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2016 (6) TMI 379 - GUJARAT HIGH COURT

2016 (6) TMI 379 - GUJARAT HIGH COURT - [2016] 387 ITR 696 - Net refund after adjustment of any outstanding demands along with interest - rectification of mistake - Held that:- It is difficult to understand the adamant approach adopted by the respondent in not giving effect to the order passed by the Commissioner (Appeals) when he is duly empowered by the provisions of section 245 of the Act to adjust the refund against other pending dues. In fact, the petitioner has implored the respondent to a .....

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d by the Commissioner (Appeals). The stand adopted by the respondent in the affidavit-in-reply and as urged before this court is thoroughly misconceived and contrary to the provisions of law. Under the circumstances, the petition deserves to be allowed by issuing the directions as prayed for therein. - For the foregoing reasons, the petition succeeds and is, accordingly, allowed. The respondent is directed to forthwith give effect to the order dated 5.9.2013 passed by the Commissioner (Appea .....

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yati N Vaidya, Advocate For the Respondent: Mr. KM Parikh, Advocate ORAL JUDGMENT (PER : MS. HARSHA DEVANI) 1. Rule. Mr. K.M. Parikh, learned senior standing counsel, waives service of notice of rule on behalf of the respondent. Having regard to the controversy involved in the present case, the matter was taken up for final hearing yesterday, that is, on 26th April, 2016. 2. By this petition under Article 226 of the Constitution of India, .....

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assessment came to be finalised by an order dated 17.12.2007 passed under section 143(3) read with section 147 of the Income Tax Act, 1961 (hereinafter referred to as the Act ) on a total income of ₹ 35,85,700/-. The petitioner carried the matter in appeal before the Commissioner of Income Tax (Appeals) who, vide order dated 19.11.2008 granted relief by reducing the addition to the extent of ₹ 10,01,019/-. Thereafter, the petitioner moved a rectification application before the Commi .....

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nce survived in respect of assessment year 2005-06, the petitioner withdrew the appeal preferred by it against the order dated 19.11.2008 passed by the Commissioner (Appeals). The petitioner, thereafter, requested the respondent to give effect to the order dated 5.9.2013 passed by the Commissioner (Appeals) on the rectification application. The request was reiterated by forwarding several letters in this regard. However, since the respondent did not pass any order giving effect to the order of t .....

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izen s Charter, 2014 (Annexure-K to the petition) to point out that the respondent was required to give effect to the appellate order within a period of one month from the date of such order. It was pointed out that against the order dated 5.9.2013 passed by the Commissioner (Appeals), the department has preferred an appeal before the Tribunal; however, no stay has been granted by the Tribunal and hence, the respondent is duty bound to comply with the order passed by the Commissioner (Appeals) a .....

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hence, it cannot be said that the said order has become final and conclusive and that the petitioner cannot insist upon the revenue to immediately give effect to the order dated 5.9.2013. It is further the case of the respondent that against the order passed by the Commissioner (Appeals), the petitioner had availed of two remedies; one by filing an appeal before the Tribunal being ITA No.3170/Ahd/2010 and another by filing the rectification application under section 154 of the Act. According to .....

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assessment year 2008-09. According to the respondent, in view of the fact that in the case of the petitioner, a demand of ₹ 5,79,824/- is to arise and a demand of ₹ 2,03,007/- is outstanding for assessment year 2006-07, it cannot be said that the petitioner is entitled to refund of the amount as claimed in the petition. It is also the case of the respondent that the order dated 5.9.2013 has not attained finality in the eye of law as the department s appeal against the sai .....

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6. The facts are not in dispute. By an order dated 19.11.2008, the Commissioner (Appeals) partly allowed the appeal preferred by the petitioner by restricting the addition made by the Assessing Officer under section 40(a)(ia) to ₹ 18,60,931/- and deleting the balance amount. On 30.12.2008, the petitioner moved a rectification application before the Commissioner (Appeals) to rectify the earlier order passed by him. Several reminders were forwarded to the Commissioner (Appeals) for passing .....

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s earlier disallowed under section 40(a)(ia) of the Act where the TDS deducted was deposited with the Government before due date of filing return under section 139(1) of the Act. In view of the fact that the grievance voiced by the petitioner in the appeal preferred before the Tribunal no longer survived, the petitioner sought permission to withdraw the appeal and, accordingly, by an order dated 10.1.2014 the Tribunal dismissed the appeal as withdrawn. It appears that against the orde .....

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petitioner for giving effect to the said order. 8. Section 154(4) of the Act provides that a rectification has to be effected by an order in writing by the authority concerned. Not only that, the authority concerned has to give effect to the order by calculating afresh the amount of tax payable as per the rectified order and the amount of tax paid, if any. Sub-section (5) thereof provides that where any such amendment has the effect of reducing the assessment or otherwise reducing the .....

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ntemplated under sub-section (5) of section 154 nor has he made any adjustment after prior intimation to the petitioner under section 245 of the Act. The reason for noncompliance with the mandate of the provisions of sub-section (5) of section 154 of the Act is nothing but an adamant attitude of the respondent, which is clearly reflected from the contentions raised in the affidavit in reply wherein it has been contended that since the petitioner preferred an appeal before the Tribunal against th .....

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order dated 19.11.2008 has attained finality and is in operation, whereas on the other hand, it is stated that since the rectification order dated 5.9.2013 is subject-matter of challenge before the Tribunal, it cannot be given effect to at this stage. Essentially the stand of the respondent is that one way or the other, the order dated 5.9.2013 passed by the Commissioner (Appeals) is not required to be given effect to. 10. In the opinion of this court, while not giving effect to the .....

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as not been stayed by the Tribunal or any other court of competent jurisdiction. Under the circumstances, the respondent is statutorily bound to give effect to the said order. 11. Moreover, it is difficult to understand the adamant approach adopted by the respondent in not giving effect to the order passed by the Commissioner (Appeals) when he is duly empowered by the provisions of section 245 of the Act to adjust the refund against other pending dues. In fact, the petitioner has impl .....

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