Smt. Seema Chopra V. Commissioner of Income Tax (Appeals) and another

CWP/10004/2010

AI Insights

The case involves Smt. Seema Chopra, a petitioner and partner of the dissolved firm M/s Lakshmi Enterprises, who challenged the withholding of her tax refund by the Income Tax Department. The refund was adjusted against the dues of M/s Hind Samachar Ltd., a sister concern, without following the proper legal procedure or obtaining her consent. The court examined whether the adjustment of the refund was legally sustainable, considering the provisions of Section 245 of the Income Tax Act, 1961, which allows for such adjustments under specific conditions.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 796708 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 15-09-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VIVEK SETHI
• Assessee Lawyers: AKSHAY BHAN
• Keywords: Adjustment of Refund; Income Tax Refund; Excess Payment of Tax; Withholding of Refund
• Section: 245

Judgement Text

"IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.W.P. No.10004 of 2010 & other connected cases being CWP Nos. 10010, 10029, 10038, 10040, 10068, 10080 and 10081 of 2010 Date of decision: 15.9.2010 Smt. Seema Chopra. -----Petitioner. Vs. Commissioner of Income Tax (Appeals) & another. -----Respondents CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Akshay Bhan, Advocate for the petitioner. Mr. Vivek Sethi, Advocate for respondents. --- ADARSH KUMAR GOEL, J. 1. This order will dispose of CWP Nos.10004, 10010, 10029, 10038, 10040, 10068, 10080 and 10081 of 2010, as all the petitions involve common question. 2. In CWP No.10004 of 2010, prayer is for quashing of letter dated 22.3.2010, Annexure P-10 from the Assistant Commissioner of Income Tax, Jalandhar, respondent No.2, to the effect that refunds due to the petitioner out of excess payment of tax under the provisions of the Income Tax Act, 1961 (for short, “the Act”) were withheld and adjusted against dues of M/s Hind Samachar Ltd. CWP No.10004 of 2010 3. Case of the petitioner is that she is a partner of M/s Lakshmi Enterprises, which firm was dissolved w.e.f. 1.1.2005. She was individually an assessee and as a result of appellate orders in assessment proceedings which have become final, refund of tax became due to the petitioner, but instead of the same being made over to her, was adjusted under Section 245 of the Act as above. Neither the procedure laid down under the said provision i.e. giving of intimation before passing of order was followed nor withholding of refund was justified to adjust dues of M/s Hind Samachar Ltd. 4. In reply to the notice, stand taken is that M/s Lakshmi Enterprises was a sister concern of M/s Hind Samachar Ltd. as the partners of the said firm were controlling and managing Group-B of M/s Hind Samachar Ltd. and therefore, the refund was withheld for adjustment of liability against M/s Hind Samachar Ltd. Reference has also been made to letter dated 24.2.2009 from one of the partners of M/s Lakshmi Enterprises, to the effect that refunds due to the said firm may be adjusted against dues of M/s Hind Samachar Ltd. 5. We have heard learned counsel for the parties. 6. Question for consideration is whether withholding of refund amount due to the petitioner for adjustment against dues of M/s Hind Samachar Ltd. was sustainable in law? 7. A perusal of letter dated 24.9.2010, Annexure R-1, relied upon as authority for adjustment of refund shows that the 2 CWP No.10004 of 2010 same has been written on behalf of M/s Lakshmi Enterprises and does not express any consent for adjustment of refunds due individually to the petitioner. M/s Lakshmi Enterprises is a separate assessee. It has also not been shown that procedure under Section 245 of the Act has been followed by sending intimation to the petitioner. 8. In view of above, in absence of any consent of the petitioner and any lawful authority with the respondents to proceed against the amount refundable to the petitioner for recovery of dues of M/s Hind Samachar Ltd., the impugned letter dated 22.3.2010, Annexure P-10, cannot be sustained. The same is set aside. 9. The respondents will be at liberty to pass a fresh order in accordance with law. Claim of the petitioner for refund be finalised within four weeks from the date of receipt of a copy of this order. 10. The petitions are disposed of. 11. A photocopy of this order be placed on the files of each connected case. (ADARSH KUMAR GOEL) JUDGE September 15, 2010 ( AJAY KUMAR MITTAL ) ashwani JUDGE 3 "