PRITI MILAN MEHTA, Mumbai V. DCIT, CPC, BENGALURU

ITA 3179/MUM/2022

AI Insights

The case involves appeals by Priti Milan Mehta against the orders of the CIT(A) which upheld the adjustment of tax refunds for AY 2017-18 and 2019-20 against a protective demand for AY 2008-09. The primary legal issue was whether the adjustment of refunds against a protective demand was permissible when the protective addition had not yet been converted into a substantive addition. The Tribunal found that such an adjustment was not permissible, as it effectively amounted to an enforcement of a demand that was not yet crystallized.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300124 (ITAT-MUMBAI)
• Duration Of Justice: 1 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-01-2023
• Assessment Year: 2019-2020
• Appeal Filed On: 15-12-2022
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, MUMBAI BEFORE SHRI AMIT SHUKLA, JM & SHRI S RIFAUR RAHMAN, AM आयकरअपीलसं./ I.T.A. No. 3178 & 3179/Mum/2022 (निर्धारणवर्ा / Assessment Year: 2017-18 & 2019-20) Priti Milan Mehta 2302 Bldg No.5, Raheja Classique Road, New Link Road, Andheri(W) 400053 बिधम/ Vs. Deputy Commissioner Of Income Tax, CPC Centralized Processing Central, Income Tax Department, Bengaluru, Karnataka 560500 स्थायीलेखासं./जीआइआरसं./PAN No. AAAPH1095G (अपीलाथी/Appellant) : (प्रत्यथी / Respondent) अपीलाथीकीओरसे/ Appellant by : Shri Hiro Rai/ Ritu Panjabi प्रत्यथीकीओरसे/Respondent by : Shri Minal Kamble Sr.DR. सुनवाईकीतारीख/ Date of Hearing : 31.01.2023 घोषणाकीतारीख / Date of Pronouncement : 31 .01.2023 आदेश / O R D E R Per Amit Shukla, Judicial Member: The aforesaid appeal has been filed by the assessee against the combined orders dated 21.10.2022, passed by Ld.CIT(A),47 2 I . T . A . N o . 3 1 7 8 & 3 1 7 9/ M u m / 2 0 2 2 PRITI MILAN MEHTA Mumbai, for the AY 2017-18 & 2019-20. In relation to adjustment of refund made vide intimation u/s 143(1). 2. Before us, the Ld. Counsel, submitted that in the return of income for the AY 2019-20 & 2017-18, refund was determined along with the interest u/s 244 A. However, the said refund have adjusted against a demand of Rs. 1,72,02,260/- which was on account of protective addition made in the assessment for AY 2008- 09. For AY 2017-18 the refund was of Rs. 1,95,422/-; and for the AY 2019-20 the refund was Rs. 4,46,650/-. The Ld. CIT(A) has upheld the adjustment of the refund against the protective demand for AY 2008-09 on the ground that the issue as yet not been crystallized in the appellate proceedings. The Ld. Counsel informed that though the appeal for AY 2008-9 is pending before the Tribunal. However, as on date the addition is on protective basis and once, the addition has been made on protective basis, no demand can be enforced. Thus, no adjustment of protective demand can be made against the refund due to the assessee, because it tantamount to recovery of demand. 3 I . T . A . N o . 3 1 7 8 & 3 1 7 9/ M u m / 2 0 2 2 PRITI MILAN MEHTA 3. After hearing both the parties and on perusal of the record, we find that it not an dispute that the in the return of income filed for AY 2017-18 on 30.07.2017, refund was claimed and same was also issued by the CPC. However, the refund determined has been adjusted against the demand for AY 2008-09 which was an account protective addition made by the AO. In support the assessment order for AY 2008-09 has also been filed before us. The entire demand arising out of addition of Rs. 147,20,2660/- was purely on account of protective addition. Once the fate of protective addition is not determined and till it is converted into substantive addition, no demand can be enforced nor can be adjusted against any refund. In case if demand is crystallized, if at all, protective addition is converted into substantive, then AO has all the powers of recovery of demand. Accordingly, Assessing Officer is directed to verify and if the tax has been adjusted against the refund against the demand created out of protective addition for AY 2008-09, then same cannot be adjusted and refund has to granted. 4. With this direction both the appeals of the Assessee are allowed. 4 I . T . A . N o . 3 1 7 8 & 3 1 7 9/ M u m / 2 0 2 2 PRITI MILAN MEHTA Orders pronounced in the open court on 31 st Jan, 2023. Sd/- Sd/- (S Rifaur Rahman) (Amit Shukla) Accountant Member Judicial Member मुंबई Mumbai;ददनांक Dated : 31.01.2023 Mrs. Urmila आदेशकीप्रनिनिनिअग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी/ The Appellant 2. प्रत्यथी/ The Respondent 3. आयकरआयुक्त(अपील) / The CIT(A) 4. आयकरआयुक्त/ CIT- concerned 5. दवभागीयप्रदतदनदध, आयकरअपीलीयअदधकरण, मुंबई/ DR, ITAT, Mumbai 6. गार्डफाईल / Guard File आदेशधिुसधर/ BY ORDER, .उि/सहधयकिंजीकधर (Dy./Asstt.Registrar) आयकरअिीिीयअनर्करण, मुंबई/ ITAT, Mumbai