Kshipra Jatana v. Hon’ble Mr. Justice Manmohan

$~2 IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C) 7290/2022 & CM APPLs.22355-22356/2022 KSHIPRA JATANA..... PetitionerThrough:Mr. Vikram Kakar, Advocate.Through:Mr. Vikram Kakar, Advocate. versus CORAM: HON’BLE MR. JUSTICE MANMOHAN HON’BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): 1.Present writ petition has been filed seeking refund of Rs.1,52,240/-which was recovered in excess of 10% of the total disputed tax demand forthe Assessment Year 2017-18 against the refunds due for the AssessmentYear 2020-21. 2.Learned counsel for the Petitioner states that Rs.1,52,240/- in excessof the 10% of the disputed demand has been recovered on 7[th]September,2021 from the refunds determined by the Respondents under Section 143(1)of the Income Tax Act, 1961 [for short ‘Act’] for the Assessment Year 2020-21 despite a stay order dated 11[th]March, 2020 in favour of thePetitioner whereby PCIT-21 had granted stay of the demand till the disposalof the first appeal or 30[th]September, 2020 whichever was earlier. He statesthat the petitioner preferred an application dated 31[st]January, 2022 beforethe respondents for extension of stay of demand as granted vide order dated11[th]March, 2020 and not to take any coercive measures for recovery ofdemand till the disposal of the appeal.He, however, states that saidapplication is pending disposal till date. 3.Learned counsel for the Petitioner further points out that no noticeunder Section 245 of the Act has been issued to the Petitioner, which is amandatory requirement before adjusting any refund due to the Petitioner. Hestates that the adjustment has been made in violation of the principle ofnatural justice as no opportunity of being heard had been granted to thePetitioner prior to such adjustment. 4.Mr. Kunal Sharma, learned counsel for the Respondents-Revenue oninstruction states that an adjustment order under Section 245 of the Act hadbeen passed on 28[th]January, 2022. He further states that as the stay orderdated 11[th]March, 2020 was limited in time, the respondent was well withinits right to adjust the refund. 5.This Court is of the view that the restrictive stay order dated 11[th]March, 2020 issued by the Respondents granting stay to the petitioner onlytill 30[th]September, 2020 is in violation of the directions of the CBDT aswell as previous orders of this Court wherein it has been held that theAssessing Officer must grant stay till the disposal of the first appeal. 6.Also, keeping in view the fact that the adjustments have been made on7[th]September, 2021 i.e. prior to issuance of a set off of refund order dated 28[th]January, 2022 under Section 245, this Court is of the opinion that thePetitioner is entitled to refund of adjustment made in excess of 10% of thetotal disputed tax demand. 7.Consequently, this Court directs the respondents to refund to thepetitioner the amount adjusted in excess of 10% of the disputed tax demandsfor the Assessment Year 2017-18 within four weeks along with statutoryinterest. With the aforesaid direction,thepresentwritpetition andapplications are disposed of. MANMOHAN, J MAY 20, 2022AS MANMEET PRITAM SINGH ARORA, J