By Sri. Aravind v. Chavan, Advocate

Digitallysigned byCHANDANAB MLocation:High CourtofKarnataka IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 24 DAY OF APRIL, 2025 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR -WRIT PETITION NO.4139 OF 2025 (TIT) C/W -WRIT PETITION NO.4179 OF 2025 (TIT) IN WP No. 4139/2025: BETWEEN: KARNATAKA GOLF ASSOCIATION 1 GOLF AVENUE, OLD AIRPORT ROAD, KODIHALLI BANGALORE – 560 008. (REPRESENTED BY ITS HON. SECRETARY COL. C.P. NANJAPPA (RETD.) S/O MR. C W PONNANNA) AGED ABOUT 67 YEARS REGISTERED UNDER MYSORE SOCIETIES REGISTRATION ACT 1960 …PETITIONER (BY SMT GEETHA RANI K., ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX (EXEMPTION) CIRCLE 1, UNITY BUILDING, 6 FLOOR, MISSION ROAD, BENGALURU – 560 027. CIRCLE 1, UNITY BUILDING, 6 FLOOR, MISSION ROAD, BENGALURU – 560 027. 2. THE ASSISTANT DIRECTOR OF INCOME TAX CENTRAL PROCESSING UNIT, (CPC), INCOME TAX DEPARTMENT BENGALURU – 560 500. OF INCOME TAX CENTRAL PROCESSING UNIT, (CPC), INCOME TAX DEPARTMENT BENGALURU – 560 500. …RESPONDENTS (BY SRI. ARAVIND V. CHAVAN, ADVOCATE) THIS W.P. IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE AN APPROPRIATE WRIT OR ORDER IN THE NATURE OF MANDAMUS OR OTHERWISE, TO THE LEARNED FIRST RESPONDENT TO GRANT REFUND OF SUM DETERMINED AS PER RECTIFIED ORDER PASSED UNDER SECTION 154 DTD. 28.03.2024 FOR AY 2019-20 AND TO HOLD THAT SET-OFF OF REFUND OF AY 2019-20 IS BAD IN LAW THE RECTIFIED ORDER IS ENCLOSED AS ANNEXURE-J AND ETC. IN WP NO. 4179/2025 BETWEEN: KARNATAKA GOLF ASSOCIATION 1 GOLF AVENUE, OLD AIRPORT ROAD KODIHALLI BANGALORE – 560 008 (REPRESENTED BY ITS HON. SECRETARY COL. C.P. NANJAPPA (RETD.) S/O MR. C W PONNANNA) AGED ABOUT 67 YEARS REGISTERED UNDER MYSORE SOCIETIES REGISTRATION ACT 1960 (BY SMT. GEETHA RANI K., ADVOCATE) ...PETITIONER AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1, UNITY BUILDING, 6 FLOOR, MISSION ROAD, BENGALURU – 560 027. CIRCLE 1, UNITY BUILDING, 6 FLOOR, MISSION ROAD, BENGALURU – 560 027. 2. THE ADDITIONAL/JOINT/DEPUTY/ ASSISTANT COMMISSIONER OF INCOME TAX, INCOME-TAX OFFICER, NATIONAL FACELESS-ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2 FLOOR, E-RAMP, JAWARHARLAL NEHRU STADIUM, DELHI – 110 003. ASSISTANT COMMISSIONER OF INCOME TAX, INCOME-TAX OFFICER, NATIONAL FACELESS-ASSESSMENT CENTRE, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, ROOM NO.401, 2 FLOOR, E-RAMP, JAWARHARLAL NEHRU STADIUM, DELHI – 110 003. 3. THE ASSISTANT DIRECTOR OF INCOME TAX CENTRAL PROCESSING UNIT (CPC), INCOME TAX DEPARTMENT, BENGALURU – 560 500. …RESPONDENTS CENTRAL PROCESSING UNIT (CPC), INCOME TAX DEPARTMENT, BENGALURU – 560 500. …RESPONDENTS (BY SRI. ARAVIND V. CHAVAN, ADV. FOR R1 TO R3) THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA PRAYING TO THE LEARNED FIRST NC: 2025:KHC:16976WP No. 4139 of 2025C/W WP No. 4179 of 2025 RESPONDENT TO GRANT REFUND ON SUM DETERMINED AS PER INTIMATION UNDER SECTION 143(1) DATED 17.02.2023 AND RECTIFIED ORDER PASSED UNDER SECTION 154 DATED 07.06.2024 FOR AY 2022-23 AND TO HOLD THAT SET OFF OF REFUND OF AY 2022-23 IS BAD IN LAW. THE INTIMATION UNDER SECTION 143(1) PASSED BY THE LEARNED THIRD RESPONDENT IS ENCLOSED AS ANNEUREX-G AND RECTIFIED ORDER PASSED BY THE LEARNED FIRST RESPONDENT IS ENCLOSED AS ANNEXURE-K AND ETC. THESE PETITIONS ARE COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM:HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In W.P.No.4139/2025, petitioner seeks the following reliefs: NC: 2025:KHC:16976WP No. 4139 of 2025C/W WP No. 4179 of 2025 RESPONDENT TO GRANT REFUND ON SUM DETERMINED AS PER INTIMATION UNDER SECTION 143(1) DATED 17.02.2023 AND RECTIFIED ORDER PASSED UNDER SECTION 154 DATED 07.06.2024 FOR AY 2022-23 AND TO HOLD THAT SET OFF OF REFUND OF AY 2022-23 IS BAD IN LAW. THE INTIMATION UNDER SECTION 143(1) PASSED BY THE LEARNED THIRD RESPONDENT IS ENCLOSED AS ANNEUREX-G AND RECTIFIED ORDER PASSED BY THE LEARNED FIRST RESPONDENT IS ENCLOSED AS ANNEXURE-K AND ETC. THESE PETITIONS ARE COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM:HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In W.P.No.4139/2025, petitioner seeks the following reliefs: “(a) Issue as far as Petitioner is concerned by an appropriate writ or Order in the nature of Mandamus or otherwise, to the Learned First Respondent to grant refund of sum determined as per rectified order passed under section 154 dated 28.03.2024 for AY 2019-20 and to hold that set-off of refund of AY 2019-20 is bad in law. The rectified Order is enclosed as Annexure-J. appropriate writ or Order in the nature of Mandamus or otherwise, to the Learned First Respondent to grant refund of sum determined as per rectified order passed under section 154 dated 28.03.2024 for AY 2019-20 and to hold that set-off of refund of AY 2019-20 is bad in law. The rectified Order is enclosed as Annexure-J. (b) Issue as far as Petitioner is concerned by an appropriate writ or Order in the nature of Mandamus or otherwise, directing the learned Respondent to grant interest on refund as stipulated under section 244A for AY 2019-20.” appropriate writ or Order in the nature of Mandamus or otherwise, directing the learned Respondent to grant interest on refund as stipulated under section 244A for AY 2019-20.” In W.P.No.4179/2025, petitioner seeks the following reliefs: “(a) Issue as far as Petitioner is concerned by an appropriate writ or Order in the nature of Mandamus appropriate writ or Order in the nature of Mandamus NC: 2025:KHC:16976WP No. 4139 of 2025C/W WP No. 4179 of 2025 or otherwise, to the Learned First Respondent to grant refund of sum determined as per intimation under section 143(1) dated 17.02.2023 and rectified order passed under section 154 dated 07.06.2024 for AY 2022-23 and to hold that set-off of refund of AY 2022-23 is bad in law. The intimation under section 143(1) passed by the Learned Third Respondent is enclosed as Annexure-G and rectified Order passed by the learned First Respondent is enclosed as Annexure-K vide DIN No. ITBA/COM/F/17/2024-25/1065471661(1). (b) Issue as far as Petitioner is concerned by an appropriate writ or Order in the nature of Mandamus or otherwise, directing the learned Respondent to grant interest on refund as stipulated under section 244A for AY 2022-23”. appropriate writ or Order in the nature of Mandamus or otherwise, directing the learned Respondent to grant interest on refund as stipulated under section 244A for AY 2022-23”. 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the decision of a Co-ordinate Bench of this Court in the case of M/s. Price Waterhouse, Bengaluru Vs. National Faceless Appeal Centre, Delhi and Ors passed in W.P.No.23784/2024 dated 25.09.2024 and as such, the present petition also deserves to be allowed in terms of the said decision of this Court. 4. This Court in the case of M/s. Price Waterhouse, (supra) has held as under: In this petition, the petitioner seeks the following relief's: “(i) Directing the 3[rd] Respondent to forthwith refund Rs.21,08,91,940/-, being demand recovered in excess of 20% of the demand raised for the assessment year 2012-13, along with applicable interest; 3. A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the decision of a Co-ordinate Bench of this Court in the case of M/s. Price Waterhouse, Bengaluru Vs. National Faceless Appeal Centre, Delhi and Ors passed in W.P.No.23784/2024 dated 25.09.2024 and as such, the present petition also deserves to be allowed in terms of the said decision of this Court. 