TaxTMI 
TaxTMI 
2026 (2) TMI 773
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....taken on record and marked 'X' for identification. The amendment sought is to bring on record the interim order passed by the Tribunal by way of an order sheet, and a report submitted by the Respondents in response to the interim order, which was inadvertently left to be annexed to the Petition. Ms. Iyer, learned counsel appearing on behalf of the Respondents, has no objection to the amendments being allowed. Hence, amendment is allowed. To be carried out forthwith. Reverification is dispensed with. 3. By this Petition, the Petitioner has challenged- (i) the action of the Respondents in adjusting the refund due to the Petitioner for the Assessment Year 2005-06 on February 17, 2025 in excess of the 20% of the demand for the Asses....
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....oncluded as under - "3. Having considered rival submissions, we are of the view that at this stage, the merits of the additions made cannot be gone into, which can only be examined at the time of hearing of the appeal. However, after considering the prima facie case, balance of convenience and other relevant factors, we are inclined to grant conditional stay, with a direction to the Assessing Officer to adjust 20% of the outstanding demand out of the refund due of Rs 43.36 crores, pertaining to A.Y. 2005- 06. Subject to the above, recovery of the balance outstanding demand shall be stayed for a period of 180 days from the date of this order or, till the disposal of the corresponding appeal fixed on 20.01.2025, whichever is earlier.....
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....g demand for the Assessment Year 2020-21. 11. On 25th July, 2025, when the stay application came up for hearing, the Tribunal, vide order sheet entry, passed an interim order directing the Departmental Representative appearing to obtain a report from Respondent No. 1 explaining as to under what circumstances the entire refund was adjusted against the current year's demand despite clear directions of the Tribunal to adjust only 20% of the demand for Assessment Year 2020-21 against the refund due for Assessment Year 2005-06. Respondent No. 1, vide his Report dated August 04, 2025, stated that pursuant to the directions of the Tribunal, he had written an email to the Centralised Processing Centre, Bengaluru (Respondent No. 4) stating that "....
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.... as on date. There is nothing on record to indicate any change in the factual or legal position so as to warrant a departure from the view earlier taken by the Tribunal. The considerations relating to prima facie case, balance of convenience, and avoidance of irreparable hardship therefore continue to operate in favour of the assessee. 8. As regards the grievance raised by the assessee concerning adjustment of refund beyond the extent permitted by the earlier stay order, we are conscious of the fact that the total demand involved is substantial and that a significant portion thereof has already been adjusted. However, at this stage, when the appeal is ripe for hearing, we are* of the considered view that issuance of a direction for....
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....,328/- against the demand for the Assessment Year 2020-21 in clear contravention of the Order of the Tribunal dated January 17, 2025. Mr. Mistri submitted that on February 17, 2025, the Order of the Tribunal was in operation, and therefore, the Respondents were required to comply with the same. Mr. Mistri further submitted that since the Tribunal had granted a stay on recovery of 80% of the demand for the Assessment Year 2020-21, any adjustment of refunds due in excess of Rs. 14,81,27,088/-, was in contravention of the Order of the Tribunal. 14. Considering the aforesaid facts, Mr. Mistri submitted that the Tribunal, in the impugned Order, grossly erred in not directing the Respondents to refund the amount of Rs. 28,55,26,240/- along wit....
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.... 43,36,53,328/- for Assessment Year 2005-06 should be adjusted only to the extent of 20% of the outstanding demand for Assessment Year 2020-21, and the balance demand, i.e. 80% of the demand for the Assessment Year 2020-21, is stayed for a period of 180 days or the disposal of the Appeal, whichever is earlier. Therefore, as per the Order of the Tribunal dated January 17, 2025, the demand for Assessment Year 2020-21 was recoverable only to the extent of Rs. 14,81,27,088/- from the refund due to the Petitioner for Assessment Year 2005-06, and the balance amount of Rs. 28,55,26,240/- was required to be refunded to the Petitioner. However, as can be seen from the challans produced in the Petition, the Respondents have adjusted the entire refund....