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 of the Income Tax Act, 1961 and Office Memorandums.

ORDER

Rajiv Shakdher, J. (Oral)--On the previous date i.e., 14.07.2023, we had heard the counsels for the parties and etched out the broad contours of the matter. For the sake of convenience, the relevant parts of the said order are extracted hereafter:

"2. The principal grievance of the petitioner is, that the respondents/revenue have adjusted against the refund payable qua Assessment Year (AY) 2022-23, demands outstanding with respect to AYs 2011-12, 2012-13 and 2013-14.

3. Mr Ajay Vohra, learned senior counsel, who appears on behalf of the petitioner, says that there are several flaws with regard to the steps taken by the respondents/revenue:

(i) First, the adjustment made is more than 20% which is contrary to the Office Memorandum [in short, "OM"] dated 29.02.2016, as amended by OM dated 31.07.2017.

(ii) Second, it disregards the fact that an appeal vis-a-vis the aforementioned AYs is pending adjudication with the Commissioner of Income Tax (Appeals) [in short, "CIT(A)"].

(iii) Third, the adjustment has been made without passing an order, as required in law under Section 245 of the Income Tax Act, 1961 [in short, "Act"]. In this regard, it is submitted that a mere intimation was given on 02.03.2023.

4 We may note, that the adjustment which has been made, amounts to Rs.40,09,91,031/-.

4.1 Resultantly, the petitioner was released with regard to the refund claimed vis-a-vis AY 2022-23 i.e., Rs.52,78,60,069/-.

5. The petitioner, via this writ action, claims the balance amount i.e., Rs.32,07,13,625/- along with applicable interest, which is the amount in excess of 20% of the disputed demand concerning the aforementioned AYs.

5.1 Mr Vohra, in support of the plea that the respondents/revenue had to pass an order under Section 245 of the Act has relied upon the judgment of the coordinate bench of this Court in Glaxo Smith Kline Asia (P.) Ltd. vs. CIT, 290 ITR 35 (Del).

5.2 To be noted, the said judgement stands affirmed by the Supreme Court in the judgement rendered in CIT vs Glaxo SmithKline Asia (P) Ltd., 236 CTR 113 (SC).

6. As regards the prayer made in the application, that the amount adjusted over and above 20% disputed demand ought to be refunded, reliance is placed on the judgment rendered by the Punjab and Haryana High Court in Jindal Steel and Power Ltd. vs. PCIT, 391 ITR 42 (P&H).

7. According to us, prima facie, Mr Vohra, is right, which is, for making an adjustment over and above the stipulated percentage i.e., 20% of the disputed demand, in terms of the aforementioned OM dated 29.02.2016, the concerned officer will have to furnish reasons and satisfy himself, as to why disputed tax cannot be collected by other means if it ultimately bears fruition.

8. Accordingly, issue notice.

8.1 Mr Shailendera Singh, learned senior standing counsel accepts notice on behalf of the respondents/revenue.

9. Mr Singh will return with instructions.

9.1 In case instructions are received to resist the petition, a counter-affidavit will be filed before the next date of hearing.

10. List the matter on 07.08.2023."

2. Before we proceed further, it is relevant to note that a typographical error has crept in paragraph 2 of the order, wherein, instead of AY 2013-14, what should have been included is AY 2014-15.

2.1. The order dated 14.07.2023 shall stand corrected to the aforesaid extent.

3. Admittedly, no counter-affidavit has been filed.

4. We have asked Mr Shailendera Singh, learned senior standing counsel, who appears on behalf of the respondents/revenue, as to whether the facts and circumstances adverted to in our order dated 14.07.2023 are disputed.

4.1. Mr Singh says that although the facts and events recorded in the order dated 14.07.2023 are not disputed, the petitioner ought to have filed an application under Section 220 of the Income Tax Act, 1961 [in short, "the Act"] so that an appropriate order could have been passed by the Assessing Officer (AO), with regard to the outstanding deposit against the disputed demand.

5. On the other hand, the coun