4. This Court in the case of M/s. Price Waterhouse, (supra) has held as under: In this petition, the petitioner seeks the following relief's: “(i) Directing the 3[rd] Respondent to forthwith refund Rs.21,08,91,940/-, being demand recovered in excess of 20% of the demand raised for the assessment year 2012-13, along with applicable interest; (ii) Directing the 1[st] / 2[nd] Respondent to dispose of the appeal pending before it for the assessment year 2012-13 in Appeal No.CIT(A), Bengaluru-1/10224/2015-16 (old appeal No.9/10002/2017-18 (Manual Appeal Register No.:40/BU/2015-16)) (Annexure0B dated 29.04.2015 in a time bound manner, expeditiously; (iii) Directing the Respondents not to enforce the balance demand raised vide demand notice dated 31.03.2015 (Annexure-A2) until disposal of the appeal by the 1[st] / 2[nd] Respondent and for a period of three weeks thereafter; and (iv) Pass such other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity.” 2. Heard the learned Senior Counsel appearing for the petitioner and the learned counsel appearing for the respondents and perused the material available on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material available on record, the learned Senior Counsel for the petitioner submitted that aggrieved by the demand notice dated 31.03.2015 issued by respondent No.3 in relation to the assessment year 2012-13, the petitioner filed an appeal before respondent No.1 on 29.04.2015. In addition thereto, the petitioner filed stay applications before respondent No.3 seeking stay of the demand raised for the assessment year 2012-13 and the said applications were filed on 05.05.2015, 18.05.2015, 12.06.2015, 30.11.2016. On 05.10.2017, the petitioner filed written submissions and application for additional evidence and the proceedings before respondent No.1 are still pending adjudication. It is submitted that though the petitioner would be liable to pay only 20% by way of pre-deposit for the purpose of stay before the Appellate Authority in terms of the Circular dated 31.07.2017 and the petitioner would be entitled to refund of all the amounts payable to him in excess of the aforesaid 20%, the respondents have proceeded to adjust the amounts in excess of 20%, which is the maximum of amount of pre-deposit to be made by the petitioner, who is before this Court seeking direction for refund of the amounts adjusted in excess of 20% and for direction to the Appellate Authority to dispose of the appeals as expeditiously as possible. 4. In support of his submissions, the learned Senior Counsel appearing for the petitioner placed reliance on the judgment of this Court in the case of Pan NC: 2025:KHC:16976WP No. 4139 of 2025C/W WP No. 4179 of 2025 Synthetics Private Limited and Centralized Processing Centre and others –W.P.No.9835/2024 dated 23.07.2024 as well as the Office Memorandum dated 31.07.2017 issued under Section 220 of the Income Tax Act, 1961. 5. Per contra, learned counsel appearing for the respondents submits that respondent No.1 would take up the appeals and dispose of the same as expeditiously as possible. 4. In support of his submissions, the learned Senior Counsel appearing for the petitioner placed reliance on the judgment of this Court in the case of Pan NC: 2025:KHC:16976WP No. 4139 of 2025C/W WP No. 4179 of 2025 Synthetics Private Limited and Centralized Processing Centre and others –W.P.No.9835/2024 dated 23.07.2024 as well as the Office Memorandum dated 31.07.2017 issued under Section 220 of the Income Tax Act, 1961. 5. Per contra, learned counsel appearing for the respondents submits that respondent No.1 would take up the appeals and dispose of the same as expeditiously as possible. 6. A perusal of the material available on record will indicate that it is an undisputed fact that the petitioner filed an appeal on 29.04.2015 and multiple stay applications were also filed by him between 05.05.2015 and 30.11.2016 and the petitioner is making earnest efforts to get the appeals as well as the stay applications disposed of. In this context, perusal of the Circular/Office Memorandum dated 31.07.2017 will indicate that in the event, the petitioner deposits 20% by way of pre-deposit, there shall be stay of demand till disposal of the appeal by the Appellate Authority. However, in the instant case, despite the petitioner having filed the appeal as long back as in the year 2015 and multiple stay applications between 2015 to 2016, the Assessing Officer has neither passed any orders on the stay applications nor as the Appellate Authority