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TMI Blog2022 (3) TMI 1040X X X X Extracts X X X X X X X X Extracts X X X X ..... refunds against tax remaining payable.- Where under any of the provisions of this Act, a refund is found to be due to any person, the Assessing officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be , may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section." 3. Affidavit of respondent no. 4 refers to CPC Instruction No. 1 dated 27th November, 2012 issued pursuant to the directions passed by Delhi High Court in Writ Petition (Civil) No. 2659 of 2012 dated 31st August, 2012 which was Suo Motu taken up pursuant to the letter written by Chartered Accountant, drawing attention of the Court to the problem being faced by the assessees relating to adjustment of refund contrary to mandate of Section 245 of the Income Tax Act. Para-13 of the interim order, quoted under para-6 of the counter affidavit, is extracted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nds on the CPC-FAS. (v) The demands are also uploaded by system in the "My account" of the assessee on the www.incometaxefiling.gov.in website. (vi) In case of refund due on the basis of the demand so uploaded on CPC-FAS, CPC shall issue a prior intimation u/s 245 of the I.T.Act to the assessee to adjust the refund against the correct and legitimate actionable demands due. Simultaneously CPC will inform the Chief Commissioner of Income Tax concerned regarding the intimation sent for his charge fortnightly. The assessee can approach Assessing officer regarding grievance relating to demand, if any within 15 days of receipt of intimation. (vii) The assessing officer within 30 days of receipt of grievance in response to notice u/s 245 shall either rectify or confirm the demand. The demand so crystallized shall be communicated back to the CPC in reference to the same communication vide which the assessing officer was initially communicated regarding the demand. Functionality will be developed within the next six months to intimate CPC online by Assessing officer. In the interim period, assessing officer will intimate the CPC within 30 days from the date, the assessee approaches th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etails of outstanding demand and interest payable under Section 220(2) of the I.T. Act, which are proposed to be adjusted against the refund due for the Assessment Year 2016 being Rs. 12,41,45,840/-. Petitioner has submitted his online reply on 14th April, 2021 (Annexure-3) stating that rectification has been filed online with CPC and it would be filed with jurisdictional Assessing Officer. By Annexure-4, petitioner was intimated under Section 143(1) of the Act with respect to the return of income filed for the Assessment Year 2020-21 at page-77 of the writ petition. Annexure-4/1 intimation shows that the amount of refund of Rs. 22,85,16,240/- is due, which has been adjusted against the outstanding demand for the Assessment Years 2014-15; 2015-16 and 2016-17. This has aggrieved the petitioner to approach this Court. 7. According to learned counsel for the petitioner, there was no intimation for adjustment against outstanding demand for the Assessment Years 2014-15 and 2015-16. Even as per intimation for adjustment against outstanding demand for the Assessment Year 2016-17, petitioner was entitled to get 30 days period to pay the outstanding demand before which such adjustme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner, any adjustment beyond 20% amount required to be deposited for keeping the demand in abeyance pending disposal of the appeal, cannot be made in view of the opinion rendered by Bombay High Court in the case of Andrew Telecommunications India (P.) Ltd. Vs. Principal Commissioner of Income-tax, Goa. reported in [2017] 77 taxmann.com 312 (Bombay). 8. Respondent nos. 1, 2 and 3 have filed counter affidavit while respondent no. 4 has filed separate counter affidavit. As per respondent nos. 1 to 3, intimation under Section 245 of the Act was sent on 31st March, 2021 to the petitioner and adjustment of refund against the outstanding demands were raised on 23rd April, 2021 by CPC, Bengaluru. The petitioner has submitted his response online to CPC, Bengaluru on 14th April, 2021 but not before jurisdictional officer- respondent no. 3. The contention of the petitioner relating to adjustment against the demand due for different Assessment Years 2014-15, 2015-16 and 2016-17 against the intimation dated 31st March, 2021 are dealt with under Para-22 of the counter affidavit. As regards, the Assessment Year 2016-17, it is the case of respondent nos. 1 to 3 that no rectification petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d 2015-16 is concerned, it is stated at Para-11(iv) that earlier intimation was issued on 8th January, 2020 and 17th January, 2020 proposing the adjustment against the outstanding demand for the said Assessment Year. However, this statement under sub para-6 has been clarified at para 26 of the counter affidavit that intimation under Section 245 of I.T. Act had earlier been issued for adjustment against the demand due for the assessment year 2014-15 and 2015-16 although pertaining to the Assessment Years 2002-03; 2003-04 and 2004-05. 