| The Tax Publishers2019 TaxPub(DT) 6857 (Bom-HC) : (2019) 311 CTR 0407 INCOME TAX ACT, 1961
Section 245
On perusal of the letter issued by the assessee, it was found that what the assessee sought to convey was that if the amount was refunded, they had no objection for adjustment of refund against outstanding demand. But, that sentence did not convey that any time in future the amount could be adjusted without notice depriving the assessee of opportunity to point out changed circumstances if any. Therefore, as no prior notice was issued to the assessee before adjusting the refund, there was a breach of mandatory requirement under section 245.
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Refund - Adjustment under section 245 - Prior intimation not given to assessee -
Assessee-company received intimation under section 245 that called upon it to respond to the same within 30 days, otherwise the refund for the instant year would be adjusted against the outstanding demand. Before the assessee could respond to said intimation, on same day itself it received another communication from the AO-Dy. CIT intimating that out of the refund determined by him demand amount was being adjusted. Thus, assessee by filing instant writ petition sought for quashing of adjustment under section 245. Assessee contended that said adjustment was made by AO without prior intimation to it. Revenue contended that in the letter issued by the assessee almost one and a half years prior to adjustment of the refund itself, assessee had given permission to adjust the refund. Thus, the prior intimation was unnecessary. Assessee further contended that said letter could not be construed as a permission to adjust the refund in all circumstances. Held: On perusal of the letter issued by the assessee, it was found that what the assessee sought to convey was that if the amount was refunded, they had no objection for adjustment of refund against outstanding demand. But, that sentence did not convey that any time in future the amount could be adjusted without notice depriving the assessee of opportunity to point out changed circumstances if any. Therefore, since no prior notice was issued to the assessee before adjusting the refund, there was a breach of mandatory requirement under section 245. And, the letter issued by the assessee almost one and a half years prior to adjustment of the refund could not be made the basis of deviating from the mandate under section 245. Thus, the notice already issued by Dy. CIT under section 245 was set aside with liberty to the Dy. CIT to issue a fresh notice under section 245.
REFERRED : Hindustan Unilever Ltd. v. Dy. CIT & Ors. (2015) 377 ITR 281 (Bom) : 2015 TaxPub(DT) 3025 (Bom-HC),Glaxo Smithkline Asia (P.) Ltd. v. CIT & Ors. (2007) 290 ITR 351 (Del) : (2007) 60 Taxman 259 (Del) : 2007 TaxPub(DT) 900 (Del-HC),ANShaikh & Ors. v. Suresh B. Jain (1987) 165 ITR 86 (Bom) : (1986) 29 Taxman 191 (Bom) : 1987 TaxPub(DT) 543 (Bom-HC)
FAVOUR : In assessee's favour
A.Y. : 2016-17
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