2001 (3) TMI 39

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..... writ petition because of the admitted position that no prior intimation for adjustment and/or setting off under section 245 of the Income-tax Act, 1961, was given to the writ petitioner for the relevant assessment year of 1991-92. The first point is whether such an adjustment and/or setting off is permissible under the law or not and the next point, if not, then whether declaration dated December .....

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..... 991-92 is wholly illegal and in breach of the principles of natural justice inbuilt in the aforesaid section itself as it will appear from the language, "after giving an intimation in writing to such person of the action proposed to be taken under this section". To be informed with reason before being affected with civil consequences is one of the facets of the principles of natural justice. Admit .....

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..... he aforesaid action of adjustment in the manner as above. Therefore, same is set aside and I direct the refund of the amount which has been adjusted together with interest at the statutory rate. Therefore, the demand revives and both the parties will be entitled to take steps in accordance with law. As far as declaration mentioned in prayer (a)(iii) is concerned, in my view, the same is premature .....

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