2021 (8) TMI 971 - HC - Income Tax

Adjustment of tax due under Direct Tax Vivad Se Vishwas Act, 2020 DTVSV Act with the amount as already been deposited by the Petitioner on account of the Penalty Order and to refund the excess amount in a time bound manner - HELD THAT - In the opinion of this Court, if the petitioner is entitled to refund of ₹ 11,36,800/- after making payment of ₹ 4,21,000/-, it is not understood as to why the respondents cannot itself adjust the amount of ₹ 4,21,000/- against the amount of ₹ 11,36,800/- already deposited by the petitioner on account of the Penalty Order dated 04 th January, 2018. The present writ petition is disposed of with a direction to the respondents to adjust the tax demand amounting to ₹ 4,21,000/- under DTVSV Act with the amount of ₹ 11,36,800/- already deposited by the petitioner on account of the Penalty Order dated 04 th January, 2018 on or before 31 st August, 2021 and refund the balance amount within a further period of four weeks.

Summary

Issues:
Adjustment of tax due under DTVSV Act with penalty amount already deposited and refund of excess amount.

Analysis:

1. The petitioner filed a writ petition seeking a direction to adjust the tax due under the Direct Tax Vivad Se Vishwas Act, 2020 (DTVSV Act) with the amount already deposited on account of a Penalty Order. The petitioner claimed suffering financial losses due to the inaction of the respondents and requested a time-bound refund of the excess amount.

2. The respondents argued that the penalty amount deposited by the petitioner cannot be adjusted against the tax due under the DTVSV Act as it has been adjusted against a legal and valid demand. They clarified that the petitioner would be entitled to a refund of the excess amount after making a payment under the DTVSV Act.

3. The Court noted that if the petitioner is entitled to a refund after making a payment under the DTVSV Act, there should be no hindrance in adjusting the amount already deposited against the tax demand. Consequently, the Court directed the respondents to adjust the tax demand with the deposited amount and refund the balance within a specified time frame.

4. The writ petition was disposed of with a direction to adjust the tax demand amounting to a specific sum under the DTVSV Act with the amount already deposited by the petitioner on account of the Penalty Order. The respondents were instructed to complete the adjustment and refund process within the stipulated time period.

5. The Court ordered the uploading of the judgment on the website and the forwarding of a copy to the respective counsel via email, thereby concluding the matter with the specified directions for adjustment and refund of the excess amount.