Syngene International Limited V. The Deputy Commissioner of Income Tax Circle-6(1)(1) and The Principal Commissioner of Income Tax-1 and Centralized Processing Center and Director General of Income Tax (Systems)

WP/28333/2024

AI Insights

The case involves Syngene International Limited, which filed a writ petition against various income tax authorities seeking a refund of amounts that were adjusted against the petitioner’s tax demands, despite the petitioner having deposited 20% of the disputed tax and having pending appeals. The petitioner argued that the adjustments made by the tax authorities were in violation of the legal provisions that allow for a stay of demand upon a 20% deposit during the appeal process. The court referenced a similar case, M/S. Price Waterhouse, Bangalore vs. National Faceless Appeal Centre, Delhi, to support its decision.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 823909 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 17-12-2025
• Assessment Year: misc
• Other Referred Cases: M/S. Price Waterhouse, Bangalore vs. National Faceless appeal centre, Delhi and others in W.P.No.23784/2024, Pan Synthetics Private Limited and Centralized Processing Centre and others W.P.No.9835/2024 dated 23.07.2024
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: M DILIP
• Assessee Lawyers: T
• Keywords: Appeal; Assessment Year; Disputed tax; Income Tax Refund; Stay Application
• Section: 143(3); 220

Judgement Text

" - 1 - HC-KAR NC: 2025:KHC:53933 WP No. 28333 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 17TH DAY OF DECEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR WRIT PETITION NO. 28333 OF 2024 (T-IT) BETWEEN: SYNGENE INTERNATIONAL LIMITED A COMPANY REGISTERED UNDER THE COMPANIES ACT, 1956 HAVING OFFICE AT, BIOCON PARK, SEZ, BOMMASANDRA INDUSTRIAL AREA, PHASE-IV, BOMMASANDRA BANGALORE - 560 099. REPRESENTED BY HEREIN BY ITS ASSOCIATE VICE PRESIDENT FINANCE AND ACCOUNTS MR. MANOJ GUPTA …PETITIONER (BY SRI. T. SURYANARAYANA, SR. COUNSEL FOR SMT. TANMAYEE RAJKUMAR, ADVOCATE) AND: 1. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-6(1)(1), 2ND FLOOR, BMTC BUILDING 6TH BLOCK, 80 FEET ROAD, KORAMANGALA BANGALORE - 560 095. 2. THE PRINCIPAL COMMISSIONER OF INCOME TAX-1, BMTC BUILDING 6TH BLOCK, 80 FEET ROAD KORAMANGALA, BANGALORE - 560 095. 3. CENTRALIZED PROCESSING CENTER REPRESENTED HEREIN BY THE Printed from counselvise.com Digitally signed by AASEEFA PARVEEN Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:53933 WP No. 28333 of 2024 ASSITANT DIRECTOR OF INCOME TAX, CPC POST BAG NO.1, ELECTRONIC CITY BENGALURU - 560 500. 4. DIRECTOR GENERAL OF INCOME TAX (SYSTEMS) ARA CENTER, GROUDN FLOOR, E-2, JHANDEWALAN EXTESNION, NEW DELHI - 110055. …RESPONDENTS (BY SRI. M. DILIP, ADVOCATE) THIS W.P. IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION OF INDIA, PRAYING TO DIRECT THE RESPONDENTS TO FORTHWITH REFUND AN AMOUNT OF RS. 17,78,24,964/- DETERMINED VIDE ORDER DATED 27.07.2023 BEARING DIN NO.ITBA/AST/M/143(3)/2023-24/1054710203(1) FOR ASSESSMENT YEAR 2010-11 (ANNEXURE- A), ALONG WITH APPLICABLE INTEREST UNTIL PAYMENT OF THE REFUND AND ETC. 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 Heard learned Senior Counsel for the petitioner and learned counsel for the respondents and perused the material on record. 2. A perusal of the material on record will indicate that pursuant to the refund request made by the petitioner for the assessment years granted/sanction refund in Printed from counselvise.com - 3 - HC-KAR NC: 2025:KHC:53933 WP No. 28333 of 2024 favour of the petitioner for the assessment year 2010- 2011, 2011-2012 and 2012-2013. Subsequently, insofar as assessment years 2014-2015 and 2016-2017 are concerned, the respondents who passed assessment orders against the petitioner raising demands which were challenged by the petitioner before the appellate authority by depositing 20% of the disputed tax pursuant to the assessment order. 3. It is the grievance of the petitioner that though the petitioner had deposited 20% of the disputed tax at the time of filing the appeal before the appellate authority and the said appeal is pending adjudication as on today, the respondents have proceeded to adjust the refund payable in favour of the petitioner without taking into account the 20% deposit already made by the petitioner and declined to grant refund in favour of the petitioner who is before this Court by way of the present petition. He has placed reliance upon the judgment of this Court in M/S. Price Waterhouse, Bangalore vs. National Printed from counselvise.com - 4 - HC-KAR NC: 2025:KHC:53933 WP No. 28333 of 2024 Faceless appeal centre, Delhi and others in W.P.No.23784/2024. 4. Per contra learned counsel for the respondents submits that there is no merit in the petition and the same is liable to be dismissed. 