the National Faceless Assessment Centre (NFAC) to refund Rs.29.30 crore along with interest under Section 244A of the Income Tax Act to Myntra Designs Pvt. Ltd.
Justice B. M. Shyam Prasad’s bench noted that if an investigation into transfer pricing is underway, the court would suffice to observe that Myntra should respond to any adjudication demand after due process. However, the court emphasized that the petitioner, Myntra, cannot be denied a refund in anticipation of a demand without recorded reasons.
Myntra, the petitioner/assessee, had sought directions for the expeditious issuance of a refund amounting to Rs.9,30,46,736, as computed under Refund Intimation, along with applicable interest under Section 244A of the Income Tax Act, 1961.
The petitioner argued that the refund was being withheld without due process and without recording an opinion, as required by Section 241A of the Income Tax Act.
The Court permitted the respondents to present the opinion recorded by the Assessing Officer and any permission granted by the concerned Principal Commissioner of Income Tax.
The department contended that the refund could be withheld due to a pending scrutiny assessment with the Transfer Pricing Officer (TPO).
The court, however, rejected this reasoning, emphasizing that withholding the refund in the manner considered by the Assistant Commissioner of Income Tax is unacceptable.
In its ruling, the court allowed the petition, instructing the respondents to refund Rs.29,30,46,736, along with interest as permissible by law, within a specified timeframe. This directive is without prejudice to any recovery demand that may arise at the conclusion of the ongoing proceedings.
Case titled “M/S Myntra Designs Private Limited versus National Faceless Assessment Centre” (Writ Petition No. 19995 Of 2023 (T-IT)).
