A recent writ petition entertained by Bombay HC seeking mandamus for processing of return where the statutory period of 9 months for processing of return has not expired.

Brief Background and key excerpts

• Assessee seeks mandamus for processing of return where statutory period of 9 months for processing of return has not expired, considering the materiality of outstanding refund amount;
• Assessee submits before HC, that notwithstanding the period of nine months prescribed under the Act, the CBDT Instruction No. 7 of Aug 1, 2002 specifically envisages that the Department would aspire to issue refunds along with interests within six months from the date of e-filing of returns. Revenue opposes the writ petition by submitting that time limit for processing the return has not expired, thus, no mandamus can be issued and the Assessee has no right to seek relief before expiry of the statutory period;
• HC observes that Assessee’s tax liability is merely Rs.2.17 Cr. whereas refund due is Rs.17.52 Cr. and takes note of Assessee’s submission that withholding of such huge amount prejudices its rights besides affecting its business adversely;
• HC opines that the prescribed limit is an outer limit, which does not in any manner prevent the AO from processing the return at an earlier date and the AO must come out with reasons, as to why return has not been processed, notwithstanding the fact that time period available will expire on Dec 31, 2022;
• Bombay HC entertains writ petition seeking mandamus for processing of return where statutory period of 9 months for processing of return has not expired, considering Assessee’s plea of outstanding refund. HC directs the Director of Income Tax, Centralised Processing Centre, Bengaluru to file an affidavit on whether the return is under process or not, and if not, the reasons therefore.