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2021 (7) TMI 227 - HC - Income TaxTax refund adjustment towards the arrears of the tax - respondent authorities have applied the refund tax towards penalty only but not towards the arrears of tax - HELD THAT:- On a conspectus of material on record, we find the action of the respondents in adjusting the tax refund towards penalty is legally impermissible. As rightly argued by the learned counsel for petitioner, the circular of the Board F.No.149/145/98-TPL dated 03.09.1998 is clear on this aspect. Division Bench set aside the method adopted by the Department and directed the 1st respondent therein to issue a fresh Certificate of Intimation in the light of the order of the Division Bench. Needless to emphasise that the above decision applies with all its fours to the case on hand. This writ petition is allowed and the respondent authorities are directed to adjust the tax refundable to the petitioner for the year 1996-97 to the tax arrears instead of penalty and accordingly, re-determine the amount payable by the petitioner under Section 90(1) of the Finance (No.2) Act, 1998 and grant certificate expeditiously, but not later than four (4) weeks from the date of receipt of a copy of this order
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