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AJANTA MANUFACTURING LIMITED Versus DEPUTY COMMISSIONER OF INCOME TAX - MORBI CIRCLE

2015 (11) TMI 546 - GUJARAT HIGH COURT

Grant of refund with interest - department seek to adjust the refund with subsequent demand - Held that:- Petitioner is entitled to a direction to the respondent to forthwith refund to it the entire amount of refund without any adjustment being made against such amount, inasmuch as, the respondent cannot be permitted to take advantage of his own wrong in not refunding the amount due and payable to the petitioner at the appropriate time in terms of the provisions of the Act, and then seek to set .....

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77; 17,08,78,351/- to the petitioner together with interest under section 244A of the Act in accordance with law, without making any adjustment in relation to any demand which arises after the date of this order. - Decided in favour of assessee. - SPECIAL CIVIL APPLICATION NO. 13761 of 2015 - Dated:- 5-11-2015 - MS. HARSHA DEVANI AND MR. A.G.URAIZEE, JJ. FOR THE PETITIONER : MR JP SHAH, ADVOCATE for MR MANISH J SHAH, ADVOCATE FOR THE RESPONDENT : MR PRANAV G DESAI, ADVOCATE ORAL JUDGMENT (PER : .....

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sue a writ of mandamus or any other appropriate writ, order or direction asking the respondent to refund the above amount of ₹ 17,08,78,351/- with interest thereon under section 244A within a period of 15 days from the date of order. (C) this Hon ble Court be pleased to stay proceedings under section 154 by notices at Annexures F1 and F2 till the above refund with interest is given to the petitioner and to stay penalty proceedings under section 271(1)(c) initiated by notices at Annexures G .....

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order of the CIT (A) Period for which refund is due 1. 2007-08 2,20,22,351 29.12.2010 4 years 8 months 2. 2008-09 27,22,485 28.03.2013 2 years 5 months 3. 2009-10 9,00,80,173 28.03.2013 2 years 5 months 4. 2010-11 2,37,90,191 04.09.2014 1 year 5. 2011-12 2,99,18,470 29.01.2015 6 months 6. 2012-13 23,44,681 15.04.2015 (date of adjustment of refund of A.Y. 2013-14 3 months 3. Pursuant thereto, the petitioner addressed letters to the respondent to give refund of the amount payable pursuant to the s .....

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er section 244A of the Income Tax Act, 1961 (hereinafter referred to as the Act ). It appears that the petitioner did not receive any reply from the Chief Commissioner of Income Tax but saw a letter addressed by the Chief Commissioner to the Assessing Officer instructing him to refund the above amounts before 15.6.2015. However, no such refund was granted till 15.6.2015 or even later but on the contrary, the petitioner received two notices under section 154 of the Act dated 31.7.2015 for assessm .....

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defeat the payment of refund. It is in these circumstances that the petitioner has filed the present petition. 4. Mr. J. P. Shah, learned counsel for the petitioner invited the attention of the court to section 240 of the Act which provides for refund on appeal, etc. and lays down that where, as a result of any order passed in appeal or other proceeding under the Act, refund of any amount becomes due to the assessee, the Assessing Officer shall, except as otherwise provided in the Act, refund t .....

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ordered the Assessing Officer to give refund within a specified period, failing which he was ordered to pay the sum with interest at the rate of 24%. It was submitted that the respondent has no legal authority to retain the amount which is to be refunded to the petitioner and, therefore, necessary directions be issued to the respondent to forthwith refund such amount. It was further urged that the respondent be restrained from proceeding further with the notices issued under section 154 and sec .....

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re likely to arise in view of the proceedings under section 271(1) (c) of the Act as well as under section 143(3) read with section 115JB in relation to subsequent assessment years. It was submitted that, therefore, a demand of ₹ 12,56,90,319/- is likely to arise in relation to assessment years 2010-11, 2011- 12 and 2013-14 which would be required to be adjusted against the amount of refund due to the petitioner. It was submitted that under the circumstances, there is no warrant for interf .....

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10 to 15.4.2015. A perusal of the averments made in the affidavit-in reply filed by the respondent, reveals that the respondent has clearly admitted that refund of the amount as claimed by the petitioner is due. However, such amount of refund is sought to be retained by the respondent on the ground that the demand of ₹ 12,56,90,319/- as stated in the affidavit in reply is likely to arise in respect of proceedings initiated in relation to assessment years 2010-11 and 2011-12. 7. In this reg .....

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ons of the Act. 8. A perusal of the provisions of section 240 of the Act reveals that when refund of any amount becomes due to the assessee, the Assessing Officer shall, except as otherwise provided in the Act, refund the amount to the assessee without his having to make any claim in that behalf. Therefore, it is the duty of the Assessing Officer, except where he exercises power under section 245, to set off refunds against tax remaining payable, to refund such amount to the assessee without his .....

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pondent to grant the refunds. The learned counsel for the petitioner, therefore, appears to be justified in contending that the proceedings under sections 154 and 271(1)(c) of the Act have been initiated only with a view to defeat the petitioner s claim for refund. However, pendency of even those proceedings would be of no avail to the respondent, inasmuch as section 241 of the Act which permitted the Assessing Officer to withhold the refund when any other proceeding under the Act is pending if .....

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