TaxTMI 
TaxTMI 
2025 (8) TMI 846
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....7-18), during pendency of statutory appeal, against the refund dues flown with respect to Assessment Years 2021-22, 2022-23, 2023-24 and 2024-25, notwithstanding deposits made as directed by the Income Tax Officer, Ward 1(1), Cuttack vide Orders under Section 220(6) of the Income Tax Act, 1961, the writ petition is filed to invoke extraordinary jurisdiction under the provisions of Articles 226 and 227 of the Constitution of India, with the following prayer(s): "Under the aforesaid circumstances it is prayed therefore that this Hon'ble Court may be graciously pleased to: (A) Admit the Writ Application; (B) Issue rule nisi calling upon the opposite party No. 2 to refund Rs. 21,43,181/- realized/recovered from the petitioner over and above 20% of the assessed tax demand along with Interest; (C) If the opposite parties do not show or show insufficient cause to make the rule absolute; (D) Issue writ in the nature of mandamus or any other appropriate directing the opposite party No. 2 to refund Rs. 21,43,181/- along with Interest as may be directed by this Hon'ble Court in the end of justice; (E) To pass such order/orders, writ/writs ....
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....bove situations; 3. The undersigned has reserve the right to adjust refunds arising, if any against the demand to the extent of the amount required for granting stay and subject to the provisions of Section 245." 2.3. Due to certain financial constraints, the petitioner could deposit Rs. 16,91,930/- and filed another application under Section 220(6) on 31.08.2023 for stay realisation of rest of the demand, i.e. Rs. 1,18,46,296/-. Vide Order dated 06.09.2023, the ITO has directed as follows: "Considering the fact submitted by you and following the above stated CBDT OM stay of the recovery proceeding against the outstanding demand is granted subject to payment of 20% of the demand raised, i.e., 23,69,259/- (20% of Rs. 1,18,46,296/-) evidencing payment of challan to this office. In this context, you have paid the above stated outstanding tax demand of Rs. 16,91,930/- evidencing challans produced till date. Moreover, you are required to pay the balance amount of Rs.6,77,329/- by 06.11.2023 to avail full stay of the balance outstanding demand of Rs. 94,77,037/- till disposal of 1st appeal subject to the following conditions: 1. Require an undertaki....
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....ning to the Assessment Years 2021-22, 2022-23, 2023-24 and 2024-25 against the demand showing outstanding for the Assessment Year 2018-19, notwithstanding compliance of orders of conditional stay restraining the recovery of balance demanded tax, the instant writ petition has been filed. Hearing: 3. On the consent of the counsel for the respective parties, this matter is taken up for final hearing at the stage of "Fresh Admission" as short point is involved whether without affording opportunity of hearing and undertaking adjustment/set off the amounts of refunds for the Assessment Years 2021-22, 2022-23, 2023-24 and 2024-25 against the demand showing outstanding for the Assessment Year 2018-19, the ITO has acted within authority and such action can be held to be justified in law. 3.1. Heard Sri Jagabandhu Sahoo, learned Senior Advocate assisted by Ms. Kajal Sahoo, learned Advocate for the petitioner and Sri Subash Chandra Mohanty, learned Senior Standing Counsel assisted by Sri Avinash Kedia, learned Junior Standing Counsel, for the Income Tax Department. Submissions and arguments: 4. Sri Jagabandhu Sahoo, learned Senior Advocate submitted that in view of provisions o....
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....etitioner sought to pose that excess of 20% of demanded dues, during pendency of statutory appeal, has been directed to be deposited. Despite clear request in the above Letters for furnishing details of payments made, the petitioner has not done the needful. It is asserted that the fact of Order dated 06.09.2023 passed by the ITO in consideration of petition for stay dated 31.08.2023 (Annexure-7 to the instant writ petition) was never brought on record in the earlier writ petition, though the same was filed on 11.04.2025. However, being apprised that the ITO has passed an Order dated 21.04.2025 on the petition for stay of recovery of demand, this Court passed Order dated 21.04.2025 disposing of the said writ petition as rendered infructuous. 5.3. Refuting the contentions of the learned Senior Counsel it is stated that the records would reveal that since the petitioner could not comply with the first order of stay dated 19.05.2023, its second petition dated 31.08.2023 (Annexure-7) was considered by the ITO with a direction to deposit 20% of the demand raised pertaining to Assessment Year 2018-19 vide Order dated 06.09.2023. It is brought to fore that in the said Order it has been....
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....Authority is required to adhere to principles of natural justice before adjusting the refunds against outstanding demanded dues for an Assessment Year. 7.1. At this juncture it is apposite to have regard to Section 245 of the IT Act, which reads as follows: "245. Set off of refunds against tax remaining payable.- Where under any of the provisions of this Act, a refund is found to be due to any person, the Assessing Officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section." 7.2. Sri Jagabandhu Sahoo, learned Senior Advocate laid stress on the following averments made at paragraph 11 of the writ petition: "In the present case of the petitioner, no intimation has been issued to the petitioner before adjusting the amount of refund ....
