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DHIRAJ SINGH THAKUR, KAMAL KHATA
Bharat Petroleum Corporation Limited – Appellant
Versus
Assistant Director of Income Tax, CPC, Centralized Processing Centre – Respondent
JUDGMENT :
(Kamal Khata, J.)
1. By this Petition under Article 226 of the Constitution, the Petitioner has raised a grievance that the Respondents have unlawfully adjusted a refund admittedly due in the sum of (i) Rs.1,66,84,74,041 for Assessment Year (AY) 2021-22 against the demand for AY 2015-16 and 2016-17 and (ii) Rs.44,58,24,745 for AY 2017-18 against the demand for AY 2016-17 without prior intimation u/s 254 of the ITA (Income-tax Act 1961).
2. Learned Senior Counsel Mr. Mistri submitted that by a notice u/s (under section) 156 of the ITA Respondent No. 2 granted refund of Rs.166,84,74,041/-. However, by a show cause notice u/s 220 of the ITA dated 29th December 2022 the Respondent No. 3 sought to treat the Petitioner as an ‘assessee in default’ for non-payment of outstanding demands. It is submitted that these demands for AY 2015-16 and 2016-17 were stayed by Respondent No.2’s orders dated 29th December 2021 and 27th April 2022 upon payment of 20% of the demand by the Petitioner. Besides, the Tribunal by orders dated 23rd March 2022 for AY 2015-16 and 5th September 2022 for AY 2016-17 decided in favour of the Petitioner in an appeal against the order u/s 263 of ITA passed by
Mandatory requirement of prior intimation under section 245 of the Income-tax Act and the continuation of stay till the disposal of the appeal.
The main legal point established in the judgment is the mandatory requirement of prior intimation under Section 245 of the Income Tax Act, 1961 for the set off of refunds against tax remaining payabl....
The main legal point established in the judgment is that the action of making adjustments of the refund without prior intimation, as required by section 245 of the Income Tax Act, is illegal and must....
Natural justice requires prior intimation before adjusting tax refunds against outstanding dues under Section 245 of the Income Tax Act.
Adjustment of tax refunds against outstanding dues requires prior intimation and adherence to principles of natural justice as mandated by Section 245 of the Income Tax Act.
The court emphasized the importance of allowing the petitioner the full period to respond before making any adjustment under Section 245 of the Income Tax Act.
The main legal point established in the judgment is that the adjustment made by the Assessing Officer must comply with the stipulated percentage of the disputed demand as per the relevant provisions ....
Adjustment of tax refunds against pending demands is impermissible when a taxpayer has made partial payment and an appeal is pending, as per the CBDT Circular.
Adjustment of tax refunds against pending demands is impermissible when 20% of the demand has been paid, as per CBDT Circular.
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