IBM INDIA PRIVATE LIMITED V. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1)

WP/19103/2024

AI Insights

The case involves IBM India Private Limited, the petitioner, seeking a refund of substantial amounts determined due for the assessment years 2010-11, 2011-12, and 2012-13 by the Income Tax Department. The petitioner contested the adjustments made by the respondents against these refunds to cover alleged outstanding demands for other assessment years. The court examined the correspondence and actions taken by both parties, including the orders giving effect to the appeals filed by the petitioner and the subsequent adjustments proposed by the respondents. The court concluded that the adjustments were inappropriate as there were no outstanding demands for the years to which the refunds were adjusted.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 753561 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 10-09-2024
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Section 244A of the Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M THIRUMALESH; ARAVIND CHAVAN
• Assessee Lawyers: TANMAYEE RAJKUMAR
• Keywords: Adjustment of Refund; Assessment Year; Income Tax Refund; Legal Proceedings; Order giving effect
• Section: 244A

Judgement Text

" - 1 - NC: 2024:KHC:36818 WP No. 19103 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 10TH DAY OF SEPTEMBER, 2024 BEFORE THE HON'BLE MR JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 19103 OF 2024 (T-IT) BETWEEN: 1. IBM INDIA PRIVATE LIMITED A PRIVATE LIMITED COMPANY INCORPORATED UNDER THE PROVISIONS OF THE COMPANIES ACT, 1956 HAVING OFFICE AT NO. 12, SUBRAMANYA ARCADE-1, BANNERGHATTA MAIN ROAD, BANGALORE - 560 029 REPRESENTED HEREIN BY ITS COUNTRY TAX LEADER MR. SHANKAR RAMJEE …PETITIONER (BY SRI. TANMAYEE RAJKUMAR, ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1) CIRCLE 3(1)(1) BMTC BUILDING, 80 FEET ROAD, KORAMANGALA BANGALORE - 560 095 2. THE PRINCIPAL COMMISSIONER OF INCOME TAX -3 BMTC BUILDING, 80 FEET ROAD, KORAMANGALA, BANGALORE - 560 095 3. ASSISTANT DIRECTOR OF INCOME-TAX CENTRALISED PROCESSING CENTRE, INCOME TAX DEPARTMENT 1ST FLOOR, PRESTIGE ALPHA NO 48/1 48/2 BERATENAAGRAHARA BEGUR, HOSUR ROAD, UTTARAHALLI HOBLI, BENGALURU - 560 100 Digitally signed by LEELAVATHI S R Location: HIGH COURT OF KARNATAKA - 2 - NC: 2024:KHC:36818 WP No. 19103 of 2024 4. THE DIRECTORATE GENERAL OF INCOME TAX (SYSTEMS) CENTRAL BOARD OF DIRECT TAXES, MINISTRY OF FINANCE NEW DELHI - 110 001 …RESPONDENTS (BY SRI. M. THIRUMALESH, ADVOCATE FOR R1, R2 AND R4 SRI. ARAVIND V. CHAVAN, ADVOCATE FOR R3) THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA PRAYING TO DIRECT THE RESPONDENT TO FORTHWITH REFUND AN AMOUNT OF RS. 761,60,04,157/- DETERMINED AS DUE FOR THE ASSESSMENT YEAR 2010-11 ALONG WITH APPLICABLE INTEREST UNTIL THE DATE OF GRAND OF REFUND, DIRECTING THE RESPONDENTS TO FORTHWITH REFUND AN AMOUNT OF RS. 490,74,46,021/- DETERMINED AS DUE FOR THE ASSESSMENT YEAR 2011-12 ALONG WITH APPLICABLE INTEREST UNTIL THE DATE OF GRANT OF REFUND DIRECTING THE RESPONDENT TO FORTHWITH REFUND AN AMOUNT OF RS. 776,68,51,553/- DETERMINED AS DUE FOR THE AY 2012-13 ALONG WITH APPLICABLE INTEREST UNTIL THE DATE OF GRANT OF REFUND. THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S.R.KRISHNA KUMAR ORAL ORDER In this petition, petitioner seeks the following reliefs: (i) Directing the Respondents to forthwith refund an amount of Rs.761,60,04,157/- determined as due for the assessment year 2010-11, along with applicable interest until the date of grant of refund; (ii) Directing the Respondents to forthwith refund an amount of Rs.490,74,46,021/- determined as due for the assessment year 2011-12, along with applicable interest until the date of grant of refund; - 3 - NC: 2024:KHC:36818 WP No. 19103 of 2024 (iii) Directing the Respondents to forthwith refund an amount of Rs.776,68,51,553/- determined as due for the assessment year 2012-13, along with applicable interest until the date of grant of refund; and iv) Pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interest of justice and equity. 