Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Vijay Singh Kadan Versus Chief Commissioner of Income Tax & Another

2016 (6) TMI 217 - DELHI HIGH COURT

Grant of refund due to the deceased Assessee - Adjustment of demand with the refund - Held that:- In the present case although the refund voucher uses the word ‘adjustment to be made’ as far as the Petitioner is concerned, the refund issued was after the adjustment was made. The explanation offered by the Revenue that it was merely 'withholding' ₹ 36,34,267 pending verification and not ‘adjusting' it is not acceptable. The Revenue is fully aware that the demand raised for AY 2008-09 had be .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

arch 2016, i.e., two months after notice had been issued by this Court in the present petition. Whatever the demand may be for the AYs 2008-09 and 2010-11, the fact remains that prior making the adjustment of such demand against the refund due to the Petitioner, no notice was issued to the Petitioner as mandatorily required under Section 245 of the Act. By issuing a notice on 21st March 2016 under Section 245 of the Act, two months after the notice was issued in the present petition, the Revenue .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

an, (hereinafter referred to as the deceased Assessee ) has been constrained to approach the Court for a second time with this writ petition, aggrieved by the non-compliance by the Revenue of the directions issued by this Court on 15th December 2015 in Writ Petition (Civil) No. 10895 of 2015 in a matter of grant of refund due to the deceased Assessee for the Assessment Year ( AY ) 2006-07. 2. The deceased Assessee has filed his return for the AY 2006-07 on 31st July 2006 declaring taxable income .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

med by the Assessee in its return of income. The appeal filed by the Assessee against the said order was partly allowed by the Commissioner of Income Tax (Appeals) [ CIT (A) ] by an order dated 5th August 2011. Against the said order, both the Assessee and the Revenue filed their respective appeals before the Income Tax Appellate Tribunal ( ITAT ). 4. During the pendency of the aforesaid proceedings, the Revenue is stated to have recovered a sum of ₹ 1,40,17,266 from the Assessee during th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

thereon. 6. During the pendency of the above proceedings, the Assessee expired and the matter was pursued by his legal heir, Mr. Vijay Singh Kadan, (the Petitioner herein). 7. Soon after the order of the ITAT, the Petitioner submitted an application on 17th December 2014 requesting the Revenue to grant appeal effect to the order of the ITAT and issue the refund along with the statutory interest. 8. The Petitioner sent reminders on 6th April 2015 and 17th August 2015. Meanwhile on 14th September .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

December 2015: The learned counsel for the Respondent informs us that the refund, consequent upon the appeal effect along with interest, in accordance with law, has been processed and the same shall be paid to the Petitioner within two weeks. In view of the statement made by the learned counsel for the Respondent, this writ petition stands disposed of. However, we are granting liberty to the Petitioner to approach this Court in case the refund is not so granted. 10. It appears that in the meanwh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ther stated that while following up the matter with the Revenue authorities the Petitioner was informed that the aforementioned sum which was adjusted pertained to demand for AY 2008-09. 11. The Petitioner was furnished with a defaced refund adjustment voucher. A copy of the said refund voucher had been annexed to the Petition as Annexure P-3. Inter alia it reveals that the net refund amount payable is shown as ₹ 1,65,35,770. In another portion thereunder titled adjustments - regular refun .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nly for a sum of ₹ 1,29,01,503. The Petitioner s contention is that such adjustment of demand pertaining to AY 2008-09, without prior intimation to the Petitioner or affording him an opportunity of being heard was in gross violation of Section 245 of the Act. Further, the Petitioner states that against the demand raised for AY 2008-09 by the AO, the Petitioner had already filed an appeal before the CIT (A) together with an application for stay which is still pending disposal by the CIT (A) .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tisfied that the Assessee would not be in a position to satisfy the demand of tax and that, but for the set off, the outstanding tax amount cannot be recovered at all. Reliance was also placed on the decision in Genpact India v. ACIT (2012) 205 Taxman 51 (Del) and an order dated 16th October 2014 in Writ Petition (Civil) No. 6172 of 2014 (The Oriental Insurance Co. Ltd. v. DCIT). Mr. Kaushik also drew the attention of the Court to Instruction No. 1952/1998 dated 14th August 1998 issued by the Ce .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cording to Mr. Manchanda, the question of issuing of notice under Section 245 of the Act did not arise since the Revenue had not 'adjusted' any sum but merely withheld it pending verification. Mr. Manchanda stated that after notice was issued in the present petition on 27th January 2016, a notice under Section 245 of the Act was issued to the Petitioner on 21st March 2016 requiring the Petitioner to file a response within 15 days. He further submitted that after the Assessee submits his .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

intimation in writing to such person of the action proposed to be taken under this Section. In Glaxo Smith Kline Asia P. Ltd. v. Commissioner of Income Tax (supra) this Court analyzed Section 245 of the Act in some detail and observed as under: 26. In our view, the power under Section 245 of the Act, is a discretionary power given to each of the tax officers in the higher echelons to set off the amount to be refunded or any part of that amount against the same, if any, remaining payable under th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

h equal, if not appear, force to Section 245. A mechanical invocation of the power under Section 245 irrespective of the fact situation, can lead to misuse of the power by the Revenue in order to delay the refund till such time a fresh demand for the subsequent assessment years is finalized. If reasonable time limits are not set for the processing of and disposal of an application for refund by the Revenue, it may result in the Assessee not being able to get the refund at all. Also, the statute .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e Assessee will not be in a position to satisfy the demand of tax and that but for the set off, the outstanding tax amount cannot be recovered at all. 15. Further, it was reiterated in para 38 of the decision in Glaxo Smith Kline Asia P. Ltd. v. Commissioner of Income Tax (supra): 38……. Unless there are sound reasons justifying the formation of an opinion that the tax that has become payable cannot be recovered from the Assessee as and when the issues are ultimately decided, the po .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

word adjustment to be made as far as the Petitioner is concerned, the refund issued was after the adjustment was made. The explanation offered by the Revenue that it was merely 'withholding' ₹ 36,34,267 pending verification and not adjusting' it is not acceptable. The Revenue is fully aware that the demand raised for AY 2008-09 had been challenged by the Petitioner before the CIT (A) and an application for stay of recovery of the demand had also been filed. The Revenue in fact .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version