[Cites 14, Cited by 0]
Orissa High Court
Diamond Plaza Pvt.Ltd vs Assistant Commissioner Of Income .... ... on 2 February, 2026
Author: Murahari Sri Raman
Bench: Murahari Sri Raman
IN THE HIGH COURT OF ORISSA AT CUTTACK
W.P.(C) No.26536 of 2025
Diamond Plaza Pvt.Ltd. .... Petitioner
Mr. Abhijeet Agarwal,
Advocate
-versus-
Assistant Commissioner of Income .... Opposite Parties
Tax, Central Circle, Cuttack and
others
Mr. Avinash Kedia,
Junior Standing Counsel
CORAM:
THE HON'BLE THE CHIEF JUSTICE
AND
THE HON'BLE MR. JUSTICE MURAHARI SRI RAMAN
ORDER
Order No. 02.02.2026
01. 1. Heard Sri Abhijeet Agarwal, learned counsel appearing
for the petitioner and Sri Avinash Kedia, learned Junior Standing
Counsel appearing for the Department-opposite parties.
2. Learned counsel appearing for the petitioner submitted
that an assessment under Section 153 of the Income Tax Act, 1961
("IT Act", for brevity) pertaining to the assessment year 2009-10
was framed vide order dated 28th December, 2016 assailing which
the petitioner filed an appeal, that stood allowed vide order dated
14th June, 2018 by the Commissioner of Income Tax (Appeals)-2,
Bhubaneswar.
2.1. It is submitted that the opposite party no.1-Assistant
Commissioner of Income Tax, Central Circle, Cuttack sitting tight
over the matter has not yet disbursed the amount of refund along
with interest by giving effect to the order in appeal. It is submitted
that the petitioner is entitled to not only the amount of refund as per
Section 240 of the IT Act but also interest thereon. On such refund
as a result of giving effect to order under Section 250 in terms of
Section 244A of the said Act of 1961.
2.2. It is submitted at the Bar that as provided under Section
154 of the IT Act it is obligated on the Assessing Officer to give
effect to an order under Section 250, wholly or partly, otherwise
than by making a fresh assessment or reassessment or fresh order
under Section 92CA, as the case may be, within a period of three
months from the end of the month in which order under Section 250
or Section 254 or Section 260 or Section 262 is received by the
Principal Chief Commissioner or Chief Commissioner or Principal
Commissioner or Commissioner, as the case may be, the order
under Section 263 or Section 264 is passed by the Principal
Commissioner or Commissioner.
2.3. Stemming on the provisions laid in Section 240 of the IT
Act it is submitted by the learned counsel that where, as a result of
an order passed in appeal or other proceeding under the Act, refund
of any amount becomes due to the assessee, the Assessing Officer
shall, except as otherwise provided in the Act, refund the amount to
the assessee without his having to make any claim in that behalf.
2.4. Way back in 2018 the Appellate Authority by order dated
14.06.2018 finalised the appeal by observing thus:
"4.4 I have carefully examined the assessment
order and submissions of the appellant. I have also
perused the seized material. I find that there is no
indication in the seized material namely SGINDIA-01
that the share capital is bogus or it is undisclosed income
of the appellant. The seized material gives the details of
share applicants, numbers of shares purchased, financial
year in which they have been purchased, the rate and
amount for which have been purchased and the rate of
buyback of these shares. It is important to note that this is
a case in which search and seizure u/s.132 of the Income
Tax Act, 1961 was conducted and no evidence of bogus
share capital or undisclosed income was unearthed. It is
seen from the assessment order that the Assessing Officer
analysed the balance sheet of the persons who have
purchased the shares. According to the Assessing Officer,
these share holders have very low income, but, they have
purchased shares of substantial amount along with share
premium. The Assessing Officer has further stated that
enquiries were conducted in the case of some of the share
applicant companies by the Investigation Wing of the
Income Tax Department and it was found that
unaccounted income generated in cash was routed
through the Kolkata based share companies and brought
in the books in the guise of share capital by the appellant.
According to the Assessing Officer, the share applicant
companies don't do any business and only involved in
receiving investment from certain similar companies and
they are making investment as share capital in other
companies. However, it is seen that the Assessing Officer
has not given any details as to who generated the cash
and how it was routed through the appellant company. It
is only a general statement without backing of any
evidence. The Assessing Officer has not quoted any
statement of any share broker or any intermediary or
directors of company or directors of appellant company
whatsoever. No evidence was confronted by the Assessing
Officer to the appellant. On the contrary, the appellant
has submitted copies of share application form ROC
details, Income Tax particulars, Profit & Loss account,
balance sheet and bank statements. The low profit and
high investment, at best, can give rise to suspicion, but
suspicion cannot take the place of evidence. The share
applicant companies have transacted through banking
channels accounts at the time of making the investment.
Moreover, the details maintained in the documents in
SGINDIA-01 which is the seized material, is reflected in
the audited books of account of the appellant company
and therefore the presumption u/s.292C of the Income
Tax Act, 1961, that the contents in the seized material are
true is in favour of the appellant-company. The Assessing
Officer has not brought any material on record to rebut
this presumption. Thus, there is no evidence in the seized
materials to come to the conclusion that the share capital
is not genuine. No evidence has been brought on record
by the Assessing Officer to suggest that the share capital
is not genuine. Considering these aspects, the addition
made by the Rs. 40,00,000/- Assessing Officer is ordered
to be deleted.
4.5 In view these facts it is my considered view
that the addition of Rs. 40,00,000/- cannot be sustained
and therefore it is ordered to be deleted. The grounds of
appeal are allowed.
5. In the result, the appeal is allowed."
2.5. It is vociferously submitted that since the Appellate
Authority has allowed the appeal granting full relief, the deposits
made out of the illegitimate demands are required to be refunded
inasmuch as the eventualities specified in proviso to Section 240 do
not get attracted in the fact-situation in the present case.
2.6. Referring to the provisions contained in Section 244A of
the IT Act, Sri Abhijeet Agarwal, Advocate would claim that the
petitioner is entitled to interest on refund. It is provided in sub-
section (1A) thereof that in a case where a refund arises as a result
of giving effect to an order inter alia under Section 250, wholly or
partly, otherwise than by making a fresh assessment or
reassessment, the assessee shall be entitled to receive, in addition to
the interest payable under sub-section (1), an additional interest on
such amount of refund calculated at the rate of three per cent per
annum, for the period beginning from the date following the date of
expiry of the time allowed under sub-section (5) of Section 153 to
the date on which the refund is granted.
2.7. Sri Abhijeet Agarwal, learned Advocate prayed for a
direction to the appropriate authority to do the needful within a
stipulated period granting refund and interest thereon in terms of
the statutory provisions referred to above.
3. At this stage, learned Junior Standing Counsel appearing
for the Department-opposite parties seeks time to obtain instruction
from the Department.
4. List this matter on 12th February, 2026. Needless to say
that during the pendency of this writ petition, it would not preclude
the authority concerned to take decision in accordance with law. An
affidavit is solicited from the concerned authority to be filed on the
next date of listing enumerating reasons as to why the order dated
14.06.2018 passed in IT Appeal No. 0684/2016-17 has not been
given effect to within the period stipulated in the statute.
(Harish Tandon)
Chief Justice
Signature Not
Verified
Digitally Signed
Signed by: ASWINI KUMAR
(M.S. Raman)
SETHY
Designation: Personal Assistant Judge
(Secretary-in-charge)
Reason: Authentication Aswini
Location: ORISSA HIGH COURT,
CUTTACK
Date: 02-Feb-2026 20:06:55
