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SC Orders ₹1,600 Crore Refund to Vodafone Idea, Rejects Tax Appeal

Written by: Team Angel OneUpdated on: Jan 21, 2025, 3:03 PM IST
The Supreme Court upheld a Bombay HC order directing a ₹1,600 crore refund to Vodafone Idea, rejecting the tax department's appeal citing a 295-day delay.
SC Orders ₹1,600 Crore Refund to Vodafone Idea, Rejects Tax Appeal
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The Supreme Court, on January 20, 2025, upheld a Bombay High Court order directing the Income Tax Department to refund ₹1,600 crore to Vodafone Idea Ltd. This includes ₹1,128 crore in excess tax payments for the assessment year (AY) 2016-17, along with ₹500 crore as interest. 

The apex court dismissed the tax department’s special leave petition (SLP) citing an unexplained delay of 295 days in filing the appeal. The bench of Justices JB Pardiwala and R Mahadevan termed the delay unjustified.

Rules Against Time-Barred Tax Order

The Bombay High Court’s November 2023 judgment deemed the assessment order against Vodafone Idea unsustainable and time-barred. The court noted that the assessing officer failed to issue the final order within the prescribed 30 days following the dispute resolution panel’s directions, instead delaying it by two years. This violation of the Income Tax Act’s timeline was criticized.

Refund Linked to AY 2016-17 Scrutiny

The dispute originated from Vodafone Idea’s claim for a ₹1,128 crore refund for AY 2016-17. The tax department rejected the claim, revising the company’s taxable income and alleging discrepancies in arm’s length pricing. 

The telecom operator challenged this in the Bombay High Court, which ruled in its favour, ordering the refund with interest.

Impact of the Verdict

The court observed that the officer’s dereliction of duty affected not only the exchequer but also public trust. In its decision, the High Court emphasised that adhering to statutory timelines is crucial. 

Market Response

Following the announcement, Vodafone Idea’s shares, which recently saw a 25.84% rise over the past month, are currently trading at ₹9.39 on the BSE as of 11:20 AM on January 21, showing a 5.53% decline today. This follows a 9.1% rise in yesterday’s trading session, despite a 40.84% drop over the past six months.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing.

Published on: Jan 21, 2025, 3:03 PM IST

Team Angel One

Team Angel One is a group of experienced financial writers that deliver insightful articles on the stock market, IPO, economy, personal finance, commodities and related categories.

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