2023 (6) TMI 48 - HC - Income Tax

Set off and withholding of refunds u/s 245 - adjustment of the refund available u/s 2021-22 2022-23 against demand raised for AY 2017-18 - HELD THAT - We are told, that this appeal was filed on 20.01.2020. Also the submission of 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. As averred, that the said application, which is dated 29.01.2020, was lodged with the respondent no. 1 on 03.02.2020. 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. Petitioner says, he will have no objection if such a direction is issued by the concerned authority.It is ordered accordingly.The concerned authority will bear this in mind, and pass an appropriate order. 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.

Summary

Issues involved:
The issues involved in the judgment are related to the adjustment of refund against a demand raised for a specific assessment year without following the prescribed regime under Section 245 of the Income Tax Act, 1961. Additionally, the delay in adjudicating an appeal against the assessment order and an application for staying the demand further complicate the matter.

Adjustment of Refund Against Demand:
The petitioner's principal grievance was that the respondents/revenue adjusted the refund of Rs. 1,72,02,960/- for Assessment Year 2021-22 & 2022-23 against a demand of Rs. 2,52,59,189/- raised for Assessment Year 2017-18 without adhering to the procedures outlined in Section 245 of the Income Tax Act, 1961. The petitioner highlighted that an appeal against the assessment order concerning the demand for AY 2017-18 was pending before the Commissioner of Income Tax (Appeals) and an application for staying the demand had also been submitted but remained unaddressed. The court, considering the circumstances, proposed an adjustment of 20% of the demand raised for AY 2017-18 against the refund due for AY 2021-2022 & 2022-23, to which the petitioner had no objection.

Court's Decision and Directions:
With the consent of both parties, the writ petition was taken up for hearing and final disposal. The court directed the concerned authority to make the adjustment of 20% of the demand raised for AY 2017-18 against the refund due for AY 2021-2022 & 2022-23. It was ordered that the concerned authority should pass an appropriate order in this regard. The petitioner was granted liberty to seek an appropriate remedy if aggrieved by the decision on the application for stay of demand. The concerned authority was instructed to dispose of the application for stay of demand within three weeks from the receipt of the judgment. The writ petition was disposed of accordingly, and pending applications were to be closed. Parties were directed to act based on the digitally signed copy of the order.

Separate Judgment by Judges:
No separate judgment was delivered by the judges in this case.