Exceeding 20% adjustments of income tax refunds are impermissible, and full refunds must be made within stipulated time frames as per legal precedents.

ORAL ORDER :

The petitioner is before this Court, seeking the following prayer:

"A. Issue as far as Petitioner is concerned by an appropriate writ or Order in the nature of Mandamus or otherwise, to the Learned First Respondent to grant refund of amount set-off in excess of 20% of demand as per letter dated 30.05.2025 enclosed as Annexure G.

B. Issue as far as Petitioner is concerned by an appropriate writ or Order in the nature of Mandamus or otherwise, directing the learned Respondent to grant interest on refund as stipulated under section 244A for AY 2020-21.

AND

C. Grant such other reliefs as this Honourable High Court may think fit including the cost of this writ petition"

2. Heard Sri. Narendra Kumar J. Jain, learned counsel appearing for the petitioner, Sri. M. Dilip, learned counsel appearing for the respondents and have perused the material on record.

3. Learned counsel appearing for the petitioner submits that the petitioner is similarly placed with that of the petitioner in W.P.No.1204/2025 dated 26.03.2025, wherein the Co-ordinate Bench of this Court has held as follows:

"In this petition, petitioner seeks for the following reliefs:

“i) Declaring that the adjustment of refund of Rs.2,24,18,499/-determined for the assessment year 2019- 20 and the refund of Rs.4,53,93,633/- determined for the assessment year 2023-24 against the demand for assessment year 2021-22 is illegal and without jurisdiction;

(ii) Directing the Respondents to forthwith refund an amount of Rs. 2,24,18,499/- determined as refundable to the Petitioner vide order dated 03.03.2023 for the assessment year 2019-20 (adjusted with the demand for the assessment year 2021-22), along with applicable interest at Annexure-F.

(iii) Directing the Respondents to forthwith refund an amount of Rs. 4,53,93,633/- determined as refundable to the Petitioner vide intimation dated 21.10.2024 for the assessment year 2023-24 (adjusted with the demand for the assessment year 2021-22), along with applicable interest at Annexure-S.

(iv) Directing the Respondents not to recover any portion of the demand pertaining to the assessment year 2021-22 during the pendency of the appeal before the CIT(A) and for a period of three weeks thereafter; and (v) pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity.

2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record.

3. A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the decision of a Co-ordinate Bench of this Court in the case of M/s. Price Waterhouse, Bengaluru Vs. National Faceless Appeal Centre, Delhi and Ors passed in W.P.No.23784/2024 dated 25.09.2024 and as such, the present petition also deserves to be allowed in terms of the said decision of this Court.

4. This Court in the case of M/s. Price Waterhouse, (supra) has held as under:

In this petition, the petitioner seeks the following relief's:

“(i) Directing the 3^rd Respondent to forthwith refund Rs.21,08,91,940/-, being demand recovered in excess of 20% of the demand raised for the assessment year 2012-13, along with applicable interest;

(ii) Directing the 1^st / 2^nd Respondent to dispose of the appeal pending before it for the assessment year 2012-13 in Appeal No.CIT(A), Bengaluru-1/10224/2015-16 (old appeal No.9/10002/2017-18 (Manual Appeal Register No.:40/BU/2015-16)) (Annexure0B dated 29.04.2015 in a time bound manner, expeditiously;

(iii) Directing the Respondents not to enforce the balance demand raised vide demand notice dated 31.03.2015 (Annexure-A2) until disposal of the appeal by the 1^st / 2^nd Respondent and for a period of three weeks