2026 (1) TMI 831

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.... of Respondent No.1 of adjusting the refund of Rs. 3,39,94,725/- for A.Y. 2023-24 against the Demand Order dated 28th March 2024 passed in relation to A.Y. 2022-23. There is also a prayer for directing the Respondents to issue a consequential refund of Rs. 2,36,48,429/- to the Petitioner along with interest, from the date of refund due, upto the date of receipt of the payment. 3. The main grievance of the Petitioner is that for A.Y. 2022-23, an Assessment Order was passed under Section 143(3) determining the tax liability of the Petitioner in the amount of Rs. 5,17,31,483/-. This Assessment Order has been challenged in Appeal before the CIT (Appeals). Whilst the Appeal was pending, the entire refund due to the Petitioner for A.Y. 2023-24....

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....ith the alternative prayer, namely, the refund of Rs. 2.36 Crores to the Petitioner. As far as this prayer is concerned, we find considerable force in the argument canvassed on behalf of the Petitioner. It is not in dispute that the demand raised for A.Y. 2022-23 is challenged in Appeal before the CIT (Appeals). That Appeal is pending. In fact, the Petitioner made an Application for stay before the Income Tax Officer, Ward-16 in which it was also pointed out that the entire refund of Rs. 3.39 Crores for A.Y. 2023-24 has been adjusted against the outstanding demand for A.Y. 2022-23, and that after adjusting 20% of the outstanding demand [for A.Y. 2022-23], the balance ought to be refunded to the Petitioner. Since, the entire refund has been ....

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....e granting a stay of the disputed demand. These Office Memorandums can be found at pages 107 and 109 of the paper book. 9. In the facts of the present case, there is no reference made to the Principal Commissioner of Income Tax/Commissioner of Income for requiring a higher amount of payment from the Petitioner/Assessee as stipulated in the aforesaid Office Memorandums. This is an undisputed fact. Once this is the case, we are clearly of the view, that at the highest, what could have been adjusted from the refund of A.Y. 2023-24 was only 20% of the outstanding demand for A.Y. 2022-23. As mentioned earlier, the outstanding demand for A.Y. 2022-23 was Rs. 5,17,31,483/-. 20% of this amount would come to Rs. 1,03,46,296/-. Only this amount co....