5. A perusal of the material on record will indicate that subsequent to sanctioning/granting refund in favour of the petitioner for the assessment years 2010-2011, 2011-2012 and 2012-2013, the petitioner has also deposited 20% of the disputed tax amount at the time of filing an appeal which are pending before the appellate authority. For the assessment years 2014-2015 and 2016- 2017, under identical circumstances in M/s.Price Waterhouse, Bangalore case supra, this Court held as under: In this petition, the petitioner seeks the following relief's: “(i) Directing the 3rd Respondent to forthwith refund Rs.21,08,91,940/-, being demand recovered in excess of 20% of the demand raised for the assessment year 2012- 13, along with applicable interest; Printed from counselvise.com - 5 - HC-KAR NC: 2025:KHC:53933 WP No. 28333 of 2024 (ii) Directing the 1st / 2nd Respondent to dispose of the appeal pending before it for the assessment year 2012-13 in Appeal No.CIT(A), Bengaluru-1/10224/2015-16 (old appeal No.9/10002/2017-18 (Manual Appeal Register No.:40/BU/2015-16)) (Annexure0B dated 29.04.2015 in a time bound manner, expeditiously; (iii) Directing the Respondents not to enforce the balance demand raised vide demand notice dated 31.03.2015 (Annexure-A2) until disposal of the appeal by the 1st / 2nd Respondent and for a period of three weeks thereafter; 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 interests of justice and equity.” 2. Heard the learned Senior Counsel appearing for the petitioner and the learned counsel appearing for the respondents and perused the material available on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material available on record, the learned Senior Counsel for the petitioner submitted that aggrieved by the demand notice dated 31.03.2015 issued by respondent No.3 in relation to the assessment year 2012-13, the petitioner filed an appeal before respondent No.1 on 29.04.2015. In addition thereto, the petitioner filed stay applications before respondent No.3 seeking stay of the demand raised for the assessment year 2012-13 and the said applications were filed on 05.05.2015, 18.05.2015, 12.06.2015, 30.11.2016. On 05.10.2017, the petitioner filed written submissions and application for additional evidence and the proceedings before respondent No.1 are still pending adjudication. It is submitted that though the petitioner would be liable to pay only 20% by way of pre-deposit for the purpose of stay before the Appellate Authority in terms of the Circular dated 31.07.2017 and the petitioner would be entitled to refund of all the amounts payable to him in excess of the aforesaid 20%, the respondents have proceeded to adjust the amounts in excess of 20%, which is the maximum of amount of pre-deposit to be made by the petitioner, who is before this Court seeking direction for refund of the amounts adjusted in excess of 20% and for direction to the Appellate Authority to dispose of the appeals as expeditiously as possible. 4. In support of his submissions, the learned Senior Counsel appearing for the petitioner placed reliance on the judgment of this Court in the case of Pan Synthetics Private Limited and Centralized Printed from counselvise.com - 6 - HC-KAR NC: 2025:KHC:53933 WP No. 28333 of 2024 Processing Centre and others –W.P.No.9835/2024 dated 23.07.2024 as well as the Office Memorandum dated 31.07.2017 issued under Section 220 of the Income Tax Act, 1961. 5. Per contra, learned counsel appearing for the respondents submits that respondent No.1 would take up the appeals and dispose of the same as expeditiously as possible. 6. A perusal of the material available on record will indicate that it is an undisputed fact that the petitioner filed an appeal on 29.04.2015 and multiple stay applications were also filed by him between 05.05.2015 and 30.11.2016 and the petitioner is making earnest efforts to get the appeals as well as the stay applications disposed of. In this context, perusal of the Circular/Office Memorandum dated 31.07.2017 will indicate that in the event, the petitioner deposits 20% by way of pre-deposit, there shall be stay of demand till disposal of the appeal by the Appellate Authority. However, in the instant case, despite the petitioner having filed the appeal as long back as in the year 2015 and multiple stay applications between 2015 to 2016, the Assessing Officer has neither passed any orders on the stay applications nor as the Appellate Authority disposed of the appeals. On the other hand, the respondents have proceeded to adjust the refunds payable to the petitioner in excess of maximum 20%, which is clearly impermissible in law, particularly, having regard to the office memorandum dated 31.07.2017 and the judgment of this Court in W.P.No.9835/2024 dated 23.07.2024 referred supra wherein it is held as under: ORAL ORDER The petitioner has sought for directions to the respondents to refund an amount of Rs.1,99,98,090/- being the demand raised for the assessment year 2015-16 and 2016-17 which is stated to have been adjusted as against the refund due for the assessment year 2023-24. 