Wpt v. The Principal Commissioner Of Income Tax-Raipur -2, Central Revenue Buildingcivil Lines, Raipur Chhattisgarh

Digitallysigned bySHYNASHYNAAJAYAJAYDate:2025.03.2515:14:49+0530 2025:CGHC:14045 NAFR HIGH COURT OF CHHATTISGARH AT BILASPUR WPT No. 6 of 2025 1 - Chhattisgarh Sakh Sahkari Samiti Maryadit, Sector - 1, Bhilai, A Co-operativeSociety Regd. Under the C.G. Co-operative Societies Act, Through Its ManagerJagnik Kumar, Yadav, S/o Budhram Yadav, Aged About 59 Years, Resident OfDahaliya 661, Block ‘B’ C.G.H.B., Talpuri, Ruabandha, Bhilai, District DurgChhattisgarh. ... Petitioner(s) versus 1 - The Principal Commissioner Of Income Tax-Raipur -2, Central Revenue BuildingCivil Lines, Raipur Chhattisgarh. 2 - Assistant Director of Income Tax, Central Processing Centre (CPC), Post Bang.No. 1, Electronic City Post Office, Bangluru 560500 (Karnataka). 3 - The Income Tax Officer, Ward - 1(3), Aaykar Bhawan, New Civic Centre, BhilaiChhattisgarh. ... Respondent(s) For Petitioner(s) :Mr. Mool Chand Jain, Advocate For Respondent(s) :Mr. Ajay Kumrani, Advocate on behalf of Mr. Amit Choudhari, Advocate SB.: Hon'ble Mr. Justice Deepak Kumar Tiwari Order On Board 24/03/2025 1. Challenge in the present Writ Petition is to the Intimation dated18.6.2024 issued under Section 245 of the Income Tax Act, 1961 (inshort “the Act”) regarding adjustment of the refund(s) due against theoutstanding demand for the Assessment Year 2022-23. In this regard,an appeal before the CIT (Appeals), NFAC, Delhi, is pending foradjudication. By way of this petition, a prayer has also been made forquashing the aforesaid intimation.18.6.2024 issued under Section 245 of the Income Tax Act, 1961 (inshort “the Act”) regarding adjustment of the refund(s) due against theoutstanding demand for the Assessment Year 2022-23. In this regard,an appeal before the CIT (Appeals), NFAC, Delhi, is pending foradjudication. By way of this petition, a prayer has also been made forquashing the aforesaid intimation. 2. Necessary facts of the case are that after passing of the order underSection 254 of the Act by the Income Tax Appellate Tribunal, Raipur forthe Assessment Years 2013-14, 2018-19 and 2020-21, an amount ofRs.1,16,25,991/- was determined towards refund. The Revenue senta proposal for necessary approval, which has also been accorded.Further, an outstanding demand to the tune of Rs.1,54,80,300/- wasraised for the Financial Year 2022-23 under Section 143(3) of the Act.The petitioner challenged the aforesaid outstanding demandon theground that for the Assessment Year 2022-23, similar dis-allowancehas been made by the Revenue though it is a covered issue that aCredit Cooperative Society is eligible for deduction of the entire interestincome under Section 80P of the Income Tax Act, for which, the IncomeTax Appellate Tribunal has allowed the refund. When the petitionerapproached the authority for refund of the whole amount, the petitionerwas advised to pre-deposit 20% of the demand raised for the FinancialYear 2022-23. The petitioner prayed to adjust 20% of the demandand release the balance amount of the refund, however, the same wasSection 254 of the Act by the Income Tax Appellate Tribunal, Raipur forthe Assessment Years 2013-14, 2018-19 and 2020-21, an amount ofRs.1,16,25,991/- was determined towards refund. The Revenue senta proposal for necessary approval, which has also been accorded.Further, an outstanding demand to the tune of Rs.1,54,80,300/- wasraised for the Financial Year 2022-23 under Section 143(3) of the Act.The petitioner challenged the aforesaid outstanding demandon theground that for the Assessment Year 2022-23, similar dis-allowancehas been made by the Revenue though it is a covered issue that aCredit Cooperative Society is eligible for deduction of the entire interestincome under Section 80P of the Income Tax Act, for which, the IncomeTax Appellate Tribunal has allowed the refund. When the petitionerapproached the authority for refund of the whole amount, the petitionerwas advised to pre-deposit 20% of the demand raised for the FinancialYear 2022-23. The petitioner prayed to adjust 20% of the demandand release the balance amount of the refund, however, the same was also not accepted by the Revenue. Hence, this Petition. 3. Learned counsel for the petitioner would submit that the issue as to theinterest income received/earned by the Cooperative Societies onamounts deposited by the assessee Society in commercial/nationalisedbanks, which was eligible for deduction under Section 80(P) (2)(a)(i) ofthe Act, has already been determined and the Income Tax AppellateTribunal has also allowed the Appeal in respect of the earlierAssessment Years i.e. 2013-14, 2018-19 and 2020-21 and ordered forrefund of Rs.1,16,25,991/-. He would further submitthat regarding thesimilar income accumulated from the interest for the deposit in theCommercial Bank, a demand of Rs.1,54,80,300/- has been raised.Since the issue has already been decided, the Revenue has nojurisdiction to raise such demand. He would further submit that even asper the Office Memorandum dated 29.2.2016 (as amended by OMdated 31.7.2017), the Assessing Officers should have ordinarily, interms of para 4(A) adjusted not more than 20% of the disputed demandconsidering the fact that an appeal concerning the disputed demandwas pending before the CIT(A). He submits that though the petitionermade a concession for refund of the balance amount after deducting20% of the outstanding demand, but the same was not accepted bythe authorities. He would submit that in the matter of Maruti SuzukiIndia Ltd. Vs. Deputy Commissioner of Income Tax, reported in(2012) 347 ITR 43 (Delhi) (judgment passed by the Delhi HighCourt), in the similar circumstances, an identical ground had been set-aside by the Tribunal with regard to the previous assessment years. Ithas been further observed that this is not a valid or good ground toignore the decisions of the appellate authorities and is also not a good ground to not to stay demand or to allow adjustment under Section 245of the Act. It has been further observed in para 26 that the Revenuehas not not able to show a good cause or reason as to why adjustmentshould be allowed to recover demand on issues that have beendecided in favour of the petitioner therein for other years. 