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TMI Blog2015 (7) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Revenue, in the considered opinion of this Court. As such, this Court to prevent an aberration of justice and to promote substantial cause of justice, quashes the intimation dated 24.03.2014 under Section 245 of the Income Tax Act in respect of Assessment Year 2008-2009 (Against dues of Assessment year 2011-2012) the intimation dated 22.04.2014 for Adjustment of Refund in respect of Assessment Years 2009-2010 and 2010-2011 (Against dues of Assessment Year 2011-2012); the intimation dated 24.03.2014 for adjustment of Refund for Assessment Year 2012-2013 (Against dues of Assessment Year 2011-2012). At this stage, this Court makes it abundantly clear that it has not dealt with the merits of the matter pertaining to the Stay Application against recovery of taxes etc. Therefore, this Court disposes of the Writ Appeals only by quashing the Intimation Notices issued under Section 245 of the Income Tax Act for Adjustment of Refund in respect of Assessment Years mentioned supra and leaving it open to the respective parties to raise all factual and legal issues in respect of the subject matter in issue, i.e., aspect of payment / Retention of 'Refund etc.,' and it is open to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent of the facts placed before him and also contrary to the well settled principles with regard to Law on Taxation . 5. The Learned Counsel for the Appellants urges before this Court that the Learned Single Judge proceeded on the basis that refunds were to be granted to the Respondent/Assesse in respect of Assessment Years 2008-2009, 2009-2010, 2010-2011 and 2012-2013 notwithstanding the statutory mandate enjoined under Section 245 of the Income Tax, 1961. 6. Advancing his arguments, the Learned Counsel for the Appellants emphatically projects an argument that Section 245 of Income Tax Act provides that where under any circumstances refund becomes due to an assesse, the Assessing Officer is expected to adjust the same as against other outstanding dues pending under the Act. Furthermore, in the present case, although the aforesaid Assessment Years resulted in refund, there is a subsistence demand in regard to the Assessment Year 2011-2012 and therefore, the Assessing Officer is entitled to adjust the subsisting demand for 'Assessment Year' 2011- 2012 with the refunds available after intimation. 7. Expatiating his contention, the Learned Counsel for the Appellants s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t arise. 13. Apart from the above, the plea taken on behalf of the Appellants is that the Learned Single Judge while passing the Impugned Order in the Writ Petitions had over looked the material documents submitted by the Revenue at the time of hearing the Writ Petitions which revealed that later, the 1st Appellant had disposed of the Stay Application under Section 220(6) of the Income Tax Act after hearing the Respondent/Assesse on 05.06.2014 which is the correct course adopted, as the Appeal was pending on that date. 14. The Learned Counsel for the Appellants takes a prime stand that the Learned Single Judge was carried away only by the single factor that refunds had accrued to the Respondent/Assesse for various other 'Assessment Years' and the action of the 1st Appellant by resorting to Section 245 of the Income Tax Act and adjusting the same for any new subsisting due could not be validly carried out, which is an erroneous interpretation and would defeat the intent of said Section of the 245 of the Act. That part, positive direction issued by the Learned Single Judge to process the refund claim of the Respondent/Petitioner and to sanction refund within two weeks r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2011- 2012 (Subsequent Assessment Year) on the very same issues once again, which is in violation of Doctrine of Judicial Discipline done with a sole motive to deny a refund legitimately due to the respondent. 19. It is further represented on behalf of the Appellants that the Respondent / Petitioner had appealed against the aforesaid Assessment Order to the Commissioner of Income Tax (Appeals) and also filed a Stay Petition/Application with the Department against recovery of taxes pending disposal of the Appeal. 20. The Learned Counsel for the Appellants contends that the Appellant's Department had confirmed and sanctioned the 'Refund' due to the Respondent as per refund order, but, failed to issue the Cheque for the same. Moreover, the Appellant's Department had ignored the Stay Application conveniently against the recovery of taxes and proceeded to Assess Statement which was already sanctioned to the Respondent/Petitioner against the Official demand raised on it. Further, the Learned Single Judge while passing orders in the Writ Petition had only directed the payment of refund already sanctioned and had not passed Orders for sanctioning the refund ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re tax gatherer but as a quasi judicial authority vested with the public duty of protecting the interests of the Revenue while at the same time balancing the need to mitigate hardship to the assessee. Though the Assessing Officer has made an assessment, he must objectively decide the application for stay considering that an appeal lies against his order: the matter must be considered from all its facets, balancing the interest of the assessee with the the protection of the Revenue... (b) In the decision Maruti Suzuki India Ltd., V. Deputy Commissioner of Income Tax reported in (2012) 347 ITR at Page 43 (Delhi) at Special Pages 44 and 45, it is observed and held as follows:- Each assessment year is treated as separate and independent under the Income-tax Act, 1961. Section 245 of the Act permits the Revenue to recover the demand of one year which is pending by adjusting the refund due for another year. The term refund has not been defined in the Act and, therefore, it has to be understood and interpreted in the manner in which it is understood in day-to-day life. The term recovery in common parlance includes adjustments. The word recovery is comprehensive and includes both co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l course, the refunds should have been paid by the authorities to the petitioner but for the adjustment against the demand for the assessment year 2006-07. An application for stay was dismissed. 