M/S. Asia Corporation, Mumbai v. Joint Commissioner Of Income Tax

hvn IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 783 OF 1999 M/s. Asia Corporation, Mumbai ...Petitioner Versus Joint Commissioner of Income Tax ...Respondent Mr. K.B. Bhujle for Petitioner. Mr. A.S. Shivsharan for Respondent. CORAM : F.I. REBELLO & D.G. KARNIK, JJ. DATED : SEPTEMBER 14, 2009 P.C. The Petitioners had approached this court in respect of an adjustment of the refund of Rs.30.70,898/- for the assessment year 1997-98. The Petitioners are a partnership firm. The Petitioner firm filed its return for the assessment year 1997-98 on 31.10.1997 and claimed refund. On 30.11.1998 the first respondent passed an order under Section 140(1)(a) for Assessment Year 1997-98 determining the refund amount of Rs.30,70,898/-. That copy of the order was served on the Petitioner on 10.3.1999. In the order passed the refund was adjusted against the dues for A.Y. 1993-94 in respect of another assessee which was (A.O.P.) of which Petitioner was one of the members. The grievance of the Petitioner is that this order was passed without complying with the mandatory requirements of section 245 of the Income Tax Act. Our attention is invited to the provisions which mandates that the refund can be adjusted against the dues of the persons to whom refund is due after giving intimation in writing to such persons of the action proposed to be taken under the section. It is submitted that no notice as required under section 245 was served on the Petitioner proposing to make adjustment. This it is submitted would render hte adjustment illegal and consequently the order making adjustment has to be set aside. Reliance for that purpose is placed on the judgment of this court in Suresh Jain Vs. A.N. Shaikh 16[th] Income Tax Officer and Others 165 ITR 151 which was confirmed by the Division Bench of this Court in A.N. Shaikh Vs. S.B. Jain 165 ITR 86. After considering the language of the section and the judgment of the Coordinate Bench of this court, we find no reason to take a different view than the view taken by the Coordinate Bench of this court, namely failure to comply with the mandatory requirement of section 245, would result in the adjustment made becoming illegal. Consequently, this petition will have to be allowed in terms of prayer Clause (a). Petitioner has also made a prayer for refund of the said amount. In so far as prayer for refund is concerned, it will be open for the respondents, if they are so entitled in to law, to take such steps within three months from today. If such steps are taken, matter to proceed according to law. If no such steps are taken, petition made absolute in terms of Prayer Clause (b). Considering that we are disposing of this petition on the above sole ground the other contentions raised are kept open for consideration in the event the Petitioners would be aggrieved by any order passed against them in respect of the present subject matter arising from the Petition. (D.G. KARNIK,J.) (F.I. REBELLO,J.)