2018 (2) TMI 1465 - HC - Income Tax

Adjustment of refund against next assessment year - Held that - According to the counsel for the petitioner thus after the adjustment for the refund of the earlier year the deposit towards disputed tax liability for the current year would exceed 20%. Counsel for the Revenue do not dispute this factual assertion of the petitioner. In view of these developments no further relief would be needed to enable the petitioner to enjoy the stay pending appeal for the current assessment year since the insistence of the Principal Commissioner vide his impugned communication dated 19.07.2017 in any case stands fulfilled.

Summary

Issues Involved:
1. Stay pending appeal on payment of disputed tax liability.
2. Adjustment of refund against tax liability for a different assessment year.

Analysis:

Issue 1: Stay pending appeal on payment of disputed tax liability
The petitioner approached the High Court after the Chief Commissioner of Income Tax required them to pay 20% of the demand from the assessment order to grant a stay pending appeal. The petitioner argued that a circular prescribing a 15% deposit was issued earlier and should prevail over the subsequent circular prescribing a 20% deposit. The High Court, considering the substantial tax liability, granted interim relief by allowing the petitioner to deposit 10% of the disputed tax amount to protect them against recoveries.

Issue 2: Adjustment of refund against tax liability for a different assessment year
During the hearing, the petitioner's counsel informed the court that an assessment for the year 2011-12 resulted in a refund claim of ?11,96,420. The Revenue authorities intended to adjust this refund against the petitioner's liability for the assessment year 2013-14, which was the subject of the current case. The petitioner's counsel argued that after this adjustment, the deposit towards the disputed tax liability for the current year would exceed 20%. The Revenue authorities did not dispute this assertion.

The court noted that with the adjustment of the refund from the earlier year, the petitioner's deposit towards the disputed tax liability for the current assessment year would exceed the required 20%. Consequently, the need for further relief to enable the petitioner to stay pending appeal for the current assessment year was no longer necessary, as the Principal Commissioner's communication insisting on the deposit had been fulfilled. The court directed that the appellate authority would decide the petitioner's appeal in due course. As a result, the petition was disposed of accordingly.