Hindustan Unilever Limited v. Deputy Commissioner Of Income Tax-1(1)And Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 2686 OF 2013 Hindustan Unilever Limited Vs. Deputy Commissioner of Income Tax-1(1)and Ors. ..Petitioner ..Respondents .... Mr. Nishant Thakkar a/w Rajesh Poojari, Advocates i/b Mulla &Mulla & CBC for Petitioner.Mr. Arvind Pinto, Advocate for Respondent. .... CORAM : M.S. SANKLECHA & N.M. JAMDAR, JJ. DATED : 25[th] JUNE 2015 Oral Judgment: (Per: M.S. Sanklecha, J.) On 11 June 2015, at the joint request of the counsel,petition was kept at the bottom of the admission board for finaldisposal today. Accordingly Rule. Rule made returnable forthwith.Respondent waives services. Taken up for final disposal. 2.The challenge in this petition under Article 226 of theConstitution of India is to the manner in which the Assessing Officerhas under Section 245 of the Income Tax Act, 1961 (the 'Act')S.S.DESHPANDE1 / 23 adjusted the demands aggregating to Rs. 43 crores for theAssessment Years 2004-05, 2007-08 and 2008-09 out of the refundof Rs.129crores admittedly due to the petitioner for the AssessmentYear 2006-07. Besides the challenge is also to the consequentialthree orders dated 22 August ,2013 passed under Section 220(2)of the Act demanding interest on the delayed payment of theadjusted demands for the Assessment years 2004-05, 2007-08 and2008-09. Facts:- 3.For the Assessment Year 2006-07, the petitioner filed itsreturn of income declaring Rs.366.94 crores as income andcomputing the tax payable thereon Rs.123.51 crores. The AssessingOfficer consequent to the directions of the Dispute Resolution Panelpassed an order dated 7 October 2010 under Section 143(3) r/wSection 144C of the Act enhancing the taxable income fromRs.366.94crores to Rs.937.86crores. A part of the enhancement wasattributable to transfer pricing adjustment of Rs.369crores. Thisfurther addition on account of transfer pricing led to a tax demandof Rs.124crores. 4.Being aggrieved, the petitioner carried the above order inappeal to the Income Tax Appellate Tribunal(Tribunal). By anorder dated 10 December 2012 the Tribunal partly accepted plea ofthe petitioner including on account of transfer pricing adjustment.The Tribunal by the above order dated 10 December 2012 restoredsome of the issues to the Assessing officer who by order dated 29May 2013 while giving effect to the order of Tribunal reduced thepetitioner's income to Rs.442crores leading to a refund ofRs.129crores. 5.In the meantime, for the Assessment Years 2007-08 and2008-09, the Assessing Officer by orders dated 28 January 2011 and31 January 2012 passed assessment orders resulting in demand ofRs.83crores for the Assessment Year 2007-08 and Rs.135crores forthe Assessment Year 2008-09. Being aggrieved by the twoassessment orders, the petitioner filed appeals for the AssessmentYear 2007-08 and 2008-09 to the Commissioner of Income Tax(Appeals) (the 'CIT (Appeals)'). Pending the disposal of the appealsby the CIT (Appeals), the petitioner filed application for stay ofdemand on 10 February 2011 for Assessment year 2007-08 and onS.S.DESHPANDE3 / 23 2 March 2012 for a stay of demand Assessment year 2008-09 withthe Assessing Officer in terms of Section 220(6) of the Act. 5.In the meantime, for the Assessment Years 2007-08 and2008-09, the Assessing Officer by orders dated 28 January 2011 and31 January 2012 passed assessment orders resulting in demand ofRs.83crores for the Assessment Year 2007-08 and Rs.135crores forthe Assessment Year 2008-09. Being aggrieved by the twoassessment orders, the petitioner filed appeals for the AssessmentYear 2007-08 and 2008-09 to the Commissioner of Income Tax(Appeals) (the 'CIT (Appeals)'). Pending the disposal of the appealsby the CIT (Appeals), the petitioner filed application for stay ofdemand on 10 February 2011 for Assessment year 2007-08 and onS.S.DESHPANDE3 / 23 2 March 2012 for a stay of demand Assessment year 2008-09 withthe Assessing Officer in terms of Section 220(6) of the Act. 6.So far as Assessment Year 2007-08 is concerned, inresponse to the petitioner's application dated 10 February 2011 forstay to the Assessing Officer, the the Commissioner of Income Taxpassed an order dated 22 March 2011 grant a partial stay ofRs.18crores on the petitioners depositing an amount of Rs.65.25crores out of demand of Rs.83.25crores. So far as Assessment Year2008-09 is concerned, the Assessing Officer by an order dated 9March 2013 granted a partial stay to the extent of Rs.25 crores outdemand of Rs.135 crores. This partial stay for assessment years2007-08 and 2008-09 was in respect of amount of demandattributable to transfer pricing adjustment identical/ similar to theissues now decided in favour of the petitioner by the Tribunal forthe Assessment year 2006-07. It is pertinent to note that neither ofthe two orders of stay dated 22March 2011 and 9 March 2012 makeany reference to any adjustment out of refunds due for Assessmentyear 2006-07. 