Without prior intimation, Income tax refund cannot be adjusted
Facts and Issues of the case
The petitioner challenges the action of adjusting the refund of Rs.2,22,89,942/- for the assessment year 2008-09 arising as consequence and effect of the order of the Income Tax Appellate Tribunal (‘The Tribunal’) against the alleged outstanding demands for assessment years 2014-15 and 2015-16.
The case set up is that an amount of Rs.61,64,649/- as refund for assessment year 2008-09 came to be adjusted for assessment year 2014-15 which came to the knowledge of the petitioner on November 17, 2021, when the petitioner downloaded the Form 26AS for the assessment year 2014-15, where ‘Part C’ of Form No.26AS provided details of tax paid (other than TDS or TCS).
The petitioner’s case further is that an amount of Rs.1,61,25,293/- came to be adjusted illegally from the refund determined in favour of the petitioner upon giving effect to the tribunal’s order for assessment year 2008-09 against the alleged outstanding demand for the assessment year 2015-16. Knowledge of this illegal adjustment was also stated to have been acquired by the petitioner on November 17, 2021 when the petitioner downloaded the Form No.26AS.
Observations by the Court
In the present case, it can be seen that the allegation that there was no prior intimation under section 245 of the Act has remained unrebutted as no proof of any such prior intimation was placed on record by the Revenue.
The Court has no hesitation in holding that the impugned action making adjustments of the amount of Rs.61,64,649/- and Rs.2,22,89,942/- for assessment year 2008-09 against the alleged outstanding demands for assessment years 2014-15 and 2015-16 is bad and illegal and is accordingly quashed.
The refund on income tax cannot be adjusted without prior knowledge.Greatship-India-Limited-Vs-ACIT-Bombay-High-Court