23. At this stage, it is to be borne in mind that Section 245 of the Income Tax Act does not either in express terms or by necessary implication require that the assesse should be in default either within the ordinary meaning of that expression or as that expression has been defined by Section 220 of the Act as per decision (S.RM.AR.RM.Ramanathan Chettiar V. Additional I.T. Officer (1956) 29 ITR at Page 683 (Mad)). 24. As a matter of fact, the procedure enunciated under Section 245 of the Income Tax Act is mandatory, just and fair and the assesse in question cannot be made to suffer for the incorrect or wrong uploading of arrears and wrong and incorrect adjustment of refund on the part of the respondents (Court on its own Motion v. CIT: All India Federation of Tax Practitioners v. Union of India reported in (2013) 352 ITR 273 (Del)) 25. Furthermore, in the decision Cognizant Technology Solutions India P.Ltd., V. Deputy CIT reported in (2013) 356 ITR at page 373 (Madras), it is hel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proposed action. Shri Devadhar, learned counsel appearing on behalf of the respondents, had to concede that the Income-tax Officer did not give any intimation to the petitioner before making adjustment while passing the assessment order for the assessment year 1983 -84. In my judgment, the action of the Income-Tax Officer is wholly illegally and the respondents were clearly in error in not refunding the amount of ₹ 4,26,090 to the petitioner forthwith. Accordingly, the petition succeeds and the rule is made absolute and the respondents are directed to refund the amount of ₹ 4,26,090 to the petitioner within a period of two weeks from today. The respondents shall ensure that the refund order is actually handed over to the petitioner before the expiry of two weeks. The respondents shall pay the costs of the petition. 28.That apart, this Court pertinently points out the decision Pankaj Dutta V. Income Tax Officer and Another reported in (2010) 235 CTR (J K) at Pages 110 and 111 whereby and whereunder in Paragraph Nos.8 to 10, it is observed and held as follows:- A close reading of the provision of S.220(6) would clearly indicate that the AO in his discretion onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... template a show-cause notice or an inquiry, but at the same time, it requires a prior intimation in writing, of the proposed action of adjustment. Admittedly, such a notice was not given to the petitioner. 9. Learned counsel for the petitioner has drawn our attention to various judgments : They are (1) A.N.Shaikh V. Suresh B.Jain (1987) 165 ITR 86 (Bom) J.K.Industries Ltd. V. CIT (1999) 239 ITR 421 (P H); (3) J.K.Industries Ltd., (2000) 245 ITR 457 (Cal) and (5) Shiv Narain Shivhare v. Asst.CIT (Investigation) (1996) 222 ITR 620(MP) 10. Since there has been no intimation in terms of section 245 of Act, therefore, the petitioner has been deprived of his right to raise any objections to the order of adjustment. Therefore, the intimation to the extent of adjusting the amount, is quashed.... 30.Besides the above, in the decision of Sitaldas K.Motwani V. Director General of Income-tax (International Taxation), New Delhi (2010) 187 TAXMAN 44 (Bom) at Page 44 at Special Page 50 in Paragraph No.16, it is observed and held as under : .....16. Whether the refund claim is correct and genuine, the authority must satisfy itself that the applicant has a prima facie correct and genu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion dated 24.03.2014 under Section 245 of the Income Tax Act in respect of Assessment Year 2008-2009 (Against dues of Assessment year 2011-2012) the intimation dated 22.04.2014 for Adjustment of Refund in respect of Assessment Years 2009-2010 and 2010-2011 (Against dues of Assessment Year 2011-2012); the intimation dated 24.03.2014 for adjustment of Refund for Assessment Year 2012-2013 (Against dues of Assessment Year 2011-2012). 35. At this stage, this Court makes it abundantly clear that it has not dealt with the merits of the matter pertaining to the Stay Application against recovery of taxes etc., Also this Court not delved deep into the matter as to whether any Stay Petition is there as on date because of the reason that this Court is not deciding the aspect of Stay Application in the present Writ Appeals. 36. Therefore, this Court disposes of the Writ Appeals only by quashing the Intimation Notices (On the above mentioned dates) issued under Section 245 of the Income Tax Act for Adjustment of Refund in respect of Assessment Years mentioned supra and leaving it open to the respective parties to raise all factual and legal issues in respect of the subject matter in issue ..... X X X X Extracts X X X X X X X X Extracts X X X X
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