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Informist, Wednesday, Jul. 29, 2026

 

NEW DELHI – The Delhi High Court has observed that there is something seriously amiss in the system and working of the Income Tax department as every week there are three to four cases where an assessee has approached the court on delay of getting refunds under the Direct Tax Vivad se Vishwas Scheme, 2024. The high court asked the chairman of Central Board of Direct Taxes to ascertain whether the statement made by an income tax assessing officer regarding non-availability of Income Tax Business Application module for delay in issuance of refund was correct. 

 

In case, what the assessing officer has stated is found to be correct, then the Central Board of Direct Taxes will ensure that requisite modules are placed in order, said the court. The board should ensure that once Form number 4 is issued, the amount is credited with promptitude and preferably within a period of 90 days. 

 

Form number 4 under the Direct Tax Vivad Se Vishwas Scheme, 2024 is the order for full and final settlement of tax arrears. It is issued by the designated authority after the taxpayer completes the required payment and submits proof.

 

The high court was hearing a plea by Yashita Finance Pvt. Ltd. alleging that despite the income tax department issuing Form number 4, determining refund of INR 17.80 million was payable under the 2024 scheme, the amount has not been released. Such an approach is an antithesis to the scheme known as the Vivad se Vishwas Scheme and hits at the very "Vishwas" over the scheme, said the petitioner. 

 

The income tax department said that the refund determined under the 2024 scheme could only be processed through the Income Tax Business Application system. However, the requisite functionality for processing order giving effect under the 2024 scheme was not available in the system during the period from October 2025 to March 2026, and became operational only in April 2026. There is no module available on the portal of the assessing officer which reflects the refunds which are to be processed under the 2024 scheme.  

 

The court noted the assessing officer's statement the tax refund has been processed. However, the amount has not been credited in petitioners' account, said the court. Giving a week's time to the tax department in the case, the high court listed the matter for hearing on Aug. 6.  End

 

Reported by Surya Tripathi

Edited by Akul Nishant Akhoury

 

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