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. 3. A perusal of the material on record will indicate that in relation to assessment year 2010-11, 2011-12 and 2012-13, assessment orders were passed by the Assessing Officer, aggrieved by which, the petitioner filed appeals, which were disposed of, pursuant to which, orders giving effect to (OGE) were passed by respondent No.1 on 27.03.2024 for the assessment year 2010-11, 27.03.2024 for the assessment year 2011-12 and 27.03.2024 for the assessment year 2012-13 determining the amount payable in favour of the petitioners. Subsequently, on 29.04.2024, the assessing officer passed OGE determining the refund in a sum of Rs.57,88,44,860/- in relation to the assessment year 2014-15, which was followed by the intimation issued by respondent No.3 dated 17.05.2024 in respect of the assessment - 4 - NC: 2024:KHC:36818 WP No. 19103 of 2024 year 2011-12 proposing to adjust the refund determined for the said year against alleged demand outstanding for about 10 assessment years. Subsequently, the petitioner also received an e-mail dated 18.05.2020 from respondent No.3 intimating about some outstanding demand for about 12 assessment years to which the petitioner has filed its objections objecting the proposed adjustment and disputing the adjustment made by the respondent. 4. Subsequently, after the correspondence between the petitioner and respondent as well as meetings between them, the respondents issued intimations dated 08.07.2024 proposing to adjust the refund for the assessment year 2010-11 and 2012-13. In the meanwhile, the petitioner also noticed that the refund for the assessment year 2010-11 and 2011-12 were already adjusted in entirety to the tax for the assessment years 2005-06 and 2014-15. Learned counsel for the petitioner submits that insofar as assessment year 2005-06, 2014-15, there are no demands by the respondent and consequently, the question of adjusting the same as against refund payable in favour of the petitioner for the assessment years 2010-11 and 2011-12 would not arise. Consequently, necessary directions are to be issued to refund - 5 - NC: 2024:KHC:36818 WP No. 19103 of 2024 determined amounts in favour of the petitioner together with applicable interest under Section 244A of the Income Tax Act within stipulated time frame. 5. Per contra, learned counsel for the respondents supports the impugned order and submits that there is no merit in the petition and the same is liable to be dismissed. 6. As rightly contended by learned counsel for the petitioner, perusal of the material on record would clearly indicate that the petitioner is entitled to refund of the amounts already determined in relation to assessment years 2010-11, 2011-12 and 2012-13 as stated supra. Further, in the absence of any demand in relation to the assessment years 2005-06 and 2014-15, the respondents are clearly not entitled to adjust any amounts in respect of the said years particularly, when the amounts to be refunded in favour of the petitioner had already been determined by the respondent. 7. Under these circumstances, I am of the view that the petition deserves to be allowed and respondents are directed to refund the amounts payable in favour of the petitioner together with - 6 - NC: 2024:KHC:36818 WP No. 19103 of 2024 applicable interest under Section 244A within a stipulated time frame. 8. In the result, I pass the following: ORDER i) The petition is hereby allowed. ii) Respondents are directed to refund to the petitioner a sum of Rs.7,61,60,04,157/- for the assessment year 2010-11, a sum of Rs.4,90,74,46,021/- for the assessment year 2011-12 and a sum of Rs.7,76,68,51,553/- for the assessment year 2012-13. iii) Respondents are directed to refund the aforesaid amounts together with applicable interest as contemplated under Section 244A of the Income Tax Act, in favour of the petitioner within a period of seven weeks from the date of receipt of copy of this order. Sd/- (S.R.KRISHNA KUMAR) JUDGE MDS List No.: 1 Sl No.: 9 "