4. Replying the aforesaid submissions, learned counsel for the Revenuewould submit that Section 245 of the Act permits the Revenue to setoff any demand from the amount to be refunded but the only conditionis of intimation in writing to such person against whom action isproposed to be taken. He would further submit that in the present case,intimation has already been sent, therefore, the mandate under Section245 of the Act was satisfied by the Revenue before making adjustment.However, on instructions, he would submit that if the petitioner deposits20% of the disputed amount , Revenue shall return the whole refundedamount as demanded by the petitioner. Further, counsel for theRevenue would submit that against the order of the Income TaxAppellate Tribunal with regard to the earlier Assessment Year(s), a TaxAppeal has been filed and the same has been disposed of in view ofthe CBDT Circular No.5/2024, wherein, it has been observed that noappeal would lie if the tax effectis below Rs.2 crores. Therefore,learned counsel would submit that the said issue has not attained thefinality. 5. Heard learned counsel for the parties and also perused the documentsannexed with the petition.annexed with the petition. 6. Section 245 of the Act deals with the set off and withholding of refundsin certain cases. For the sake of brevity, the said Section is reproducedhereunder :in certain cases. For the sake of brevity, the said Section is reproducedhereunder : 245. Set off and withholding of refunds in certaincases – (1) Where under any of the provisions of this Act,a refund becomes due or is found to be due to anyperson, the Assessing Officer or Commissioner orPrincipal Commissioner or Chief Commissioner orPrincipal Chief Commissioner, as the case may be, may,in lieu of payment of the refund, set off the amount to berefunded or any part of that amount, against the sum, ifany, remaining payable under this Act by the person towhom the refund is due, after giving an intimation inwriting to such person of the action proposed to be takenunder this sub-section. (2) Where a part of the refund is set off under the provisionsof sub-section (1), or where no such amount is set off, andrefund becomes due to a person, and the Assessing Officer,having regard to the fact that proceedings for assessment orreassessment are pending in the case of such person, [51][***]he may, for reasons to be recorded in writing and with theprevious approval of the Principal Commissioner or theCommissioner, as the case may be, withhold the refund up to52[sixty days from] the date on which such assessment orreassessment is made.] 7. On reading of the aforesaid provision, it is explicit that this provisionpermits the Revenue to set off any demand from the amount to berefunded subject to the only condition of intimation in writing to suchperson against whom action is proposed to be taken. In the presentcase, the Revenue has complied with the said provision.permits the Revenue to set off any demand from the amount to berefunded subject to the only condition of intimation in writing to suchperson against whom action is proposed to be taken. In the presentcase, the Revenue has complied with the said provision. 7. On reading of the aforesaid provision, it is explicit that this provisionpermits the Revenue to set off any demand from the amount to berefunded subject to the only condition of intimation in writing to suchperson against whom action is proposed to be taken. In the presentcase, the Revenue has complied with the said provision.permits the Revenue to set off any demand from the amount to berefunded subject to the only condition of intimation in writing to suchperson against whom action is proposed to be taken. In the presentcase, the Revenue has complied with the said provision. 8. For the foregoing, this Court does not find any jurisdictional error inissuing the subject intimation or taking action by the Revenue underSection 245 of the Act. However, considering the fact that an appealhas been preferred against the outstanding amount and disallowanceissuing the subject intimation or taking action by the Revenue underSection 245 of the Act. However, considering the fact that an appealhas been preferred against the outstanding amount and disallowance has been accepted for the relevant Assessment Years in an identicalissue, as submitted by learned counsel for the petitioner, this Court is ofthe view that a good case is made out in favour of the assessee forissuance of a direction to the Appellate Authority that till adjudication ofstay application, pre-deposit of 20% of the disputed amount be notinsisted upon. 9. Considering the facts and circumstances of the case and in light of theaforesaid discussion, this Court deems it appropriate to direct theAppellate Authority to decide the stay application without insisting uponpre-deposit of 20% of the outstanding demand. The petitioner is alsodirected to demonstrate before the Appellate Authority that the identicalissue has already been covered upin the earlier Assessment Years.Ordered accordingly.aforesaid discussion, this Court deems it appropriate to direct theAppellate Authority to decide the stay application without insisting uponpre-deposit of 20% of the outstanding demand. The petitioner is alsodirected to demonstrate before the Appellate Authority that the identicalissue has already been covered upin the earlier Assessment Years.Ordered accordingly. 10. It is made clear that if thesaid issue is not covered up,the AppellateAuthority shall decide the subject appeal in an expeditious manner,preferably within a period of 90 days, from the date of receipt of a copyof this order.Authority shall decide the subject appeal in an expeditious manner,preferably within a period of 90 days, from the date of receipt of a copyof this order. 11. With the aforesaid observations/directions, this Petition is disposed of . Sd/- (Deepak Kumar Tiwari) Judge