In a partial relief to Vodafone Idea, the Supreme Court on Wednesday directed the Income Tax department to refund Rs 733 crore within four weeks. Vodafone Idea, formerly known as Vodafone Mobile Services, had appealed for tax refund of Rs 4,759.07 crore for assessment year (AY) 2014-15, 2015-16, 2016-17 and 2017-18.
The telecom company had earlier moved the Delhi supreme court alleging that there was complete inaction on a part of I-T department in processing its ITRs and in issuing appropriate refund to it.
The bench also directed the Tax department to conclude as early as possible the proceedings concerning the demand of refund of the telecom firm and therefore the scrutiny of income by the IT department with reference to assessment years 2016-17 and 2017-18.
“Since the immediate action is not even initiated, we say nothing in that respect. In the premises, we direct that the quantity of Rs.733 Crores shall be refunded to the telecom firm within four weeks from today subject to any proceedings that the Revenue may deem appropriate to initiate in accordance with law,” the highest court said.
Its contested total refund, amounting to Rs 4,759 crore, will help pay at least a part of its statutory dues worth more than Rs 58,000 crore or meet capital expenditure needs.
Shares of Vodafone Idea closed about 5% higher on the BSE on Wednesday.
The telco, which still needs to pay over Rs 51,000 crore of its adjusted gross revenue (AGR) dues to the government, has been involved in various tax-related disputes with the I-T department.
Supreme Court had, in fact, “dismissed Vodafone’s appeal and upheld tax department’s action of withholding approximately Rs 4,000 crore in refund due to pendency of tax proceedings for various years.” Also said there was “still some uncertainty on the refund”
“This will bolster the case of the tax department wherein there is an ongoing assessment and the tax officer is of the opinion that granting the refund (when there is a likely tax demand) would be prejudicial to the interests of revenue,” tax partner said.
In conclusion irrelevancy on both side of parties is justified. Thus valuable decision and action is taken by Supreme Court to up held the company as well as the department.