7.Consequent to the orders of stay under Section 220(6) ofthe Act for the Assessment Years 2007-08 and 2008-09, the balancedemand of Rs.65.25crores for the Assessment Year 2007-08 andRs.110 crores for the assessment year 2008-09 was admittedly paidby the petitioner to the revenue. The appeals before theCIT(Appeals) for Assessment year 2007-08 and 2008-09 are stillawaiting disposal. 8. On 31 July 2013( received by petitioner on 2 August 2013),the Assessing Officer in terms of Section 245 of the Act informedthe petitioner of his proposal to adjust out of the refund of Rs.129crores due to the petitioner for the Assessment Year 2006-07 withthe pending demands which were as under: 9.The petitioner by letter dated 5 August 2013, objected toto the proposed adjustment pointing out that the demand for theS.S.DESHPANDE5 / 23 Assessment Year 2004-05 has already been adjusted on 10 January2011 out of the refund due to the petitioner for the Assessment Year2004-05 itself. So far as Assessment Years 2007-08 and 2008-09were concerned, the petitioner pointed out that demand for Rs.18crores for the Assessment Year 2007-08 and the demand for Rs. 25crores for Assessment year 2008-09 had been stayed by the order ofCommissioner dated 22 March 2011 and the order of the Assessingofficer dated 9 March 2012 respectively till the disposal of itsappeals by CIT (Appeals). It was pointed out that the appeals forAssessment years 2008-08 and 2008-09 are still awaiting disposal atthe hands of the CIT(Appeals). Thus it was submitted thatadjustment as proposed was not justified/warranted. 10.The Assessing Officer appears to have proceeded with theadjustment for Assessment year 2004-05, 2007-08 and 2008-09 asproposed in the notice dated 31July 2013 without taking notice ofthe petitioner's communication dated 5 August 2013. Consequently,issuing a refund order dated 22 August 2013 for the balanceamount of Rs. 77.13 crores after adjustment of demands for earlier 10.The Assessing Officer appears to have proceeded with theadjustment for Assessment year 2004-05, 2007-08 and 2008-09 asproposed in the notice dated 31July 2013 without taking notice ofthe petitioner's communication dated 5 August 2013. Consequently,issuing a refund order dated 22 August 2013 for the balanceamount of Rs. 77.13 crores after adjustment of demands for earlier Assessment years in accordance with the notice dated 31 July 2013and the interest payable. In fact, on 22 August 2013 itself theAssessing officer passed three orders under Section 220(2) of theAct, demanding interest on the delayed payment of the demands forAssessment Years 2004-05, 2007-08 and 2008-09 and also adjustedthe same out of refund of Rs.129crores for Assessment Year 2006-07. The interest demanded by the three impugned orders dated 22August 2013 is Rs.1.05 lakhs for Assessment year 2004-05, Rs.5.03crores for Assessment Year 2007-08 and Rs 3.99 crores forAssessment year 2008-09 aggregating to Rs.9.07crores. Thus theRevenue kept back/adjusted an amount in the aggregate of Rs.52crores (Rs.43 crores demand and Rs.9 crores interest) out of therefund of Rs.129 crores due for Assessment Year 2006-07. Submissions:- 11.Mr. Nishant Thakkar, the learned Counsel for thepetitioner submits as under: (a) The action of the Assessing officer in adjusting thedemand for Assessment years 2004-05,2007-08 and 2008-09 out of refund due for Assessment year 2006-07 under Section245 of the Act is without jurisdiction. This is factually so asthere is no demand outstanding for Assessment year 2004-05and the demands for Assessment years 2007- 08 and 2008-09have been stayed. Thus on the date of the intimation i.e. 31July 2013 as well as on 22 August 2013 no amounts werepayable for the three assessment years. The issue it issubmtted is concluded in favour of the petitioner by thedecision of Delhi High Court in Maruti Suziki India Ltd. Vs.DCIT reported in 347 ITR 43; (b) The procedure provided under Section 245 of the Act foradjustment of demands payable out of refunds to an assesseehas to be preceded by an intimation of the proposed action.This intimation enables the party concerned to correct anyerrors in the basis, for the proposed action. The giving ofintimation before taking any action implies that the AssessingOfficer would consider the objections before carrying out theproposed adjustment.; and (c) So far as the three orders dated 22 August 2013 demanding interest are concerned the same is consequentialto unsustainable adjustment. Therefore need to be quashed. 