2014 (5) TMI 1244 - HC - Income Tax

Adjustment entire refund against the outstanding demand - HELD THAT - As per the Instruction of the Board bearing number CBDT O.M. in F. No. 404/72/93-ITCC dated 29th February 2016 as modified by Board Instruction dated 31st July 2017 the Revenue can seek recovery of 20% of the demand and stay the balance demand. 20% of the demand of Rs. 1, 62, 74, 620/- comes to Rs. 32, 54, 924/- (Rs. 28, 21, 514/- Rs. 4, 33, 410/-). The balance amount of refund to be adjusted is Rs. 28, 21, 514/-. As a result a sum of Rs. 49, 34, 406/- (Rs. 77, 55, 920/- less Rs. 28, 21, 514/-) which is excess adjustment has to be refunded to petitioner. This refund shall be paid within four weeks from today. Balance demand to be stayed till the disposal of appeal by CIT (Appeals). Respondent no. 1 shall send the remand report within a period of sixty days from today. Since the appeal has been pending for almost nine years respondent no.5 shall dispose the appeal within a period of six months from today.

Summary

The Bombay High Court addressed the adjustment of a refund of Rs. 77,55,920/- for AY 2023-24 against an outstanding demand of Rs. 1,62,74,620/- for AY 2012-13. Pursuant to CBDT Board Instructions (O.M. F. No. 404/72/93-ITCC dated 29-02-2016, as modified on 31-07-2017), the Revenue is entitled to recover only 20% of the demand upfront (Rs. 32,54,924/-), with the balance demand stayed pending appeal disposal. The Court held that the excess adjustment of Rs. 49,34,406/- must be refunded to the petitioner within four weeks. The balance demand is stayed until the Commissioner of Income Tax (Appeals) disposes of the appeal, which the Court directed to be completed within six months. Respondent no.1 is ordered to submit the remand report within sixty days. The petition is disposed accordingly.