Danieli India Limited v. The Asst. Commissioner Of Income Taxcentral Circle 2(2), Kolkata

OD-3 W.P.O. No. 2294 of 2022 IN THE HIGH COURT AT CALCUTTAConstitutional Writ JurisdictionOriginal Side DANIELI INDIA LIMITED Vs. THE ASST. COMMISSIONER OF INCOME TAXCENTRAL CIRCLE 2(2), KOLKATA. BEFORE :The Hon’ble JUSTICE MD. NIZAMUDDINDate : 1[st] September, 2023. Mr. J.P. Khaitan, Sr. Adv.Mr. Pratyush Jhunjhunwala, Adv.Mr. A.K.Dey, Adv.Ms. Sritapa Sinha, Adv.…for the petitionerMrs. Smita Das De, Adv.…for the respondents The Court : Heard learned advocates appearing for the parties. By this writ petition, petitioner has challenged the impugned actionof the respondent Income Tax Authority concerned in denying theadmitted refund to the petitioner in respect of the assessment years2010-11 and 2017-18 by making adjustment under Section 245 of theIncome Tax Act, 1961 for recovery of demand arising out of theassessment order relating to assessment years 2011-12, 2012-13 and2013-14 without compliance of mandatory formality of making priorintimation to the petitioner before making such adjustment of demandsrelating to the aforesaid assessment years against which admittedly appeals are pending before the CIT (Appeals) concerned and also on theground that if at all, the Income Tax Authority even without intimationunder Section 245 of the Act, he cannot recover more than 20% of thedemand arising out of the aforesaid assessment orders against whichappeals are pending before the CIT (Appeals). Considering the facts and circumstances of the case as appearsfrom record annexed to the writ petition, undisputed and admitted factwhich emerge are as follows : 1) That admittedly petitioner is entitled for refund in respect ofassessment years 2010-11 and 2017-18; 2) Admittedly statutory appeals before the CIT (Appeals) are pendingagainst the assessment orders relating to assessment years 2011-12,2012-13 and 2013-14 out of which demand has arisen and for recoveryof the same by way of adjustment has been made from the refundrelating to assessment years 2010-11 and 2017-18 ; 3) Admittedly the amount recovered by way of adjustment from theadmitted refund in respect of assessment year 2010-11 and 2017-18, forthe demand relating to assessment years 2011-12, 2012-13 and 2013-14are in excess of 20% of the demand. The legal issue which petitioner has raised in this writ petition isthat if at all the respondent Income Tax Authority can recover, can he recover more than 20% of the demand arising out of the relevantassessment orders against which appeals are pending, by way of makingadjustment from the refund in respect of any other assessment years andpetitioner submits that in this case admittedly the assessing officer hasrecovered more than 20% of the demand relating to assessment ordersagainst which appeals are pending from the admitted refund in respect ofother assessment years and such action of the assessing officer is notsustainable in law. Petitioner in support of its contention has relied on a decision of thisCourt in the case of Graphite India Ltd. vs. Deputy Commissioner ofIncome Tax & Ors. reported in (2022) 448 ITR 292 (Cal) and submitsthat the aforesaid issue is directly covered in favour of the petitioner, bythe aforesaid reported decision of this Court. Considering the facts and circumstances of this case which appearsfrom record and submission of the parties and the decision in the case ofGraphite India Ltd. (supra), this writ petition being WPO 2294 of 2022 isdisposed of by holding that the action of the assessing officer recoveringamount in excess of 20% of the demand arising out of relevantassessment orders against which Appeals are pending before CIT(Appeals) by way of adjustment from the admitted refund relating toother assessment years are arbitrary and not sustainable in law. Considering the facts and circumstances of this case which appearsfrom record and submission of the parties and the decision in the case ofGraphite India Ltd. (supra), this writ petition being WPO 2294 of 2022 isdisposed of by holding that the action of the assessing officer recoveringamount in excess of 20% of the demand arising out of relevantassessment orders against which Appeals are pending before CIT(Appeals) by way of adjustment from the admitted refund relating toother assessment years are arbitrary and not sustainable in law. Accordingly, the respondent Income Tax Authority concerned is directedto refund the amount in excess of 20% which has been recovered fromthe refund of assessment years 2010-11 and 2017-18 for recovery of thedemand arising out of the assessment orders relating to assessmentyears 2011-12, 2012-13 and 2013-14 against which appeals are pendingbefore the CIT (Appeals), within a period of four weeks from the date ofcommunication of this order subject to verification of the actual amountrecovered and for this purpose respondent Income Tax Authorityconcerned shall afford an opportunity of hearing to the petitioner ifrequired for clarification in support of such claim. With these observations and directions, this writ petition standsdisposed of. Affidavit in reply filed in Court be kept with the records. TR/ (Md. Nizamuddin, J.)