12.Per contra, Mr. Arvind Pinto, the learned Counsel for theRevenue submits as under: (a) It is accepted that there is no demand payable by thepetitioner for Assessment year 2004-05. Thus there is nooccasion to adjust the same from the refund due to thepetitioner for A.Y.2006-07. Consequently, no occasion todemand interest for the amount adjusted for A.Y. 2004-05 asdone by the order dated 22 August 2013 can arise; (b) So far as demands for the Assessment Year 2007-08 and2008-09 are concerned the same is payable under the Act bythe petitioner. The stay obtained only keeps recovery inabeyance. Therefore, the action of Assessing officer iscompletely justified in adjusting the same out of the refundfor the Assessment Year 2006-07; (c) The stay that has been granted under Section 220(6) ofthe Act. The grant of such a stay is in absolute discretion ofthe Assessing Officer, thus a party has no right to it. So far9 / 23 as the Assessment Year 2007-08 is concerned, the stay hasbeen granted by the Commissioner of Income Tax and not bythe Assessing Officer. So also the stay granted for Assessmentyear 2008-09 is by the Assessing officer yet the same can bereviewed by him in his absolute discretion; and (b) So far as demands for the Assessment Year 2007-08 and2008-09 are concerned the same is payable under the Act bythe petitioner. The stay obtained only keeps recovery inabeyance. Therefore, the action of Assessing officer iscompletely justified in adjusting the same out of the refundfor the Assessment Year 2006-07; (c) The stay that has been granted under Section 220(6) ofthe Act. The grant of such a stay is in absolute discretion ofthe Assessing Officer, thus a party has no right to it. So far9 / 23 as the Assessment Year 2007-08 is concerned, the stay hasbeen granted by the Commissioner of Income Tax and not bythe Assessing Officer. So also the stay granted for Assessmentyear 2008-09 is by the Assessing officer yet the same can bereviewed by him in his absolute discretion; and (d)As the adjustment of the demands for Assessment year2007-08 and 2008-09 out of refunds due for Assessment year2006-07 is in order, the demands for interest under Section220(2) of the Act by orders dated 22 August 2013 for theabove two years calls for no interferance. 13.Sections 156, 220 (1), (6) and 245 of the Act which arerelevant for adjudication are as under: “Section 156. When any tax, interest, penalty, fine orother sum is payable in consequence of any orderpassed under this Act, the Assessing Officer shall serveupon the assessee a notice of demand in the prescribedform specifying the sum so payable:” “Sec. 220(1). Any amount, otherwise than by way ofadvance tax, specified as payable in a notice ofdemand under section 156 shall be paid within thirtydays of the service of the notice at the place and to theperson mentioned in the notice.”(2) to (5)........ “(6) Where an assessee has presented an appeal underSection 246 or Section 246A the Assessing Officer may,in his discretion and subject to such conditions as hemay think fit to impose in the circumstances of thecase, treat the assessee as not being in default inrespect of the amount in dispute in the appeal, eventhough the time for payment has expired, as long assuch appeal remains undisposed of.” “Sec. 245. Set off refunds against tax remaining payable.Where under any of the provisions of this Act, a refund isfound to be due to any person, the Assessing Officer,Deputy Commissioner (Appeals), Commissioner (Appeals)or Principal Chief Commissioner or Chief Commissioner orPrincipal Commissioner or Commissioner, as the case maybe, may, in lieu of payment of the refund, set off theamount to be refunded or any part of that amount, againstthe sum, if any, remaining payable under this Act by theperson to whom the refund is due, after giving anintimation in writing to such person of the action proposedto be taken under this section.” Consideration: 14.Section 245 of the Act, empowers the revenue to adjustrefunds due to an assessee against any tax payable(of the samecharacter as the refund due) by him. The exercise of this power isdiscretionary as is evident from the use of the word “may” therein.Besides the requirement of giving notice/intimation of the proposedaction of adjustment out of the refund due is also an indication Consideration: 14.Section 245 of the Act, empowers the revenue to adjustrefunds due to an assessee against any tax payable(of the samecharacter as the refund due) by him. The exercise of this power isdiscretionary as is evident from the use of the word “may” therein.Besides the requirement of giving notice/intimation of the proposedaction of adjustment out of the refund due is also an indication of discretionary nature of power not mandatory. Thisnotice/intimation is required to be given so as to enable a party topoint out not only factual errors but also point out why such apower should not be exercised in the facts of the case, such as thedemand sought to be adjusted is still a subject matter of appeal andthe issue is covered by decisions of higher forums etc. Onconsideration of the same, it is open to the officer of the revenueconcerned to exercise its discretion, to adjust or not. This giving ofprior intimation has been held by this Court in A.H. Shaikh andOrs v. Suresh B Jain 165 ITR 86 to be mandatory before anyadjustment can be made. The exercise of powers under Section 245of the Act being discretionary has also been so held by the DelhHigh Court in Glaxo Smith Kline Asia (P) Ltd. Vs. CIT290 ITR 35.We respectfully concur with the above view of the Delhi high Courtthat the power under Section 245 of the Act is discretionary. Thusthe exercise of a power of adjusting demands out of refunds duewould depend upon the facts and circumstances of each case. 15.In view of the above, as held by this Court in A.H.Shaikh(supra) the giving of prior intimation under Section 245 of the ActS.S.DESHPANDE12 / 23 is mandatory. The purpose being to enable the party to point outthat there are factual errors or some further developments, if any,for example a stay of the demand, Supreme Court decision coveringthe demand which is still a subject matter of a pending appeal etcwhich would warrant not adjusting the refund against thepending demand. Thus when a party does raise such issues inresponse to a prior intimation, the officer of the revenue exercisingpowers under Section 245 of the Act must apply his mind to it andmust record reason why the objection is not sustainable and alsocommunicate it to the party. This before or at the time of adjustingthe refund. This alone would ensure that that the power ofadjustment under Section 245 of the Act is not exercised arbitrarily.Such a procedure would cause no prejudice to the revenue as theoccasion to grant the refund would not arise till the objection to theintimation is disposed of. Of course the objections should bedisposed of expeditiously as undue delay in granting of refundwould cause prejudice to the party entitled to the refund. 16.In the present facts, intimation dated 31 July 2013 underSection 245 of the Act was received by the petitioner on 2 AugustS.S.DESHPANDE13 / 23 2013. The Petitioner filed its objections on 5 August 2013 inter aliapointing out that no demand is outstanding for A.Y. 2004-05 andstay of the demand granted under Section 220(6) of the Act inappeals pending before the Commissioner of Income tax(Appeals)for A.Y. 2007-08 and 2008-09. Theses objections of the petitionerwere not considered as is apparent from the fact that even thoughno demand was due for the A.Y.2004-05 yet adjustment took placefrom the refund due and a demand for interest was also made byorder dated 22 August 2013. The entire object of giving priorintimation as provided under the Act has been renderedsuperfluous. Thus the decision making process was flawed and theadjustment of the refund against the demands due as well as theconsequent demand for interest are unsustainable. 17.It is an admitted position that there is no demandoutstanding/payable for Assessment year 2004-05. Thus nooccasion to adjust any part of the refund due to the petitioner forAssessment year 2005-06 to meet a non existing demand for A.Y.2004-05 can arise. Consequent demanding of interest underSection 220(2) of the Act as demanded by order dated 22 AugustS.S.DESHPANDE14 / 23 2013 for A.Y.2004-05 would not arise. Therefore in view of aboveagreed position the Revenue is directed to hand over the sum ofRs.3.76 lakhs retained/adjusted out of the refund due for thealleged dues of A.Y.2004-05 to the petitioner along with interest inaccordance with the Act. So also we set aside the impugned orderdated 22 August 2013 being Exhibit P to the the petition demandinginterest of Rs.1.05 lakhs. 