In a recent ruling, a Division bench of the Delhi High Court has directed the adjustment of a refund against an income tax demand.
The petitioner in the case, Infres Methodex Private Limited, raised contended that the respondents, namely the Assistant Commissioner of Income Tax, Circle 12(1) Delhi, and others, adjusted a refund of Rs. 1,72,02,960/- for Assessment Year (AY) 2021-22 & 2022-23 against the demand raised for AY 2017-18 without following the regime set forth in Section 245 of the Income Tax Act, 1961.
It was disclosed that the demand raised against the petitioner for AY 2017-18 amounted to Rs. 2,52,59,189/-. The petitioner had filed an appeal against the assessment order concerning the demand with the Commissioner of Income Tax (Appeals), which was still pending adjudication.
Furthermore, the petitioner had lodged an application for staying the demand for AY 2017-18 with the concerned authority, but it had not been addressed. The application, dated 29.01.2020, was submitted to the respondent on 03.02.2020.
Considering the circumstances, the High Court Bench of Justice Rajiv Shakdher and Justice Girish Kathpalia queried the petitioner’s counsel about their objection if the refund due for AY 2021-2022 & 2022-23 was adjusted by 20% of the demand raised for AY 2017-18. The petitioner’s counsel expressed no objection and agreed to such a direction.
Consequently, the High Court ordered the concerned authority to adjust the refund accordingly and emphasized that the authority should pass an appropriate order in this regard. The petitioner was granted liberty to seek an appropriate remedy if aggrieved by the decision on the application for stay, as per the law.
The concerned authority was directed to dispose of the application for stay of demand at the earliest, not later than three weeks from the receipt of a copy of the judgment.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
