Delhi High Court
Interactive Bpo Services Private ... vs Income Tax Officer, Ward 12 (1), ... on 1 December, 2021
$~35
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 13498/2021 & CM APPL. 42568/2021
INTERACTIVE BPO SERVICES
PRIVATE LIMITED ..... Petitioner
Through: Mr. Sumit K. Batra, Advocate with
Ms. Bandana Grover and Mr. Manish
Khurana, Advocates.
versus
INCOME TAX OFFICER,
WARD 12 (1), DELHI & ORS. ..... Respondents
Through: Mr. Shailendra Singh, Advocate.
% Date of Decision: 01st December, 2021
CORAM:
HON'BLE MR. JUSTICE MANMOHAN
HON'BLE MR. JUSTICE NAVIN CHAWLA
JUDGMENT
MANMOHAN, J: (Oral)
1. Present writ petition has been filed seeking refund of Rs.54,45,128/-
which was adjusted in excess of 20% of the total disputed tax demand for
the Assessment Year 2018-19 against the refunds due for the Assessments
Years 2019-20 and 2020-21. Petitioner also seeks directions to the
Respondents to hear and dispose of the appeal filed against the order dated
5th April, 2021 under Section 143(3) of the Income Tax Act, 1961 [for short
'the Act'] that is currently pending.
Signature Not Verified
Digitally Signed
Signing Date:02.12.2021
20:59:30
2. Learned counsel for the petitioner states that under Section 220(6) of
the Act, the Assessing Officer has been conferred with the power to grant
stay on recovery of outstanding tax demand subject to fulfilment of
appropriate conditions. He states that in order to provide guidance and lay
down principles regarding stay of demand, the Central Board of Direct
Taxes has issued various Circulars/ Notification from time to time including
Office Memorandums dated 29th February, 2016 and 31st July, 2017,
prescribing that in cases where an assessee challenges the additions/
disallowances made in the assessment order by way of an appeal before the
first appellate authority, i.e., CIT(A), and during pendency thereof deposits
20% of the total disputed outstanding tax demand, the assessing officer is
empowered to grant stay of recovery of the balance outstanding demand.
3. Learned counsel for the petitioner submits that upon
payment/recovery of the standard rate of 20% of the disputed outstanding
tax demand, the assessing officer is mandated to grant stay on recovery of
the balance disputed outstanding tax demand till disposal of first appeal of
the assessee, unless the case of the assessee falls in the category mentioned
in paragraph (B) of the Office Memorandums dated 29th February, 2016 and
31st July, 2017. He states that the Respondents in violation of the provisions
of the Office Memorandums recovered the disputed outstanding tax demand
in excess of 20% by way of adjustment of refunds due for subsequent
assessment years.
4. He states that while 20% of the disputed amount for the Assessment
Year 2018-19 was Rs.29,23,631/- (20% of Rs.1,46,18,159/-), the respondent
adjusted Rs.83,68,759/- being 57% of the demand and that too without
deciding petitioner's application for stay.
Signature Not Verified
Digitally Signed
Signing Date:02.12.2021
20:59:30
5. Issue notice.
6. Mr. Shailendra Singh, learned counsel accepts notice on behalf of the
respondents. He states that the demand has been made by the Centralized
Processing Centre in routine and not by the Assessing Officer.
7. Having heard learned counsel for the parties, this Court is of the view
that the issue raised in the present writ petition is no longer res integra. This
Court in Eko India Financial Services Pvt. Ltd. vs. Assistant
Commissioner of Income Tax Circle 7(1), W.P.(C) 5819/2021 has in
similar facts held as under:-
"9. Having heard learned counsel for the parties, this Court is
of the view that the Government is bound to follow the rules
and standards they themselves had set on pain of their action
being invalidated. [See: Amarjit Singh Ahluwalia vs. State of
Punjab & Ors. 1975 (3) SCR 82 and Ramana Dayaram
Shetty vs. International Airport Authority of India & Ors.
1979 SCR (3) 1014].
10. This Court is also of the view that the office memorandum
dated 29th February, 2016 read with office memorandum
dated 25th August, 2017 stipulate that the Assessing Officer
shall normally grant stay of demand till disposal of the first
appeal on payment of 20% of the disputed demand. In the
event, the Assessing Officer is of the view that the payment 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.
11. 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
Signature Not Verified
Digitally Signed
Signing Date:02.12.2021
20:59:30
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 during the pendency of the appeal in accordance with
paragraph 4(A) of the office memorandum dated 29th
February, 2016, as amended by the office memorandum dated
25th August, 2017.
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.
13. Accordingly, the respondent no.1 is directed to refund the
amount adjusted in excess of 20% of the disputed demand for
the Assessment Year 2017-18, within four weeks....."
8. Keeping in view the aforesaid mandate of law as well as the fact that
refunds have been adjusted against outstanding tax demand by the Authority
without invoking Section 245 of the Act and/or without following the due
procedure prescribed under the said Section inasmuch as no notice or
opportunity of pre-decisional hearing had been provided to the petitioner
prior to such adjustment of refund, this Court is of the opinion that the
petitioner is entitled to refund of adjustments made in excess of 20% of the
disputed tax demands.
9. Consequently, this Court directs the respondents to verify the facts
stated in the writ petition and if it finds them to be true and correct then
refund the amount adjusted in excess of 20% of the disputed tax demands
for the Assessment Year 2018-19 to the petitioner within four weeks.
Signature Not Verified
Digitally Signed
Signing Date:02.12.2021
20:59:30
10. With the aforesaid direction, present writ petition and application
stand disposed of.
MANMOHAN, J
NAVIN CHAWLA, J
DECEMBER 1, 2021
js
Signature Not Verified
Digitally Signed
Signing Date:02.12.2021
20:59:30
