+ W.p.(C) v. Deputy Commissioner Of Income Tax Circle 16 1 New Delhi & Ors

$~39 IN THE HIGH COURT OF DELHI AT NEW DELHI+W.P.(C) 16531/2024MOTHERSON TECHNOLOGY SERVICES LIMITEDMOTHERSON TECHNOLOGY SERVICES LIMITED .....PetitionerThrough:Ms Ananya Kapoor, Mr UtkarshaKumar Gupta and Mr Sanat Kapoor,Advocates.Kumar Gupta and Mr Sanat Kapoor,Advocates. versus DEPUTY COMMISSIONER OF INCOME TAXCIRCLE 16 1 NEW DELHI & ORS. .....RespondentsThrough:MrGauravGupta,SSC,MrShivendra Singh and Mr Yojit Pareek,JSCs.Shivendra Singh and Mr Yojit Pareek,JSCs. CORAM:HON'BLE THE ACTING CHIEF JUSTICEHON'BLE MR. JUSTICE TUSHAR RAO GEDELAO R D E R%12.12.2024 1.The petitioner has filed the present petition, inter alia, praying as under :- “A. Issue a writ in the nature of Mandamusdirecting the Respondents to issue refund of Rs.12,61,85,164/- along with up-to-date interest forAY 2023-24 which is illegally adjusted against thenon-recoverable demand of AY 2016-17 as theaction of the Respondents is unjust, arbitrary andagainst the provision of the Income Tax Act, 1961;B. Issue a writ in the nature of Certiorari quashingthe intimation issued under Section 245 of the Actdated 19.01.2024 illegally adjusting refund due tothe Petitioner for AY 2023-24 against the non-recoverable demand of AY 2016-17;C. Issue any other Writ, order, or Direction which this Hon’ble Court may deem fit and proper in thefacts and circumstances of the case;” 2.The petitioner had filed its return of income for the assessment year(AY) 2016-17 declaring a total income of ₹13,01,14,770/-. The same was selected for scrutiny and the assessment proceedings culminated into theassessment order dated 13.01.2020 and the Assessing Officer (AO)determined the petitioner’s income at ₹37,13,20,003/-. The petitioner challenged the assessment order before the Commissioner of Income Tax(Appeals) [hereafter the CIT(A)]. The petitioner also sought a stay of thedemand which was granted subject to deposit of 20% of the demand alongwith interest which was quantified at ₹2,64,27,224/-. The said amount was recovered from the refund due to the petitioner for the AYs’ 2007-08, 2011-12 and 2015-16. 3.The petitioner is aggrieved by the intimation dated 19.01.2024 issuedunder Section 245 of the Income Tax Act, 1961 (hereafter the Act)informing the petitioner of the adjustment of ₹12,81,51,872/- along with the interest, which was due to the petitioner against an outstanding demand forAY 2016-17. The Central Processing Centre, Bangalore, after adjusting thesaid demand, has refunded the amount of ₹19,66,666/- to the petitioner. 4.It is the case of the petitioner that the refunds due to the petitionercould not be adjusted against the outstanding demand for AY 2016-17beyond 20% of the said demand, being a condition imposed for the grant ofstay order. 5.We find merit in the aforesaid contention. Para no.4 (E) (iii) of theoffice memorandum dated 29.02.2016 issued by the Central Board of DirectTaxes (CBDT) expressly provides that the AO may impose such conditions for grant of the stay including right to adjust refund, if any, against thedemand to the extent required for grant of stay, subject to the conditions asprovided under Section 245 of the Act. Para No.4(E)(iii) of the circulardated 29.02.2016 is set out below:- “4. In order to streamline the process of grant ofstay and standardize the quantum of lump sumpayment required to be made by the assessee as apre-condition for stay of demand disputed beforeCIT(A), the following modified guidelines arebeing issued in partial modification of instructionNo. 1914:A to D******(E) In granting stay, the Assessing Officer mayimpose such conditions as he may think fit. Hemay, inter alia,-stay and standardize the quantum of lump sumpayment required to be made by the assessee as apre-condition for stay of demand disputed beforeCIT(A), the following modified guidelines arebeing issued in partial modification of instructionNo. 1914:A to D******(E) In granting stay, the Assessing Officer mayimpose such conditions as he may think fit. Hemay, inter alia,- “4. In order to streamline the process of grant ofstay and standardize the quantum of lump sumpayment required to be made by the assessee as apre-condition for stay of demand disputed beforeCIT(A), the following modified guidelines arebeing issued in partial modification of instructionNo. 1914:A to D******(E) In granting stay, the Assessing Officer mayimpose such conditions as he may think fit. Hemay, inter alia,-stay and standardize the quantum of lump sumpayment required to be made by the assessee as apre-condition for stay of demand disputed beforeCIT(A), the following modified guidelines arebeing issued in partial modification of instructionNo. 1914:A to D******(E) In granting stay, the Assessing Officer mayimpose such conditions as he may think fit. Hemay, inter alia,- (i) & (ii)******;(iii) reserve the right to adjust refunds arising, ifany, against the demand, to the extent of theamount required for granting stay and subject to theprovisions of section 245.”(iii) reserve the right to adjust refunds arising, ifany, against the demand, to the extent of theamount required for granting stay and subject to theprovisions of section 245.” 6.In view of the above, we consider it apposite to direct the respondentto process the petitioner’s refund along with the applicable interest within aperiod of eight weeks from date to the extent of amount adjusted against thebalance 80% of the demand for AY 2016-17. 7.The petition is allowed and disposed of in the aforesaid terms. DECEMBER 12, 2024M VIBHU BAKHRU, ACJTUSHAR RAO GEDELA, J Click here to check corrigendum, if any