Man misses ITR e-verification while caring for ailing father; ITAT orders ₹17 lakh refund

A Delhi bench of the Income Tax Appellate Tribunal (ITAT) has directed the Income Tax Department to release a taxpayer's ₹17.08 lakh refund after ruling that a delay in e-verifying his Income Tax Return (ITR) could not be used to deny a legitimate refund once the delay had already been condoned.

Case details

The case involved Mr Bhatia, a Delhi resident who filed his ITR for the Assessment Year 2015-16 on September 3, 2015. He declared rental income of approximately ₹1.42 crore and claimed a refund of ₹17.08 lakh arising from advance tax payments and Tax Deducted at Source (TDS), according to ET Wealth.

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However, Bhatia failed to complete the mandatory e-verification of his return within the prescribed timeline because he was occupied with caring for his 83-year-old father, who was seriously ill and later passed away. As a result, his return was treated as invalid, and the refund was denied.

Approached to CPC 

Bhatia later approached the Centralised Processing Centre (CPC) seeking condonation of the delay. The CPC accepted his explanation, and the return was eventually e-verified on February 16, 2018, as reported by ET Wealth.

Despite the condonation, the Income Tax Department did not process the return under Section 143(1). A rectification application under Section 154 was also rejected by the Assessing Officer, and the first appellate authority upheld the decision, prompting the taxpayer to move the ITAT.

ITAT ruling

The Delhi ITAT ruled in favour of the taxpayer, observing that once the CPC had condoned the delay in e-verification, the department could not continue to deny the refund on the same procedural ground.

The tribunal held that there was no dispute regarding the TDS deducted from the taxpayer's rental income, and the corresponding tax credit was already available in the department's records.

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Referring to Article 265 of the Constitution, the tribunal observed that tax cannot be levied or retained without the authority of law. It further noted that withholding the refund despite there being no tax liability would amount to "unjust enrichment" by the Revenue.

Accordingly, the ITAT set aside the orders of the lower authorities and directed the Assessing Officer and the CPC to process the return and grant the refund in accordance with law.