11. It needs to be mentioned here that these intimations dated 8th January, 2020 and 17th January, 2020 do not relate to the subject matter of the present writ petition. Petitioner has filed rejoinder affidavit to both counter affidavits and also rejoinder to the supplementary counter affidavit of respondent nos. 1 to 3, wherein the respondents have brought on record the screen shots showing refund status adjusted on 23rd April, 2021. This concludes the narration of facts so far as W.P.(T) No. 2073 of 2011 is concerned. W.P. (T) No. 2851 of 2021 12. The grievance of the writ petitioner in the instant writ petition relates to adjustment of outstanding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the petitioner showing the amount of refund adjusted against outstanding demand for the Assessment Year 2014- 15 is as under: Particulars Amount (in Rs.) Refund for Assessment Year 2002-03 adjusted 24,29,496 Refund for Assessment Year 2003-04 adjusted 35,34,072 Refund for Assessment Year 2004-05 adjusted 10,88,259 Refund for Assessment Year 2005-06 adjusted 5,32,81,263 Refund for Assessment Year 2006-07 adjusted 3,50,94,902 Refund for Assessment Year 2007-08 adjusted 5,52,51,780 Total: 15,06,79,772 14. The fact that no intimation for adjustment of the refund due against Assessment Years 2005-06, 2006-07 and 2007-08 was given to the petitioner, is not in dispute by the respondent. Learned counsel for the respondent Mr. Rahul Lamba has, however, submitted that petitioner was under intimation for the Assessment Years 2002-03, 2003-04 and 2004-05 against the outstanding demand for the Assessment Year 2014-15 which had crystalized. As such, any adjustment made against the refund due for the subsequent assessment years could not cause any prejudice to the petitioner. However, learned counsel for the respondent does not dispute on facts that there was no intima ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remaining payable.- Where under any of the provisions of this Act, a refund is found to be due to any person, the Assessing officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or Chief Commissioner or Commissioner, as the case may be , may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section." 12. Mere perusal of the section makes it clear that the officers mentioned in the section, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under the Act by the assessee to whom the refund is due. The officer may set off the amount to be refunded or any part of that amount only after giving an intimation in writing to the assessee of the action that he proposed to take under this section. Therefore it clearly requires the intimation to be given prior to the officer sets off the amount payable against the amount to be ref ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sputed before CIT (A), the following modified guidelines are being issued in partial modification of Instruction No. 1914: (A) In a case where the outstanding demand is disputed before CIT (A), the assessing officer shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand, unless the case falls in the category discussed in para (B) hereunder (B) to (D) ** E. In granting stay, the Assessing Officer may impose such conditions as he may think fit. He may, inter alia,: (i) require an undertaking from the assesse that he will cooperate in the early disposal of appeal failing which the stay order will be cancelled; (ii) reserve the right to review the order passed after expiry of reasonable period (say 6 months) or if the assesse has not cooperated in the early disposal of appeal or where a subsequent pronouncement by a higher appellate authority or court alters the above situations; (iii) reserve the right to adjust refunds arising, if any, against the demand, to the extent of the amount required for granting stay and subject to the provisions of Section 245. 9. It can thus be seen that under para 4(A) of the O.M., a case where outs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... January, 2020, 17th January, 2020 or 31st January 2020, referred to above in the respective writ petitions, are in a proper format, as required under Section 245 of I.T. Act, the letters at Annexure-22 or 10/2 are in fact communication on the subject of stay of recovery proceedings against the outstanding demand for the assessment year, whereunder the department has reserved its right to adjust the refund due against the demand for relevant assessment year. Department cannot follow different practices or format for compliance of the statutory mandate of the act. 18. It needs to be pointed out at this stage that learned counsel for the respondents during course of their submissions on instruction from CPC, Bangalure, have stated that revised intimation under Section 245 can be issued from CPC portal incorporating all the demands which were adjusted out of refund due if liberty is allowed to the respondents to do so, in accordance with law. 19. We have given anxious consideration to the legal question raised at the outset in the factual canvass of the case, discussed hereinabove. As an offshoot of the aforesaid discussions, it is clear that adjustments have been made by the depart ..... X X X X Extracts X X X X X X X X Extracts X X X X
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