Delhi HC: Rectification application u/s 154 should be disposed off within statutory limitation

Fact and Issue of the case

By way of the present writ petition, Petitioner seeks directions to the Respondent No. 2 to dispose of within four weeks, Petitioner’s Rectification Application dated 14th May, 2020 granting the consequential TDS credit of Rs.5,51,15,908 due to the petitioner and deleting the incorrect demand of Rs.6,97,16,942 which only arises due to non-grant of the said TDS credit.

Observation of the court

Learned Counsel for the Petitioner states that the Respondents No.2 has failed to dispose of Petitioner’s Rectification Application dated 14th May, 2020 for the Assessment Year 2018-19 within the period of limitation provided in Section 154(8) of the Income Tax Act, 1961 (which lapsed on 31st March, 2021). He states that as a result of the inaction of the Respondent No.2, TDS credit of Rs.5,51,15,908 remains disallowed to the Petitioner and a patently incorrect demand of Rs.6,97,16,942 (Rs. 5,51,15,908 plus interest of Rs.1,46,01,034) stands raised. He also relies on the CBDT Circular No.14/2001 read with the CBDT Instruction No. 1/2016 which mandates Respondent No.2 to strictly comply with the statutory limitation provided in Section 154(8) of the Act in disposing of the Petitioner’s Rectification Application. In support of his contention, learned counsel for the Petitioner relies on the decision of this Court in LS Cable and System Ltd. V. UOI, W.P. (C) 5154/2020 wherein in similar facts, this Court directed the Assessing Officer to dispose of the assessee’s rectification application under Section 154 within six weeks from the date of the Court’s Order. 4. Issue notice. Mr. Zoheb Hossain, learned counsel for Revenue accepts notice. On instructions, he undertakes to this Court that Petitioner’s rectification application dated 14th May, 2020 shall definitely by disposed of within six weeks. The undertaking given by Mr. Zoheb Hossain, learned counsel for Revenue is accepted by this Court and respondents are held bound by the same. In view thereof, the present writ petition along with application stands disposed of.