9911796707
TMI Blog2025 (3) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned intimation] passed under Section 143(1) of the Income Tax Act, 1961 [the Act]. The petitioner, essentially, impugns the action of the Revenue in adjusting the refund of Rs. 19,37,43,880/- payable to the petitioner for assessment year [AY] 2020-21 against the outstanding demands in respect of AY 2016-17, AY 2017-18 and AY 2018-19. The petitioner also claims that the amounts adjusted be refunded along with interest as applicable. 2. A plain reading of the impugned intimation indicates that the Revenue has adjusted a sum of Rs. 7,12,46,726/- against the demand outstanding in respect of AY 2017-18 and a sum of Rs. 3,13,20,749/- in respect of AY 2018-19. It is the petitioner's case that, there was an absolute stay of recovery of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earlier decisions of this Court in Lease Plan India and Anr. v. Deputy Commissioner of Income Tax: Neutral Citation: 2012: DHC:5280-DB. In the said case, this Court had observed as under: "12. It is thus evident that in this case that the actions of the Revenue were violative of the stay order of this Court; they were also contrary to the provisions of Section 245 of the Income Tax Act. The term "recovery" includes adjustment of the refund due to the assessee. Thus, the High Court order which directed that the assessment proceedings "would not be given effect to without the leave of the court" translated to a bar on adjustments as well. Furthermore, Section 245 is clear in its mandate regarding the requirement of prior intimation in writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AT. However, this is stoutly disputed by the learned counsel for the Revenue. He submits that the learned ITAT has not passed any blanket order proscribing the Revenue from adjusting the refunds due to the petitioner against outstanding demands for AY 2016-17. He points out that by an order dated 26.11.2021, passed by the learned ITAT in SA 141/DEL/ 2021 in respect of AY 2016-17, it had granted ad interim relief in the following terms: "Ld. Counsel for Assessee submitted that on the last date of hearing it was informed to the Hon'ble tribunal that rectification application was pending. He submitted that rectification order has now been passed. However, there are still some issues which would need reconsideration by the Assessing officer. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te stay of recovery and an order restraining the Revenue from taking "coercive action". It is the Revenue's case that an order interdicting coercive action for recovery of dues would not impede the Revenue from adjusting the refunds against the outstanding demands, as the same does not amount to coercive action. 10. Mr Sawhney, the learned counsel appearing for the petitioner countered the aforesaid submission. He referred to the decision of the Punjab and Haryana High Court in the case of Kulbhushan Goyal v. Union of India and Ors.: 2018 SCC OnLine P&H 103 and drew the attention to paragraph 7 of the said decision, which is set out below: "7. The first question is whether the adjustment of a refund granted amounts to a coercive step. It ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he demand by way of adjustment. In case of doubt or ambiguity, an application for clarification or vacation/modification of stay to allow adjustment can be, and should be filed. But no attempt should be made and it should not appear that the Revenue has tried to over-reach and circumvent the stay order. Obedience and compliance with the stay order in letter and spirit is mandatory. A stay order passed by an appellate/higher authority must be respected. No deviancy or breach should be made." 12. Thus, the principal controversy that needs to be addressed is whether an order restraining the revenue from taking coercive steps for recovery of its demand would include adjustment of refunds against outstanding demands. 13. While the Punjab and H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed by the learned ITAT are, essentially, to interdict the Revenue from taking any steps in the meanwhile. 16. Apart from the above, there is yet another reason why the Revenue's action for adjustment of refund against the outstanding demand for AY 2016-17 is unsustainable. Concededly, the Revenue has not issued any prior notice or intimation under Section 245 of the Act for making any such adjustment. Thus, the mandatory provisions for effecting an adjustment under Section 245 of the Act have not been followed. 17. In Vijay Singh Kadan v. Chief Commissioner of Income Tax: (2016) 384 ITR 69, this Court had not accepted that the Revenue could issue an ex post facto notice to cure the said defect. The relevant extract of the said decisi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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