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....sue a cheque on an account maintained by him with "a bank" and makes him liable for criminal prosecution if it is returned by "the bank" unpaid. The payment of the cheque is contemplated by "the bank" meaning thereby where the person issuing the cheque has an account. "The" is the word used before nouns, with a specifying or particularising effect as opposed to the indefinite or generalising force of "a" or "an". It determines what particular thing is meant; that is, what particular thing we are to assume to be meant. "The" is always mentioned to denote a particular thing or a person. "The" would, therefore, refer implicitly to a specified bank and not any bank. "The bank" referred to in clause (a) to the proviso to Section 138 of the Act would mean the drawee bank on which the cheque is drawn and not all banks where the cheque is presented for collection including the bank of the payee, in whose favour the cheque is issued." 7.8. As is apparent from bare reading of provision of Section 245 of the IT Act, it is unequivocal that once it is admitted that an intimation under said section has been received, it is incumbent on the part of the assessee to respond to the same, in absen....
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....to whether the ITO has issued intimation before taking measure to set off of amount of refunds for the Assessment Years 2021-22, 2022-23 and 2023-24 against outstanding dues relating to Assessment Year 2018-19. 8.1. It is strenuously argued by Sri Jagabandhu Sahoo, learned Senior Advocate assisted by Ms. Kajal Sahoo, learned Advocate that in view of legal position as made unambiguous in Skyline Engineering Contracts (India) Private Limited Vrs. Deputy Commissioner of Income Tax Circle-22(2), 2021 SCC OnLine Del 4133; Essjay Ericson Private Limited Vrs. Commissioner of Income Tax, 2021 SCC OnLine Del 5562 and Jindal Stainless Ltd. Vrs. Deputy Commissioner of Income Tax, 2023 SCC OnLine Del 5204, the excess amount over and above 20% as envisaged under Office Memorandum dated 29.02.2016 as amended by Office Memorandum dated 31.07.2017 issued by the Government of India, Ministry of Finance, Department of Revenue, Central Board of Direct Taxes, deserves consideration. 8.2. The Office Memorandum dated 29.02.2016 and the Office Memorandum dated 31.07.2017 issued by the Central Board of Direct Taxes are reproduced hereunder: "F.No.404/72/93-ITCC Government of India Ministry ....
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....on resulting in the disputed demand is such that payment of a lump sum amount lower than 15% is warranted (e.g. in a case where addition on the same issue has been deleted by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of the assessee, etc.), the assessing officer shall refer the matter to the administrative Pr. CIT/CIT, who after considering all relevant facts shall decide the quantum/proportion or demand to be paid by the assessee as lump sum payment for granting a stay of the balance demand. (C) In a case where stay of demand is granted by the assessing officer on payment of 15% of the disputed demand and the assessee is still aggrieved, he may approach the jurisdictional administrative, Pr. CIT/CIT for a review of the decision of the assessing officer. (D) The assessing officer shall dispose of a stay petition within 2 weeks of filing of the petition. If a reference has been made to Pr. CIT/CIT under para 4(B) above or a review petition has been filed by the assessee under para 4(C) above, the same shall also be disposed of by the Pr. CIT/CIT within 2 weeks of the assessing officer makin....
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....gh several measures resulting in fairer and more reasonable assessment orders, the standard rate of 15% of the disputed demand is found to be on the lower side. Accordingly, it has been decided that the standard rate prescribed in O.M. dated 29.2.2016 be revised to 20% of the disputed demand, where the demand is contested before CIT(A). Thus, all references to 15% of the disputed demand in the aforesaid O.M. dated 29.2.2016 hereby stand modified to 20% of the disputed demand. Other guidelines contained in the O.M. dated 29.2.2016 shall remain unchanged. These modifications may be immediately brought to the notice of all officers working in your jurisdiction for proper compliance. Sd/- (A.K. Sinha) Director (ITCC)" 8.3. In Skyline Engineering Contracts (India) Private Limited Vrs. Deputy Commissioner of Income Tax Circle-22(2), 2021 SCC OnLine Del 4133 it has been observed thus: "10. This Court is also of the view that the office memorandum dated 29.02.2016 read with office memorandum dated 25.08.2017 stipulate that the assessing officer shall normally grant stay of demand till disposal of the first appeal on payment of 20% of the disp....
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....r within six weeks. With the aforesaid directions, present writ petition and application stand disposed of." 8.5. It has been observed in Jindal Stainless Ltd. Vrs. Deputy Commissioner of Income Tax, 2023 SCC OnLine Del 5204 that, "14. No material has been furnished by the respondent/ revenue which would suggest that the petitioner/ assessee's case would fall within 4(B)(a)^1. 15. Given this position, the writ petition is disposed of with the direction to the respondents/revenue to release the amount, along with applicable interest, which is in excess of 20% of the disputed demand, concerning the aforementioned AYs. 16. We may also note (something we have recorded in our order dated 14.07.2023), according to the petitioner/assesse, the excess amount which is available with the respondents/revenue is Rs. 32,07,13,625/-. 17. The respondents/revenue will make their own calculation and ascertain whether the amount indicated by the petitioner/assessee is the excess amount. Thus, the excess amount beyond 20%, along with applicable interest, will be released to the petitioner within four (4) weeks of the receipt of a copy of the judgment." 8.6. It....