Sec. 244A of Income Tax Act, 1961— Refunds - Processing of return under sub-section (1) of Section 143 must await the further exercise of power of scrutiny assessment under sub-sections (2) and (3) of Section 143.

Facts: Returns were filed by assessee for AY's 2014-15, 2015-16, 2016-17, 2017-18 claimimg refunds. Submitting that there was complete inaction on part of revenue in processing the ITRs filed by assessee and in issuing appropriate refund to the assessee, Writ Petition was filed by assessee in High Court, praying for refund alongwith interest under section 244A. During the pendency of writ petition, a letter was issued by Revenue stating that considering, pending special audit, pending scrutiny, pending demands of amount of more than 4500 crore, it will prejudicial to the interest of revenue to process the returns without completion of the pending scrutiny cases, therefore, exercising the powers under section 143(1D) and under Section 241A , the undersigned decline the processing of returns under Section 143(1) and dismissed the writ petition. Being aggrieved, assessee filed a writ petition before Supreme Court.

Held, that In the present case, the exercise of power on 14.03.2019 was not only after issuance of notice under sub-section (2) of Section 143 and after recording due satisfaction in terms of Section 241-A , but was also well within the period contemplated by sub-section (1) of Section 143 for causing due intimation. Whether the satisfaction recorded in terms of said Section 241-A was otherwise correct or not and whether case for withholding of refund was made out or not, are not the issues that arise for our consideration. For the present purposes, whether exercise of power is facially in conformity with the statutory provisions is the issue and we are satisfied that there is nothing in the exercise of power that led to the passing of the order dated 14.03.2019 which could be said to have violated any statutory requirements. This appeal is, therefore, dismissed and refunds granted to assessee. - VODAFONE IDEA LTD. V/s ASSTT. CIT - [2020] 315 CTR 001 (SC)