9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (9) TMI 1734 - HC - Income TaxRefund being demand recovered in excess of 20% of the demand - HELD THAT - Petitioner filed an appeal on 29.04.2015 and multiple stay applications were also filed by him between 05.05.2015 and 30.11.2016 and the petitioner is making earnest efforts to get the appeals as well as the stay applications disposed of. In this context perusal of the Circular/Office Memorandum dated 31.07.2017 will indicate that in the event the petitioner deposits 20% by way of pre-deposit there shall be stay of demand till disposal of the appeal by the Appellate Authority. However in the instant case despite the petitioner having filed the appeal as long back as in the year 2015 and multiple stay applications between 2015 to 2016 the Assessing Officer has neither passed any orders on the stay applications nor as the Appellate Authority disposed of the appeals. The respondents were clearly not justified in adjusting the refund amounts payable to the petitioner in excess of 20% and consequently necessary directions have to be issued to the respondents to refund the entire amounts payable to the petitioner in excess of 20% of the demand for the assessment year 2012-13 within a stipulated time frame and by directing respondent No. 1 to dispose of the appeals within a stipulated time frame. Order - The concerned respondents are directed to refund the entire amount in excess of 20% of the demand raised for the assessment year 2012-13 together with the applicable interest back to the petitioner after due verification within a period of six weeks from the date of receipt of a copy of this order. The concerned respondent / Appellate Authority is directed to dispose of the appeal within a period of three months from the date of receipt of a copy of this order.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Court in this matter include:
2. ISSUE-WISE DETAILED ANALYSIS Issue 1: Legality of Adjustment of Refunds Exceeding 20% of Demand Relevant Legal Framework and Precedents: The Office Memorandum dated 31.07.2017, issued under Section 220 of the Income Tax Act, 1961, provides that a pre-deposit of 20% of the demand raised is sufficient for obtaining stay of demand pending appeal before the Appellate Authority. The petitioner relies on a recent judgment of the same High Court (W.P. No. 9835/2024 dated 23.07.2024), which held that adjustment of refunds beyond the 20% pre-deposit amount is impermissible. Court's Interpretation and Reasoning: The Court found it undisputed that the petitioner had filed an appeal on 29.04.2015 and multiple stay applications between 05.05.2015 and 30.11.2016. Despite this, the Assessing Officer and the Appellate Authority had neither disposed of the stay applications nor the appeals. Instead, the respondents proceeded to adjust amounts in excess of the 20% pre-deposit limit against the refunds due to the petitioner. The Court held that such adjustment is "clearly impermissible in law" in light of the Office Memorandum and the precedent judgment. Key Evidence and Findings: The petitioner's appeal and stay applications were pending for several years without adjudication. The respondents adjusted refunds exceeding the 20% pre-deposit limit, contrary to the prescribed legal framework. The Court also examined the facts of a similar case (W.P. No. 9835/2024) where the refund was adjusted against demands for subsequent assessment years, and the Court ordered refund of the excess amount adjusted beyond 20%. Application of Law to Facts: Applying the Office Memorandum and the precedent, the Court concluded that the respondents' action of adjusting amounts exceeding 20% of the demand was unlawful. The petitioner was entitled to refund of the excess amount adjusted. Treatment of Competing Arguments: The respondents contended that the appeals would be disposed of expeditiously. However, the Court noted the prolonged pendency of appeals and stay applications, which justified intervention. The Court did not accept the respondents' submission as a reason to permit excess adjustment. Conclusion: The respondents were directed to refund the amounts adjusted in excess of 20% of the demand, together with applicable interest, within six weeks. Issue 2: Obligation to Dispose of Appeals and Stay Applications Expeditiously Relevant Legal Framework and Precedents: The principle of expeditious disposal of appeals and stay applications is implicit in the tax adjudication process to prevent undue hardship. The Office Memorandum and judicial pronouncements emphasize timely disposal to avoid prolonged uncertainty. Court's Interpretation and Reasoning: The Court observed that the petitioner had filed the appeal in 2015 and multiple stay applications thereafter, yet the appellate authority had not disposed of them. This delay was unacceptable and warranted a direction for disposal within a fixed time frame. Key Evidence and Findings: The record showed pendency of appeals and stay applications for several years without adjudication. The Court also noted the petitioner's continuous efforts to secure disposal. Application of Law to Facts: The Court applied the principle of timely adjudication and the need to avoid prejudice to the petitioner's rights by undue delay. Treatment of Competing Arguments: The respondents' assurance to dispose of appeals expeditiously was found inadequate without a fixed timeline. Conclusion: The respondents were directed to dispose of the appeal within three months from the date of receipt of the order. Issue 3: Restraining Enforcement of Balance Demand Until Appeal Disposal Relevant Legal Framework and Precedents: The stay provisions under the Income Tax Act and the Office Memorandum provide that demand enforcement should be stayed if the pre-deposit is made and the appeal is pending. Court's Interpretation and Reasoning: Given the pendency of appeal and the petitioner's compliance with pre-deposit requirements, the Court found it just to restrain enforcement of the balance demand until the appeal disposal and for a short period thereafter. Key Evidence and Findings: The demand notice dated 31.03.2015 was under challenge, and the petitioner had complied with the pre-deposit requirement. Application of Law to Facts: The Court balanced the interests of the revenue and the petitioner, ensuring that the petitioner is not subjected to coercive recovery measures during the pendency of appeal. Treatment of Competing Arguments: The respondents did not oppose this relief explicitly. Conclusion: The respondents were restrained from enforcing the balance demand until three weeks after disposal of the appeal. 3. SIGNIFICANT HOLDINGS The Court crystallized the following principles and determinations:
The Court's final determinations were:
|
