Delhi High Court Orders Income Tax Department to Refund ₹53 Crore to Vodafone Idea

The Delhi High Court ordered the Income Tax Department to refund ₹53.09 crore plus statutory interest to Vodafone Idea Limited by September 30, 2026. The court ruled that refunds resulting from assessment or appellate orders constitute a "vested and crystallised right" and cannot be withheld simply because a taxpayer failed to submit Form 26B.

The dispute concerned tax refunds for assessment years 2003-04 and 2008-09 to 2013-14, which Vodafone Idea had previously won before the Income Tax Appellate Tribunal. The Income Tax Department attempted to delay payment by citing Form 26B requirements and outstanding demands. While the department initially alleged demands of ₹10.91 crore linked to sister concerns, other reports indicated demands of approximately ₹924.57 crore, though the department admitted most were stayed by other authorities.

Justices Dinesh Mehta and Rajneesh Kumar Gupta described the department's handling of the refunds as a "grim picture." The court noted the department lacked a valid order under Section 245 to justify withholding the funds. If the refund and interest are not paid by the deadline, the court mandated an additional interest penalty of 1 per cent per month.

Vodafone Idea shares surged 8% following the decision, although the company informed stock exchanges that the matter is a routine tax issue that does not meet the materiality threshold for formal disclosure under SEBI Listing Regulations.