Supreme Court dismisses Income Tax Department appeal on refund claim under Section 245 waterfall mechanism The SC dismissed an appeal regarding a refund claim for assessment year 2019-2020 from the Income Tax Department. The refund was rejected on grounds that ...
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Supreme Court dismisses Income Tax Department appeal on refund claim under Section 245 waterfall mechanism
The SC dismissed an appeal regarding a refund claim for assessment year 2019-2020 from the Income Tax Department. The refund was rejected on grounds that directing the Income Tax Department to provide refunds was outside jurisdiction. NCLAT had previously held no illegality occurred in the adjudicating authority's order under Section 245 of the Income Tax Act, 1961, considering the waterfall mechanism per Section 53 of IBC. The SC found no grounds for interference and dismissed the appeal.
The Supreme Court, through Justices Abhay S. Oka and Ujjal Bhuyan, upheld the decision of the National Company Law Appellate Tribunal (NCLAT), holding that the appellant's prayer for a refund from the Income Tax Department "could not have been considered by the NCLAT." The Court noted that the appellant's remedy remains "kept open under the impugned judgment," and therefore, "no case is made out to interfere." The appeal was dismissed, with the Court emphasizing that neither the National Company Law Tribunal nor the NCLAT adjudicated on the refund claim.
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