2020 (10) TMI 843 - HC - Income Tax

Refund of interest u/s 244A - PCIT directing the petitioner to pay entire tax demand pertaining to the disallowance made on account of other provisions and provisions of contingencies pending the disposal of the appeal - HELD THAT - Petitioner has no objection if the amount directed to be deposited by the Principal Commissioner of Income Tax-06 is adjusted against the aforesaid refund of interest pending disposal of the appeal filed by the petitioner and the balance amount is paid within reasonable time. This Court is also of the view that the prayer made by the petitioner is fair and reasonable. Accordingly, respondents are directed to adjust the demand raised vide impugned order dated 10th August, 2020 against the refund of interest u/s 244A for assessment year 2008-2009 and pay the balance amount to the petitioner within eight weeks.

Summary

Issues involved:
1. Compliance with court order to release interest under section 244A of the Income Tax Act, 1961.
2. Challenge against the order directing payment of tax demand for disallowance made on account of 'other provisions' and contingencies.

Compliance with court order to release interest under section 244A:
The petitioner filed an application seeking directions for compliance with a court order dated 14th November, 2019, to release interest under section 244A of the Income Tax Act, 1961. The petitioner claimed the interest due for the assessment year 2008-2009 to be ?26,64,63,987. The Principal Commissioner of Income Tax-06 had directed the petitioner to pay the entire tax demand related to disallowances and contingencies pending appeal. The petitioner agreed to adjust the amount directed for deposit against the interest refund and pay the balance within a reasonable time. The respondents did not admit to the calculations but did not object to the petitioner's request. The court found the petitioner's prayer fair and reasonable, directing the respondents to adjust the demand against the interest refund and pay the balance to the petitioner within eight weeks. Consequently, the applications and the petition were disposed of, with the order to be uploaded on the website and forwarded to the counsel via email.

Challenge against the order directing payment of tax demand:
The petitioner also challenged an order dated 10th August, 2020, by the Principal Commissioner of Income Tax-06, directing the payment of the entire tax demand for disallowances and contingencies pending appeal. The petitioner sought adjustment of the amount against the interest refund due for the assessment year 2008-2009. The respondents did not contest the petitioner's claim, and the court directed the adjustment of the demand against the interest refund, with the balance to be paid within eight weeks. As a result, the challenge against the order was resolved along with the other applications, and the court ordered the dissemination of the judgment on the website and via email to the counsel.