18.So far as the Assessment Year 2007-08 is concerned, thedemand of Rs.18 crores had been stayed by the order ofCommissioner dated 22 March 2011 under Section 220(6) till thedisposal of the petitioner's appeal before the CIT (Appeals). Theappeals are still pending. Further, stay was granted in respect of thedemands attributable to transfer pricing adjustment which was anissue of dispute even for the Assessment Year 2006-07 and wasfinally resolved in favour of the petitioner. The contention ofMr.Pinto is that as the order of stay was granted by Commissionerof Income Tax and not by the Assessing Officer, therefor has noforce in law. Therefore according to Mr. Pinto the above communication could be ignored while adjusting the demand out ofrefunds due to the petitioner. It must be pointed out that thepetitioner had made an application for stay to the Assessing Officer.In response to the petitioner's application for stay under Section220(6) of the Act, to the Assessing officer, his superior viz. theCommissioner of Income Tax granted partial stay to the extent ofthe demand relating to transfer pricing adjustment. We are unableto understand how an order passed by an officer superior to theAssessing Officer granting stay would not be binding upon theAssessing Officer. In fact the Commissioner of Income Tax is theadministrative head and does exercise jurisdiction over the entireCommissionerate. Thus, even today, the order Commissioner ofIncome Tax staying the demand of Rs.17.98 crores is in force . 19.So far as Assessment Year 2008-09 is concerned, theAssessing Officer by an order dated 9 March 2012 stayed thedemand of Rs.25 crores attributable to transfer pricing adjustmentdone in the assessment order till the disposal of the petitioner'sappeal by the CIT(Appeals). These transfer pricing dispute are identical to the issue in A.Y. 2006-07 and the same are nowresolved in favour of the petitioner by the order of the Tribunal.The appeals are still pending before the CIT (Appeals) andconsequently the stay for the Assessment Year 2008-09 is in forceeven today. 20.However it is the contention of the Revenue, that grant ofstay by the authorities under the Act is immaterial as it would notobliterate the demand which is payable under the Act. It issubmitted that the Revenue has jurisdiction to adjust the demandswhich are payable under the Act and as of today the demands forA.Y. 2007-08 and 2008-09 are payable. The grant of stay underSection 220(6) of the Act only prevent the Revenue fromrecovering the amounts which have been confirmed by theAssessing Officer. However the amount continues to be payableunder the Act by the petitioners to the Revenue. Thus it is submittedthat no interference is warranted. 21.Section 245 of the Act provides that when refund is dueto any person then in lieu of payment, the revenue can setS.S.DESHPANDE17 / 23 21.Section 245 of the Act provides that when refund is dueto any person then in lieu of payment, the revenue can setS.S.DESHPANDE17 / 23 off/adjust the amount to be refunded against any sum remainingpayable under the Act by the person concerned. Therefore in thepresent facts, we would have to examine whether anydemands/sums were remaining payable under the Act. Normallyunder the Act after orders of Assessment is passed, a notice ofdemand is issued to the party concerned under Section 156 of theAct. This notice under Section 156 of the Act specifies theperiod(normally 30 days) within which the payment is to be madefailing which the person concerned is treated as an Assessee indefault. It is only after the expiry of time limit to make the paymentis the recovery provision triggered under Section 220 onwards ofthe Act. However where a stay is granted under Section 220(6) ofthe Act, in view of pending appeal before the CIT(Appeals) thensuch an assessee would not be treated in default even after theexpiring of the period of 30 days. It therefore follows that the timeto make the payment stands extended and the person is not to bedeemed to be an Assesee in default for the recovery provisions to beset in motion. The words “remaining payable under the Act” wouldmean where the assessee has not paid within the time available and has becomes an Asseessee in default. In this case in view of the stayunder Section 220(6) of the Act, the time to make the paymentstands extended till the disposal of the appeal by CIT (Appeals). 22.Thus as on 31 July 2013 the demand was “not remainingpayable under the Act”, because of the unconditional stay grantedunder Section 220(6) of the Act. Therefore Section 245 of the Actwill not be invocable. The stay order could have excluded any set-off/adjustment out of any refund due to an Assessee. Such is notthe case in the present facts. An adjustment under section 245 ofthe Act is also a mode of recovery of the tax. It is an unilateralaction on the part of the Revenue to recover the amounts due froma party by adjusting the refund due to it. 23.By virtue of orders of stay passed under Section 220(6) ofthe Act for the Assessment Years 2007-08 and 2008-09, no amountare payable under the Act. This protection would continue till suchtime as the CIT (Appeals) before whom the