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IN THE HIGH COURT OF DELHI AT NEW DELHI
Rajiv Shakdher, Girish Kathpalia, JJ.
Infres Methodex Private Limited – Appellant
Versus
Assistant Commissioner of Income Tax, Circle 12(1) Delhi & Ors. – Respondents
W.P.(C) 6882 of 2023 & CM APPL. 26857 of 2023
Decided On : 22-05-2023
Income Tax Act - Adjustment of Refund - The court ordered the concerned authority to adjust the refund due for Assessment Year 2021-2022 & 2022-2023 to the extent of 20% of the demand raised for AY 2017-2018, while allowing the petitioner to take recourse to an appropriate remedy if aggrieved by the decision on the application for stay.
Fact of the Case:
The petitioner's principal grievance was that the respondents/revenue proceeded to adjust the refund without following the regime set forth in Section 245 of the Income Tax Act, 1961, against the demand raised for AY 2017-18.
Finding of the Court:
The court ordered the concerned authority to adjust the refund due and dispose of the application for stay of demand within three weeks from the receipt of the judgment.
Issues: Adjustment of refund without following the regime set forth in Section 245 of the Income Tax Act, 1961, and the delay in adjudicating the appeal and application for staying the demand.
Ratio Decidendi: The court's decision was influenced by the need to ensure compliance with the provisions of the Income Tax Act and to provide the petitioner with an opportunity to seek appropriate remedy if aggrieved.
Final Decision: The writ petition was disposed of with the order for the concerned authority to adjust the refund due and dispose of the application for stay of demand within three weeks.
JUDGMENT
[Physical Hearing/Hybrid Hearing (as per request)]
Rajiv Shakdher, J. (Oral):
1. Issue notice.
1.1. Mr Gaurav Gupta, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.
2. In view of the directions that we propose to pass, Mr Gupta says, that he does not wish to file a counter-affidavit in the matter, and that he will argue the matter based on the record presently available to the Court.
3. Therefore, with the consent of learned counsel for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself.
4. Counsel for the petitioner says, that the petitioner's principal grievance is, that the respondents/revenue, without following the regime set forth in Section 245 of the Income Tax Act, 1961 [in short, "the Act"] proceeded to adjust the refund available to it amounting to Rs.1,72,02,960/- for Assessment Year 2021-22 & 2022-23 against demand raised for AY 2017-18.
5. We are informed, that the demand raised qua the petitioner for AY 2017-18 is Rs.2,52,59,189/-.
6. Furthermore, counsel for the petitioner says, that he has filed an appeal against the assessment order concerning demand with respondent no.2 [i.e., Commissioner of Income Tax (Appeals)], which has not been adjudicated yet.
7. We are told, that this appeal was filed on 20.01.2020.
8. It is also the submission of the counsel for the petitioner, that an application for staying the demand concerning AY 2017-18 has been lodged with respondent no.1, which is also not being dealt with.
9. It is averred, that the said application, which is dated 29.01.2020, was lodged with the respondent no.1 on 03.02.2020.
10. Given this position, we have queried the counsel for the petitioner, whether he would have objection, if, for the moment, against the refund due qua AY 2021-2022 & 2022-23, adjustment is made to the extent of 20% of the demand raised for AY 2017-18.
11. Counsel for the petitioner says, that the petitioner will have no objection if such a direction is issued by the concerned authority.
12. It is ordered accordingly.
12.1. The concerned authority will bear this in mind, and pass an appropriate order.
13. In case the petitioner is aggrieved by the outcome i.e., the decision rendered on the application for stay, it will have liberty to take recourse to an appropriate remedy, albeit, as per law.
14. The concerned authority will dispose of the application for stay of demand at the earliest, though not later than three [3] weeks from the receipt of copy of the instant judgement.
15. The writ petition is disposed of in the aforesaid terms.
16. Consequently, pending application shall stand closed.
17. Parties will act based on the digitally signed copy of the order.
The court emphasized the importance of following the regime set forth in Section 245 of the Income Tax Act, 1961, and upheld the petitioner's right to seek an appropriate remedy if aggrieved by the d....
Prompt addressing of rectification application for refund and timely remittance of refund amount if due.
The obligation of the Assessing Officer to pass a speaking order in response to the petitioner's communication regarding the reconciliation of refund figures.
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 ....
The court applied the principle that the revenue cannot recover more than 20% of the outstanding tax demand and emphasized the timely disposal of the appeal.
The court ruled on the application of Articles 226 and 227 regarding interim tax relief, emphasizing that disputed tax demands require careful judicial consideration and timely hearings.
The court emphasized the importance of the Commissioner of Income Tax to dispose of the petitioner's application and accord a personal hearing, and allowed filing of written submissions. It also prov....
The central legal point established in the judgment is the importance of expeditious disposal of appeals and compliance with court directions in matters related to refunds and recovery proceedings.
Procedural fairness and consideration of petitioner's response in assessment proceedings under the Income Tax Act
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