2018 (9) TMI 354 - HC - Income Tax

Demand of interest - assessee sought adjustment of refunds due to the petitioner against the outstanding demands u/s 245 - refunds processed online - Held that - The petitioner made an attempt to obtain refund of the said amount of ₹ 110,52,45,145/- on TDS Reconciliation, Analysis and Correction Enabling System ( TRACES ), an online Portal under the control and supervision of the 1st respondent. However, the petitioner could not succeed in getting its refunds processed online. The provisions of Section 245 of the Act clearly depicts that where under any of the provisions of the Act, a refund is found to be due to any person, the Assessing Officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or Principal Chief Commissioner or Chief Commissioner or Prl. Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section. The authorities ought to have exercised their powers under the provisions of the section-245 of the Act either to refund the amount due or adjust the refund against the outstanding demands for the assessment years 2010-11 to 2013-14. The same has not been done in the present case. Writ petitions are allowed and the respondents are hereby directed to adjust the refund of ₹ 110,52,45,145/- due to the petitioner pursuant to the orders dated 22.12.2017 (Annexures-H-1 to H-4) passed by the 2nd respondent, against the outstanding demands made against the petitioner for the assessment years 2010-11 to 2013-14, in accordance with law as expeditiously as possible

Summary

Issues:
1. Refund due to petitioner from respondent Nos. 1 and 2.
2. Adjustment of refund against outstanding demands for assessment years 2010-11 to 2013-14.

Issue 1: Refund due to petitioner from respondent Nos. 1 and 2

The petitioner filed writ petitions seeking a mandamus to direct Respondent Nos. 1 and 2 to refund an amount of ?110,52,145/- due to the petitioner as per orders passed by the 2nd respondent. The petitioner was deemed an 'assessee-in-default' for non-deduction of tax at source, leading to a series of appeals and rectification orders. The Tribunal partially allowed the appeals, clarifying the mode of computation of interest payable by the petitioner. Subsequently, the 2nd respondent passed orders determining refunds due to the petitioner, totaling ?110,52,45,145/-. Despite the finality of these orders, the petitioner faced difficulties obtaining the refund through the online portal TRACES under the 1st respondent's control. The petitioner's repeated requests for refund remained unaddressed by the respondents, leading to the filing of writ petitions.

Issue 2: Adjustment of refund against outstanding demands for assessment years 2010-11 to 2013-14

The demands raised by the 3rd respondent for the assessment years 2010-11 to 2013-14 were outstanding to some extent. The petitioner, in an attempt to resolve the refund issue, requested assistance from the authority controlling TRACES to either refund the due amount or adjust it against the outstanding demands. However, despite these requests, Respondent Nos. 1 and 2 did not take any action to refund the amount due or adjust it against the outstanding demands. The petitioner invoked Section 245 of the Income Tax Act, which allows setting off a refund against any remaining payable amount under the Act. The court noted that the authorities failed to exercise their powers under this section to refund the due amount or adjust it against the outstanding demands. Consequently, the court directed Respondent Nos. 1 and 2 to adjust the refund due to the petitioner against the outstanding demands for the assessment years 2010-11 to 2013-14 within a stipulated timeframe of six weeks from the date of the court order.

This detailed analysis of the judgment highlights the legal proceedings, issues involved, and the court's decision regarding the refund due to the petitioner and its adjustment against outstanding demands.