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2019 (10) TMI 263 - HC - Income TaxRefusal of refund of excess paid as income tax - HELD THAT:- What the Petitioner seeks to convey, as urged by the Petitioner, is that if the amount is refunded, they have no objection for adjustment of ₹ 82 Crores. Second, the sentence does not convey that any time in future the amount can be adjusted without notice depriving the Petitioner of opportunity to point out changed circumstances if any. By bare perusal of the letter, we are of the opinion that both the submissions of the Petitioner are correct. The Respondents have relied on the above-underlined sentence. However, the Respondents have noted only the first part regarding the adjustment of refund of 82 crores. It does not acknowledge the subsequent part of the sentence regarding the release of the due balance. Request for return of ‘long overdue refunds’ is reiterated in the subsequent sentence. That the Petitioner earlier did not object does not mean that the Respondents can make this sentence as a foundation to deviate from the mandate of prior notice under Section 245 of the Act all time to come. Almost one and a half years had passed, and there were subsequent events that could be pointed out. Since no prior notice was issued to the Petitioner before adjusting the refund, there was a breach of the requirement under section 245. The letter dated 19 February 2018 cannot be made the basis of deviating from the mandate under section 245. The sequitur is that the impugned communication adjusting the amount must be quashed and set aside. So also the notice dated 31 July 2019 under Section 245is set aside with liberty to the Deputy Commissioner of Income Tax to issue a fresh notice under Section 245 of the Act.
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