The Supreme Court on Wednesday dismissed a petition filed by the finance ministry against a Bombay high court order that had directed the revenue department to refund Rs 833 crore to cash-strapped Vodafone-Idea.
The refund was held by the income tax department citing possible future demands.
Earlier this month, the high court had ruled that such powers (to hold back the refund) did not exist in assessment year 2014-15, to which the case pertained.
The revenue department had filed a special leave petition against the high court order in the Supreme court.
"It has to be noted that we now have section 241A under the I-T Act, which gives such power to tax officers. However, that section was not applicable to the year in question (2014-15 assessment year)," said Amit Maheshwari, tax partner at AKM Global, consulting firm.
The refund amount increased from Rs 733 crore to Rs 833 crore after rectification.
The share of Vodafone-Idea rose 2.65 per cent to close at Rs 8.53 on the closing on Wednesday on BSE.
The telco, which still needs to pay over Rs 51,000 crore of its adjusted gross revenue (AGR) dues to the government, has got some relief this way.