Karnataka High Court Directs NFAC To Refund Rs.29.30 Cr. With Interest To Myntra

The Karnataka High Court has directed the National Faceless Assessment Centre (NFAC) to refund Rs. 29.30 crore with interest under Section 244A of the Income Tax Act to Myntra Designs Pvt. Ltd.The bench of Justice B. M. Shyam Prasad has observed that if indeed a reference to the transfer pricing officer is under investigation, it would suffice for this Court to observe that if the adjudication, after due process, results in a demand, the petitioner, Myntra, will have to answer the demand, but in anticipation of a conclusion for a demand without even recording the reasons, the petitioner cannot be denied the refund.The petitioner/assessee has sought directions to issue a refund of Rs. 9,30,46,736 as computed under Refund Intimation along with applicable interest under Section 244A of the Income Tax Act, 1961, in an expeditious and timely manner.The assessee contended that the refund was being withheld without affording an opportunity and without recording an opinion as would be required under Section 241A of the Income Tax Act. The respondents were permitted to place on record the opinion recorded by the Assessing Officer and the permission granted by the concerned Principal Commissioner of Income Tax, if any.The department contended that the Assistant Commissioner of Income Tax, without recording an opinion on whether a grant of refund would likely affect the department adversely as is required under the provisions of Section 241A of the Income Tax Act, has stated that because a scrutiny assessment is pending with the Transfer Pricing Officer (TPO), the refund may be withheld.The court noted that withholding of the refund in the manner as now considered by the Assistant Commissioner of Income Tax, ReAC (AU)-1(2)(1), Surat cannot be accepted. The court held that the petition must be allowed, directing the respondents to refund a sum of Rs. 29,30,46,736 along with interest as is permissible in law within a timeframe without prejudice to a recovery demand on the conclusion of the pending proceedings.Counsel For Petitioner: Tarun GulatiCounsel For Respondent: Y. V. RavirajCase Title: M/S Myntra Designs Private Limited Versus National Faceless Assessment Centre Case No.: Writ Petition No. 19995 Of 2023 (T-IT)Citation No: 2023 LiveLaw (Kar) 499 Click Here To Read The Order

Karnataka High Court Directs NFAC To Refund Rs.29.30 Cr. With Interest To Myntra

Mariya Paliwala

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