2024 (7) TMI 1630 - HC - Income Tax

Adjustment of refund due - as noted that as per established procedure upon payment of 20% of the demand the remaining 80% is stayed - contention of the petitioner that the entirety of refund was adjusted and in light of their application for stay if the demand for 2015-16 and 2016-17 is stayed the question of adjustment of entirety of refund would not arise. HELD THAT - It is not in dispute that the application for stay was filed on 11.01.2024 as regards assessment year 2015-16 and on the same date i.e. on 11.01.2024 application for stay was filed as regards the assessment year 2016-17. As on the date of filing of the application for stay the petitioner had the benefit of order of refund for the year 2023-24. If as on the date of filing the application for stay dated 11.01.2024 if the petitioner had made payment of 20% remaining 80% would have been stayed. In light of adjustment at Annexure-P only manner of moulding the relief would be adjustment of refund to an extent of 20% of the demand for the year 2015-16 and 2016-17. Once adjusted the remaining amount of 80% of refund adjusted towards demand requires to be reversed by crediting the same to the petitioner. Accordingly the third respondent is directed to refund the amount of 80% of the demand for the assessment year 2015-16 and 2016-17 as already been adjusted. Such refund to be made within a period of eight weeks from today.

Summary

The Karnataka High Court, through HON'BLE MR JUSTICE S SUNIL DUTT YADAV, addressed the petitioner's claim seeking directions for refund of Rs. 1,99,98,090/- adjusted against demands for assessment years 2015-16 and 2016-17 from the refund due for 2023-24. The petitioner challenged assessment orders dated 26.05.2023 (2016-17) and 16.02.2024 (2015-16), having filed stay applications on 11.01.2024 for both years. The court noted that as per established procedure, upon payment of 20% of the demand, the remaining 80% is stayed. Since the entire refund was adjusted against these demands, the court held that only 20% adjustment was justified. It ordered the third respondent to refund 80% of the amount already adjusted within eight weeks, emphasizing that "the remaining amount of 80% of refund adjusted towards demand requires to be reversed by crediting the same to the petitioner." The petition was accordingly disposed of.