appeals are pendingdisposes the appeals or the Assessing Officer in exercise of its powerunder Section 220(6) of the Act varies the order of stay granted to the petitioners. The orders of stay are undisturbed till this date.Consequently, it is not open to the Revenue to adjust the recoveryof amount which has been stayed by orders of stay. 24.The Delhi High Court in the case of Maruti Suzuki IndiaLtd. (supra) had an occasion to deal with a similar contention as isbeing raised by the Revenue in the present case namely therecovery of tax cannot and would not include adjustment underSection 245 of the Act and the stay of recovery under Section220(6) of the Act would not fetter the rights of the Revenue toadjust the demands out of refund due to the assessee. Thissubmission was negatived by the Delhi High Court holding thatrecovery could be made by various modes including adjustmentunder Section 245 of the Act. The Delhi High Court held that wherean authority grants a stay of recovery under Section 220(6) of theAct, it could provide in that order granting stay of the recovery thatthe same would not be extended to adjustment of refund. In caseswhere the stay order is in absolute terms, it would be inappropriateon the part of the Revenue to adjust the demand by way ofadjustment. The Delhi High Court observed as under:S.S.DESHPANDE20 / 23 “.... However, when an order of stay of recovery insimplistic and absolute terms is passed, it would beimproper and inappropriate on the part of the Revenueto recover the demand by way of adjustment. In caseof doubt or ambiguity, an application for clarificationor vacation/modification of stay to allow adjustmentcan be, and should be filed. But no attempt should bemade and it should not appear that the Revenue hastried to overreach and circumvent the stay order.Obedience and compliance with the stay order in letterand spirit is mandatory. A stay order passed by anappellate/higher authority must be respected. Nodeviance or breach should be made.” (Emphasis supplied) We are in respectful agreement with this view. 25.Therefore the Revenue should have approached theappellate authority before whom the appeals were pending toexpedite the hearing or alternatively seek to vary the order of stayafter giving a hearing to the party concerned before the adjustmentunder Section 245 of the Act is carried out. This has admittedly notbeen done. 26.The power under Section 245 is discretionary. The ordersof stay have to be honoured before adjustment of the demand out ofrefund is done by the Revenue. If the Assessing Officer did notaccept the assessee's contention at the time of making theadjustment, the petitioner should have been informed as to why theobjections of the assessee to the adjustment is not sustainable.Unless the Assessing Officer exercising power under Section 245 ofthe Act subjects himself to this discipline, he would be exercising hispowers in an arbitrary manner. 27.In reply, the Assessing Officer has asserted at variousplaces stated that the power vested in him under Section 220(6) ofthe Act to grant or not to grant a stay is in the absolute discretionand power of the Assessing Officer. The Assessing Officer is clearlylaboring under some archaic notions. Under our system of rule oflaw no officer has an absolute power or absolute discretion. Thepower has to be used within the limits laid down by law and thediscretion has to judicially exercised. This Court in the case of KECVs. B.R. Balkrishnan reported in 251 ITR 158 has spelt out theparameter for grant of stay under Section 220(6) of the Act.S.S.DESHPANDE22 / 23 28.In these circumstances, the refund of Rs.129crores due tothe petitioners is payable in its entirety and no adjustment of anydemand for the Assessment Year 2007-08, 2008-09 and 2004-05was permissible. This for the reason, that factually there was nodue outstanding for the Assessment Year 2004-05 and the demandfor the Assessment Years 2007-08 and 2008-09 had been stayedpending disposal of the petitioner's appeal before the CIT (Appeals).Consequently, Revenue is directed to hand over the balance amountof Rs.52 crores out of Rs.129 crores of refund due for A.Y.2006-07to the petitioners. The petitioner is not an assessee in default underSection 220 of the Act, till such time as its appeals are decided.Consequently no occasion to charge interest at this stage underSection 220(2) of the Act can arise. Consequently, the orders dated22 August 2013 for the Assessment Year 2004-05, 2007-08 and2008-09 being Exhibit N, O and P are quashed and set aside. 29.In the aforesaid circumstances, rule is made absolute interms of prayer clause 'A' and 'B'. [N.M. JAMDAR, J] [M.S. SANKLECHA, J.]