disposed of the appeals. On the other hand, the respondents have proceeded to adjust the refunds payable to the petitioner in excess of maximum 20%, which is clearly impermissible in law, particularly, having regard to the office memorandum dated 31.07.2017 and the judgment of this Court in W.P.No.9835/2024 dated 23.07.2024 referred supra wherein it is held as under: ORAL ORDER The petitioner has sought for directions to the respondents to refund an amount of Rs.1,99,98,090/- being the demand raised for the assessment year 2015-16 and 2016-17 which is stated to have been adjusted as against the refund due for the assessment year 2023-24. 2. It is the case of the petitioner that for the assessment year 2016-17, the third respondent has passed an assessment order and raised a demand on 26.05.2023, and for the assessment year 2015-16, the third respondent has passed an assessment order and raised the demand on 30.05.2023. 3. Aggrieved by such orders, appeals were filed before the Commissioner of Income Tax and the petitioner had filed an application seeking for stay of the demand for the assessment year 2015-16 as per Annexure-M and similar application was filed seeking stay of demand for the Assessment Year 2016-17 at Annexure-N. Petitioner submits that in terms of Annexure-P as against outstanding demand noticing that refund was granted upon processing the return for the assessment year 2023-24 and determination of refund of Rs.1,99,98,090/-, the said refund was adjusted for the demand as regards the assessment year 2015-16 and 2016-17. 4. It is the contention of the petitioner that the entirety of refund was adjusted and in light of their application for stay, if the demand for 2015-16 and 2016-17 is stayed, the question of adjustment of entirety of refund would not arise. 5. It is noticed that the assessment order for the year 2015-16 was passed on 16.02.2024 and for the year 2016-17 was passed on 26.05.2023. 6. It is not in dispute that the application for stay was filed on 11.01.2024 as regards assessment year 2015-16 and on the same date i.e., on 11.01.2024 application for stay was filed as regards the assessment year 2016-17. As on the date of filing of the application for stay, the petitioner had the benefit of order of refund for the year 2023-24. If as on the date of filing the application for stay dated 11.01.2024, if the petitioner had made payment of 20% remaining 80% would have been stayed. 5. It is noticed that the assessment order for the year 2015-16 was passed on 16.02.2024 and for the year 2016-17 was passed on 26.05.2023. 6. It is not in dispute that the application for stay was filed on 11.01.2024 as regards assessment year 2015-16 and on the same date i.e., on 11.01.2024 application for stay was filed as regards the assessment year 2016-17. As on the date of filing of the application for stay, the petitioner had the benefit of order of refund for the year 2023-24. If as on the date of filing the application for stay dated 11.01.2024, if the petitioner had made payment of 20% remaining 80% would have been stayed. 7. In light of adjustment at Annexure-P, only manner of moulding the relief would be adjustment of refund to an extent of 20% of the demand for the year 2015-16 and 2016-17. Once adjusted, the remaining amount of 80% of refund adjusted towards demand requires to be reversed by crediting the same to the petitioner. Accordingly, the third respondent is directed to refund the amount of 80% of the demand for the assessment year 2015-16 and 2016-17 as already been adjusted. Such refund to be made within a period of eight weeks from today. 8. Accordingly the petition is disposed off. 7. In view of the aforesaid facts and circumstances, I am of the considered opinion that the respondents were clearly not justified in adjusting the refund amounts payable to the petitioner in excess of 20% and consequently, necessary directions have to be issued to the respondents to refund the entire amounts payable to the petitioner in excess of 20% of the demand for the assessment year 2012-13 within a stipulated time frame and by directing respondent No.1 to dispose of the appeals within a stipulated time frame. 8. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The concerned respondents are directed to refund the entire amount in excess of 20% of refund the entire amount in excess of 20% of NC: 2025:KHC:16976WP No. 4139 of 2025C/W WP No. 4179 of 2025 the demand raised for the assessment year 2012-13 together with the applicable interest back to the petitioner after due verification within a period of six weeks from the date of receipt of a copy of this order. (iii) The concerned respondent / Appellate Authority is directed to dispose of the appeal within a period of three months from the date of receipt of a copy of this order. Authority is directed to dispose of the appeal within a period of three months from the date of receipt of a copy of this order. (iv) Respondents are directed not to enforce the balance demand raised by any demand notice at Annexure-A2 dated 31.03.2015 till the expiry of period of three weeks after disposal of the appeal by the Appellate Authority. balance demand raised by any demand notice at Annexure-A2 dated 31.03.2015 till the expiry of period of three weeks after disposal of the appeal by the Appellate Authority. 5. It is also pertinent to note that on 24.01.2024 and 07.08.2024, the first respondent issued a letter granting stay of demand for Assessment year under dispute. 6. Subsequently, the petitioner submitted a representation/application dated 05.09.2024 and 24.10.2024 seeking the respondents for the refund of the adjust amount along with interest for which the petitioner neither received a reply nor the refund. However, having regard to the fact that the respondents have neither replied to the application filed by the petitioner nor NC: 2025:KHC:16976WP No. 4139 of 2025 C/W WP No. 4179 of 2025 have granted refund as sought for by the petitioner, I deem it just and appropriate to direct the respondents to refund entire amount in excess of 20% for the assessment years 2022-23 and 2019-20. 7. In the result, I pass the following: ORDER i)The petitions are hereby allowed and disposed of in terms of M/s. Price Waterhouse, Bengaluru Vs. National Faceless Appeal Centre, Delhi and Orspassed in W.P.No.23784/2024 dated 25.09.2024.W.P.No.23784/2024 dated 25.09.2024. NC: 2025:KHC:16976WP No. 4139 of 2025 C/W WP No. 4179 of 2025 have granted refund as sought for by the petitioner, I deem it just and appropriate to direct the respondents to refund entire amount in excess of 20% for the assessment years 2022-23 and 2019-20. 7. In the result, I pass the following: ORDER i)The petitions are hereby allowed and disposed of in terms of M/s. Price Waterhouse, Bengaluru Vs. National Faceless Appeal Centre, Delhi and Orspassed in W.P.No.23784/2024 dated 25.09.2024.W.P.No.23784/2024 dated 25.09.2024. ii)The concerned respondents are directed to refund the entire amount in excess of 20% for the assessment years 2022-2023 and 2019-20 together with interest, if applicable, back to the petitioner after due verification within a period of six weeks from the date of receipt of copy of this order. refund the entire amount in excess of 20% for the assessment years 2022-2023 and 2019-20 together with interest, if applicable, back to the petitioner after due verification within a period of six weeks from the date of receipt of copy of this order. iii)Respondents are also directed not to take precipitative/coercive steps against the precipitative/coercive steps against the NC: 2025:KHC:16976WP No. 4139 of 2025C/W WP No. 4179 of 2025 petitioner in relation to the balance demand raised in W.P.No.4179/2025 at Annexures – A and D dated 26.12.2016 and 26.12.2019, respectively and in W.P.No.4139/2025 at Annexures – A and D dated 27.03.2013 and 29.01.2016, respectively, till expiry of period of three weeks after disposal of the appeal by the Appellate Authority. Sd/- (S.R.KRISHNA KUMAR) JUDGE