In a significant ruling reinforcing the binding nature of appellate orders, the Delhi High Court in Santosh Kumar Suri v. DCIT criticised the Income Tax Department for its prolonged delay in giving effect to an ITAT order that had granted relief to the assessee. The Court held that taxpayers cannot be compelled to suffer due to departmental inaction and directed immediate issuance of the refund along with statutory interest under Section 244A of the Income-tax Act, 1961.
Case Details
Court: Delhi High Court
Case Title: Santosh Kumar Suri v. Deputy Commissioner of Income Tax
Date of ITAT Order: 20 January 2023
Assessment Year: AY 2016–17
Area of Law: Income Tax – Implementation of ITAT Orders, Refund, Section 244A Interest
Background Facts
- The petitioner filed his return of income for AY 2016–17, declaring ₹33,64,160.
- The case was selected for scrutiny, and an assessment order under Section 143(3) was passed on 25 December 2018.
- Aggrieved, the assessee filed an appeal before the ITAT, which granted relief on 20 January 2023.
- Despite the favourable order, the Income Tax Department failed to give effect to the ITAT decision and did not issue the due refund.
- The petitioner filed a writ petition under Articles 226/227 seeking directions for implementation of the order and release of refund with interest.
High Court’s Observations
- The Court noted a “lack of justification” for the delay by the tax authorities.
- ITAT orders are binding, and failure to implement them defeats the objective of appellate remedies.
- A taxpayer’s right to refund, once crystallised, cannot be frustrated due to administrative lethargy.
- The Court emphasised the mandatory nature of interest under Section 244A for delayed refunds.
Decision
The Delhi High Court directed the Department to:
- Immediately give effect to the ITAT’s order, and
- Release the refund along with statutory interest under Section 244A.
The ruling reiterates that taxpayers should not be pushed into avoidable litigation merely because the Department fails to act on appellate directions.
Conclusion
The Santosh Kumar Suri v. DCIT ruling serves as a strong reminder that tax authorities are duty-bound to honour appellate orders without delay. Once the ITAT grants relief, the Department must act promptly to give effect to the decision and issue the corresponding refund. The Delhi High Court’s intervention underscores that taxpayers cannot be left waiting indefinitely for what is rightfully theirs, and any delay entitles them to statutory interest under Section 244A. The judgment reinforces accountability within the Income Tax Department and upholds the principle that administrative inaction cannot override a taxpayer’s legal rights.