2024 (1) TMI 427 - HC - Income Tax

Seeking issuance of refund along with up-to-date interest - Petitioners states that despite absence of any demand outstanding against the Petitioner for AY 2000-01, refund due to the Petitioner for AY 2014-15 was adjusted against non-existent demand for AY 2000-01 due to inaction of the Respondents in passing the appeal effect order for AY 2000-01 - also stated no adjustment was called for on the said date of adjustment as the demand for AY 2000-01 already stood deleted and cancelled and no demand can be adjusted against the refund without passing a speaking order under Section 245 of the Act. HELD THAT - Keeping in view the limited relief sought in the present writ petitions, the same are disposed of with a direction to the Assessing Officer to pass an appeal effect order within four weeks and refund the amount along with interest, if any, in the petitioner s bank account within a further period of four weeks. Since learned counsel for the petitioner states that the rectification application for A.Y. 2015-16 dated 24th January, 2023 is most comprehensive, this Court directs the Assessing Officer to decide the same in accordance with law within four weeks, and refund the amount along with interest, if any, in the petitioner s bank account within a further period of four weeks.

Issues:
The judgment involves issues related to seeking refund for Assessment Year (AY) 2000-01 and AY 2015-16, passing of an appeal effect order for orders quashing reassessment proceedings, directions to dispose of rectification applications, violation of Article 265 of the Constitution of India and Section 237 of the Income Tax Act, adjustment of refunds against non-existent demands, legality of recovery and adjustment actions, and violation of Office Memorandums issued by CBDT.

Refund Issue (AY 2000-01 and AY 2015-16):
The petitioner filed writ petitions seeking refund for AY 2000-01 and AY 2015-16 along with interest. Despite the absence of any outstanding demand for AY 2000-01, a refund due for AY 2014-15 was adjusted against a non-existent demand for AY 2000-01 due to the inaction of the Respondents in passing the appeal effect order. The counsel argued that no adjustment should have been made as the demand for AY 2000-01 had already been deleted and cancelled. Various judgments were cited to support the claim that no demand can be adjusted against a refund without a speaking order under Section 245 of the Act.

Passing of Appeal Effect Order:
The petitioner in one of the writ petitions prayed for the passing of an appeal effect order regarding orders quashing reassessment proceedings for AY 2000-01. The counsel highlighted the non-issuance of the refund as a violation of Article 265 of the Constitution of India and Section 237 of the Act. It was argued that the recovery and adjustment actions, including adjusting refunds against outstanding demands and recovering amounts in excess of the demand for AY 2015-16, were illegal and violated Office Memorandums issued by CBDT.

Rectification Applications Issue:
In another writ petition, the petitioner sought directions for the disposal of rectification applications filed on various dates. The counsel contended that the recovery and adjustment actions carried out by the Respondents were illegal, especially without disposing of the application for stay of demand raised in an assessment order. The actions were also deemed to be in violation of Office Memorandums issued by CBDT.

Judgment Summary:
The High Court directed the Assessing Officer to pass an appeal effect order within four weeks and refund the amount with interest, if any, into the petitioner's bank account within a further four weeks. Additionally, the Assessing Officer was instructed to decide on the most comprehensive rectification application within four weeks and refund the amount with interest, if any, into the petitioner's bank account within another four weeks. The writ petitions were disposed of with these directions.

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