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IN THE HIGH COURT OF DELHI
Manmohan, Navin Chawla, JJ.
Sony India Pvt. Ltd. - Appellant
Versus
Assistant Commissioner of Income Tax - Respondent
W.P.(C) 13868 of 2021 & CM Appls. 43766-43767 of 2021
Decided On : 08-12-2021
| Table of Content |
|---|
| 1. challenge to order and recovery notice (Para 1) |
| 2. cited judgments supporting petitioner's argument (Para 2) |
| 3. notice issued and petition disposed (Para 3 , 7) |
| 4. error acknowledged by revenue (Para 4) |
| 5. court upholds time-bound resolution and suspends demand (Para 5 , 6) |
JUDGMENT
Manmohan, J. (Oral)--Present writ petition has been filed seeking to quash the intimation/order cum deemed demand notice passed by Respondent No.4 under Section 200A/206 CB of the Income Tax Act [the Act] dated 31st October, 2021 raising demand on the Petitioner and all the purported proceedings thereunder. Petitioner also seeks a direction to stay the recovery proceedings in respect of disputed outstanding demand of Rs.1,84,78,190/- for second quarter of Financial Year 2021-22.
2. Learned counsel for the petitioner states that despite the matter in issue being covered in petitioner's favour by a judgment of this Court in Concentrix Services Netherlands B.V. vs. Income Tax Officer TDS & Anr., W.P.(C) 9051/2020 and in the petitioner's own case being W.P.(C) 3876/2021 neither the Centralized Processing Centre nor the Assessing Officer have decided petitioner's rectification application.
3. Issue notice.
4. Mr. Ruchir Bhatia, learned counsel for Revenue accepts notice. He admits that there has been an error on the part of the Assessing Officer in not deciding the petitioner's request/application dated 22nd November, 2021.
5. He assures this Court that the jurisdictional Assessing Officer shall decide the petitioner's request/application in accordance with the judgment passed by this Court in Concentrix Services Netherlands B.V. vs. Income Tax Officer TDS & Anr., W.P.(C) 9051/2020 as well as in accordance with the judgment and order passed in the case of petitioner's own case in W.P.(C) 3876/2021 dated 3rd June, 2021 within four weeks.
6. The assurance/undertaking given by learned counsel for Revenue/Respondents is accepted by this Court and the Revenue/Respondents are held bound by the same. Till the order is passed by the Assessing Officer, the impugned demand shall not be given effect to.
7. Recording the aforesaid undertaking and direction, the present writ petition stands disposed of.
AI
The High Court directed that a pending rectification application must be decided before any recovery action on the demand notices can proceed, ensuring the taxpayer's rights are upheld.
Tax authorities must adhere to established guidelines for refund adjustments, and deviations require explicit justification.
Timely disposition of rectification applications under tax laws is essential, enforcing the obligation of tax authorities to address erroneous demands promptly.
Point of Law : Taxation - Lieu of payment of refund tax - Government is bound to follow rules and standards they themselves had set on pain of their action being invalidated.
Tax authorities must adhere to their own prescribed procedures regarding refund adjustments, enforcing taxpayers' rights against undue excess recoveries.
The government must adhere to its own regulations regarding tax demand recovery, and any excess recovery without following prescribed procedures is deemed invalid.
Court orders must be strictly followed, and adjustment of tax refunds against non-collectable demands is impermissible.
Tax authorities must provide reasoned decisions considering principles like prima facie case and balance of convenience, and can relax mandatory deposit requirements in certain cases.
The requirement of payment of twenty percent of disputed tax demand is not a pre-requisite for putting in abeyance recovery of demand pending first appeal in all cases. The tax authorities are eligib....
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