GMR Airports Ltd. V. Assistant Director of Income-Tax Centralised Processing Center (CPC), Income Tax Department and Principal Commissioner of Income-Tax, Central

WP/860/2022

AI Insights

The case involves GMR Airports Ltd., which filed a writ petition against the Assistant Director of Income-Tax and the Principal Commissioner of Income-Tax, challenging the adjustment of a tax refund for the assessment year 2020-21 against a disputed demand for the assessment year 2017-18. The petitioner argued that the adjustment was made without proper notice under Section 245 of the Income Tax Act, 1961, despite the fact that part of the disputed amount was stayed due to an appeal. The court found that the adjustment was indeed made in violation of the procedural requirements of the Act, leading to the setting aside of the order and directing a proper reconsideration process.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 798862 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 09-02-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K V ARAVIND
• Assessee Lawyers: SANDEEP HUILGOL; BALRAM RAO
• Keywords: Disputed Demand; Income tax refund adjustment; Notice Requirement; Rectification Application
• Section: 154; 245

Judgement Text

"1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 9TH DAY OF FEBRUARY, 2022 BEFORE THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV WRIT PETITION No.860/2022 (T-IT) BETWEEN: GMR AIRPORTS LTD., HAVING ITS OFFICE AT NO.25/1, SKIP HOUSE, MUSEUM ROAD BENGALURU - 560 025 REPRESENTED BY ITS DIRECTOR SRI INDANA PRABHAKARA RAO AGED ABOUT 65 YEARS PAN: AAACM7791H … PETITIONER (BY SRI SANDEEP HUILGOL, SENIOR ADVOCATE FOR SRI BALRAM R. RAO, ADVOCATE) AND: 1. ASSISTANT DIRECTOR OF INCOME-TAX CENTRALISED PROCESSING CENTER (CPC), INCOME TAX DEPARTMENT POST BAG NO.1, ELECTRONIC CITY POST OFFICE BANGALORE - 560 500. 2. PRINCIPAL COMMISSIONER OF INCOME-TAX, CENTRAL, CENTRAL REVENUE BUILDING, 3RD FLOOR, QUEENS ROAD, BANGALORE - 560 001. … RESPONDENTS (BY SRI K.V. ARAVIND, ADVOCATE) 2 THIS WRIT PETITION IS FILED UNDER ARTICLE 226 AND 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDER DATED 3RD DECEMBER 2021 UNDER SECTION 154 ISSUED BY THE CPC IN ANNEXURE-B ADJUSTING THE ENTIRE REFUND FOR AY 2020-21 AGAINST THE DISPUTED DEMAND FOR AY 2017-18 AND ETC. THIS WRIT PETITION COMING ON FOR ORDERS THIS DAY, THE COURT, MADE THE FOLLOWING: ORDER Petitioner has sought for setting aside the action of the respondent in adjusting the refund claimed by the petitioner as regards the alleged dues relating to the assessment year 2017-18. 2. It is stated that the petitioner has filed his return of income for the year 2020-21 which was processed by the Authorities. It is further submitted that the petitioner had filed application under Section 154 of the Income Tax Act, 1961 (for short 'the Act') seeking rectification of the intimation dated 06.08.2021 and an order came to be passed under Section 154 of the Act, copy of which is enclosed at Annexure-B. 3 3. Petitioner submits that the refund entitled to the petitioner has been adjusted to the demands for the assessment year 2017-18 even as regards to amount which was the subject matter of appeal and was stayed by virtue of the petitioner depositing 20% of the disputed amount while filing the appeal. Learned Senior counsel appearing for the petitioner submits that the adjustment made in the order under Section 154 of the Act without notice under Section 245 of the Act is bad in law. 4. In light of the submission that there was no intimation under Section 245 of the Act as regards to the adjustment that has been effected while passing the order under Section 154 of the Act, the action of the respondent - Authority is liable to be set aside as being in violation of Section 245 of the Act. 5. Accordingly, petition is disposed off and the order under Section 154 of the Act insofar as it relates to adjustment of the petitioner's refund towards the demand for the assessment year 2017-18 is set aside. The 4 respondents - Authority to reconsider the refund of the petitioner and if adjustment is sought to be made towards demand, notice under Section 245 ought to be issued and opportunity to file objections must be granted and order to be passed. The said process to be completed within eight weeks from the date of release of this order. 6. In light of the above, the petition is disposed off. Sd/- JUDGE VP "