2016 (4) TMI 256 - HC - Income Tax

Notice under Section 245 - Held that - Since the primary basis for adjustment is a notice under Section 245 of the Act and the Department cannot demonstrate that such notice was issued to the petitioner, the purported adjustment sought to be made stands set aside.

Summary

Issues: Refund of assessed amounts for specific years, adjustment against past dues, issuance of notice under Section 245 of the Income Tax Act, 1961, sufficiency of Department's report, validity of adjustment, costs to be paid by the Department.

The judgment addresses the grievance of the petitioner regarding the non-payment of refunds for the assessment years 2012-13 and 2013-14, which were allegedly adjusted against past dues without proper notice under Section 245 of the Income Tax Act, 1961. The petition was filed, and the Department was directed to submit a report, which was found to be inadequate and lacking details. Subsequently, an affidavit-in-opposition was requested, but the Department's belated affidavit was not accepted due to non-payment of costs. As the Department failed to demonstrate the issuance of a notice under Section 245, the adjustment made was set aside. The court allowed the petition, directing the Department to refund the amounts due for the specified assessment years without any adjustment against past dues. However, the Department retained the right to claim any previous amounts owed by the petitioner upon raising a valid demand in accordance with the law. Additionally, the Department was ordered to pay costs amounting to &8377; 10,000 to the petitioner within a fortnight from the date of the judgment. The judgment also mandated the provision of urgent certified website copies of the order to the parties upon request, subject to compliance with necessary formalities.