TaxTMI 
TaxTMI 
2022 (2) TMI 881
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....9 without disposing the objection to the intimation of proposal to make adjustment under Section 245 of the Act and without disposing the application of the petitioner under Section 220 (6) in connection with the demand arising out of the assessment order relating to assessment year 2015-16 during the pendency of appeal before the CIT (Appeals) against the said assessment. On perusal of relevant record and considering the facts of this case I am of the view that the following two legal questions arise in this writ petition : (i) Whether impugned action of the assessing officer under Section 245 of the Income Tax Act, 1961 making adjustment of the demand for the assessment year 2015-16 with the refund for the assessment year 2008....
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.... filed an application under Section 220 (6) of the Act on 29th January, 2018 before the Respondent assessing officer concerned for not treating the assessee/petitioner as assessee in default relating to demand in question arising out of the assessment order passed relating to assessment year 2015-16. It appears from record that the respondent no. 1 issued an intimation on 12th March, 2018 under Section 245 of the Act proposing to adjust the demand relating to assessment year 2015-16 from the refund of the assessment year 2008-09 and against such intimation petitioner had filed its objection before the respondent no. 1 and also filed the instant writ petition being aggrieved by the aforesaid impugned order of intimation. It appears from reco....
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.... "set off the amount to be refunded on or any part of that amount against the same, if any, remaining payable under this Act by the person to whom the refund is due." That this power is discretionary and not mandatory is indicated by the word "may". Secondly, the set off is in lieu of payment of refund. Thirdly, before invoking the power, the officer is expected to give an intimation in writing to the assessee to whom the refund is due informing him of the action proposed to be taken under this section. * * * * 28. As already noticed, this discretionary power has to be exercised after giving an opportunity to the assessee of being heard preceded by an intimation to the assessee in writing of the action proposed to be taken....
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....of a lump sum amount higher than 20% is warranted, then the Assessing Officer will have to give reasons to show that the case falls in para 4(B) of the office memorandum dated 29th February, 2016. 12. This Court finds that the order under Section 245 of the Act for adjustments of refunds as well as the order on stay of demand under Section 220(6) of the Act do not give any special/particular reason as to why any amount in excess of 20% of the outstanding demand should be recovered from the petitioner-assessee at this stage in accordance with paragraph 4(B) of the office memorandum dated 29th February, 2016. Consequently, this Court is of the view that the respondent is entitled to seek pre-deposit of only 20% of the disputed demand....
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....justments of refunds. Moreover, there is no order by the Assessing Officer giving any special/particular reason as to why any amount in excess of 20% of the outstanding demand should be recovered from the petitioner-assessee at this stage in accordance with paragraph (4B) of the office memorandum dated 29th February, 2016. 12. Consequently, this Court is of the view that the respondents are entitled to seek pre-deposit of only 20%^of the disputed demand during the pendency of the appeals in accordance with paragraph 4(A) of the office memorandum dated 29th February, 2016, as amended by the office memorandum dated 25th August, 2017." Mr. Dutta, learned advocate appearing for the respondents opposing this writ petition submits tha....
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....e application of the petitioner under Section 220(6) of the Act either rejecting or accepting the same before taking such coercive action under Section 245 of the Act and more so in adjusting the amount more than 20% of the demand in question by disregarding and ignoring the aforesaid office memorandum of CBDT which was binding upon him is bad in law. Considering the submissions of the parties and the judgments relied upon and the admitted facts which appear from record, this writ petition is disposed by allowing the same by holding that the impugned action of the assessing officer under Section 245 of the Income Tax Act, 1961 making adjustment of demand of assessment year 2015-16 in excess of 20 % from the refund of assessment year 2008-09....