2. It is the case of the petitioner that for the assessment year 2016-17, the third respondent has passed an assessment order and raised a demand on 26.05.2023, and for the assessment year 2015-16, the third respondent has passed an assessment order and raised the demand on 30.05.2023. 3. Aggrieved by such orders, appeals were filed before the Commissioner of Income Tax and the petitioner had filed an application seeking for stay of the demand Printed from counselvise.com - 7 - HC-KAR NC: 2025:KHC:53933 WP No. 28333 of 2024 for the assessment year 2015-16 as per Annexure-M and similar application was filed seeking stay of demand for the Assessment Year 2016-17 at Annexure-N. Petitioner submits that in terms of Annexure-P as against outstanding demand noticing that refund was granted upon processing the return for the assessment year 2023-24 and determination of refund of Rs.1,99,98,090/-, the said refund was adjusted for the demand as regards the assessment year 2015-16 and 2016-17. 4. It is the contention of the petitioner that the entirety of refund was adjusted and in light of their application for stay, if the demand for 2015-16 and 2016-17 is stayed, the question of adjustment of entirety of refund would not arise. 5. It is noticed that the assessment order for the year 2015-16 was passed on 16.02.2024 and for the year 2016-17 was passed on 26.05.2023. 6. It is not in dispute that the application for stay was filed on 11.01.2024 as regards assessment year 2015- 16 and on the same date i.e., on 11.01.2024 application for stay was filed as regards the assessment year 2016-17. As on the date of filing of the application for stay, the petitioner had the benefit of order of refund for the year 2023-24. If as on the date of filing the application for stay dated 11.01.2024, if the petitioner had made payment of 20% remaining 80% would have been stayed. 7. In light of adjustment at Annexure-P, only manner of moulding the relief would be adjustment of refund to an extent of 20% of the demand for the year 2015- 16 and 2016-17. Once adjusted, the remaining amount of 80% of refund adjusted towards demand requires to be reversed by crediting the same to the petitioner. Accordingly, the third respondent is directed to refund the amount of 80% of the demand for the assessment year 2015-16 and 2016-17 as already been adjusted. Such refund to be made within a period of eight weeks from today. 8. Accordingly the petition is disposed off. 7. In view of the aforesaid facts and circumstances, I am of the considered opinion that the respondents were clearly not justified in adjusting the refund amounts payable to the petitioner in excess of 20% and consequently, necessary directions have to be issued to the respondents to refund the entire amounts payable to the petitioner in excess of 20% of the demand for the assessment year 2012-13 within a stipulated time frame Printed from counselvise.com - 8 - HC-KAR NC: 2025:KHC:53933 WP No. 28333 of 2024 and by directing respondent No.1 to dispose of the appeals within a stipulated time frame. 8. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The concerned respondents are directed to refund the entire amount in excess of 20% of the demand raised for the assessment year 2012-13 together with the applicable interest back to the petitioner after due verification within a period of six weeks from the date of receipt of a copy of this order. (iii) The concerned respondent / Appellate Authority is directed to dispose of the appeal within a period of three months from the date of receipt of a copy of this order. (iv) Respondents are directed not to enforce the balance demand raised by any demand notice at Annexure-A2 dated 31.03.2015 till the expiry of period of three weeks after disposal of the appeal by the Appellate Authority. 6. It is an undisputed fact as borne out from the material on record that along with the appeal the petitioner has filed an application for stay for the assessment year 2014-2015 and there is an order of stay for the assessment year 2016-2017 and the petitioner having deposited 20% of the disputed tax amount, in the light of the judgment of this Court in M/s.Price Waterhouse, Bangalore stated supra, I deem it just and appropriate to direct the respondents to refund the sums Printed from counselvise.com - 9 - HC-KAR NC: 2025:KHC:53933 WP No. 28333 of 2024 as sought for by the petitioner together with applicable interest within a stipulated time frame. 7. In the result the following: ORDER (i) The petition is allowed. (ii) Respondents are directed to refund sums of Rs.17,78,24,964/- vide order dated 27.07.2023 for the assessment year 2010-2011 (Annexure-A), Rs.25,19,15,558/- vide order dated 24.08.2023 for the assessment year 2011-2012 (Annexure-B) and Rs.5,93,43,492/- vide order dated 26.06.2024 for the assessment year 2012-2013 (Annexure-W) along with applicable interest subject to verification by the respondents within a period of 6 weeks from the date of receipt of copy of this order. Sd/- (S.R.KRISHNA KUMAR) JUDGE NS CT:TSM, List No.: 2 Sl No.: 55 Printed from counselvise.com "