Gujarat High Court
M/S Neo Structo Construction Private ... vs Assistant Commissioner Of Income Tax ... on 10 January, 2023
Author: Sonia Gokani
Bench: Sonia Gokani
NEUTRAL CITATION
C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023
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IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
R/SPECIAL CIVIL APPLICATION NO. 3697 of 2022
FOR APPROVAL AND SIGNATURE:
HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
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1 Whether Reporters of Local Papers may be allowed NO
to see the judgment ?
2 To be referred to the Reporter or not ? NO
3 Whether their Lordships wish to see the fair copy NO
of the judgment ?
4 Whether this case involves a substantial question NO
of law as to the interpretation of the Constitution
of India or any order made thereunder ?
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M/S NEO STRUCTO CONSTRUCTION PRIVATE LIMITED
Versus
ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE 3(1)(1)
AHMEDABAD
==========================================================
Appearance:
MR DHINAL A SHAH(12077) for the Petitioner(s) No. 1
MRS KALPANA K RAVAL(1046) ASSISTED BY MR KARAN SHANGHANIfor
the Respondent(s) No. 1
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CORAM:HONOURABLE MS. JUSTICE SONIA GOKANI
and
HONOURABLE MR. JUSTICE SANDEEP N. BHATT
Date : 10/01/2023
ORAL JUDGMENT
(PER : HONOURABLE MS. JUSTICE SONIA GOKANI) Page 1 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined
1. The petitioner is the company registered within the territory of India. The petitioner seeks the direction upon the respondent to issue the refund along with the applicable interest in the following factual background:
1.1 The petitioner filed return of income electronically on 15.03.2013 declaring the total income at Rs.43,01,51,910/- for the assessment year 2012-2013.
1.2 His case was selected for scrutiny under Section 143 of the Income Tax Act, 1961 ('the IT Act' hereinafter) and the notices were served by the Jurisdictional Assessing Officer, Surat. The Assessment Order came to be passed on 31.03.2015 determining the total income of the Page 2 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined petitioner at Rs.87,35,93,335/- raising the demand of Rs.20,53,38,770/-.
1.3 The petitioner preferred an appeal before the Commissioner of Income Tax (Appeals) on 31.03.2015 in prescribed Form 35 on 30.04.2015. We are given to understand that certain details called for have been tendered and the matter is still pending for final adjudication.
1.4 It is the grievance on the part of the petitioner that against the tax demand, which includes the interest raised by the respondent and the amount of Rs.30,43,48,695/- have been adjusted by the respondent against the refunds receivable for various years, which constitutes 65.43% of the total demand raised. Following Page 3 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined tabular details of the refund and adjustment made would be necessary to be reproduced:
Assessment Refund Date of
Year Adjusted (Rs.) Adjustment
2013-14 3,71,07,990/- 04/01/2017
2014-15 4,61,39,761/- 17/03/2017
2019-20 80,40,871/- 20/03/2020
2020-21 4,30,60,073/- 11/11/2021
1.5 The petitioner filed an application
with the respondent as well as the
Commissioner of Income Tax requesting to release the refund of INR 9.32 Crore (rounded of) i.e. the amount adjusted beyond 20% of the demand raised by the respondent in accordance with the Office Memorandum issued by the Central Board of Direct Taxes ('the CBDT' hereinafter) dated 31.07.2017 which prescribes the payment of 20% of the disputed amount if the demand is Page 4 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined contested before the Commissioner of Income Tax(Appeals). The respondent summarily rejected the application filed by the petitioner on 11.01.2022.
1.6 Aggrieved by the action of the respondent for the adjustment of the refund and with no other alternative remedy left, the petitioner is before this Court seeking to challenge the said action under Article 226 of the Constitution of India.
1.7 Reliance is placed on the Instruction No.1914 dated 02.02.1993 issued by the CBDT which provides the guidelines granting the stay of demand by the Assessing Officer and procedure to be followed for recovery of the demand.Page 5 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023
NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined 1.8 It is further averred that the authority since insists on payment of the high proportion of the disputed demand for grant of stay of the demand, the revised guidelines were issued vide Office Memorandum dated 29.02.2016 in partial modification of the Instruction No.1914. It provides for the grant of stay of demand till the disposal of the First Appeal on payment of 15% of the disputed demand unless, of course, the case falls in the category. Relevant portion of the Office Memorandum dated 29.02.2016 is as follow:
"(A) In a case where the outstanding demand is disputed before CIT (A), the assessing officer shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand, unless the case falls in the category discussed in para (B) hereunder.
(B) In a situation where, Page 6 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined
(a) the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount higher than 15% is warranted (e.g. in a case where addition on the same issue has been confirmed by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of Revenue or addition is based on credible evidence collected in a search or survey operation, etc.) or,
(b) the assessing officer is of the view that the nature of addition 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 of demand to be paid by the assessee as hump 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 Page 7 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined 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 () above, the same shall also be disposed of by the Pr. CIT/CIT within
2 weeks of the assessing office making such reference or the assessee filing such review, as the case may be." 1.9 The petitioner, therefore, is before this Court by a specific grievance that the adjustment, which has been made against the refund to be granted as high as 65% of the demand raised, which is more than 20% prescribed by the said instructions dated 31.07.2017, Sub-section (1) of Section 119 of the IT Act provides that the Board may, from time to time, issue such orders, instructions and directions to other income-tax authorities as it may deem fit Page 8 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined for the proper administration of this Act, and all such authorities and all other persons employed in execution of this Act shall observe and follow such orders relying on some of the decisions of the Apex Court with the following prayers:
"9...
(A) YOUR LORDSHIPS may be pleased to allow the present petition;
(B) YOUR LORDSHIPS may be pleased to issue a writ of certiorari or a writ in the nature of Mandamus or any other appropriate Writ, Order or Direction to Quash and Set Aside the Order dated 11/01/2022 as passed by the Respondent refunsing to refund the excess amount of INR 9,32,80,941/-
(INR Nine Crore Thirty Two Lakh Eighty Thousand Nine Hundred Forty One) i.e. amount adjusted beyond 20% of the demand raised by the Respondent for A.Y.2012-13; (C) YOUR LORDSHIPS may be pleased to issue a Writ of Certiorari or a Writ in the nature of Mandamus or any other appropriate Writ, Order or Direction upon Respondent to refund INR 9,32,80,941/- (INR Nine Crore Thirty Two Lakh Eighty Thousand Nine Hundred Forty One),along with 9% Page 9 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined interest thereon from the date of adjustment of refund till the date of granting of refund;
(D) YOUR LORDSHIPS may be pleased to direct expeditious disposal of proceedings pending before Commissioner of Income Tax (Appeals);
(E) YOUR LORDSHIPS may be pleased to pass any such other orders and further orders as may deem fit in the interest of justice."
2. On issuance of notice by this Court on 21.02.2022 [Justice J.B.Pardiwala (as His Lordship then was) and Justice Nisha M. Thakore), the respondent had appeared and filed the affidavit-in-reply which is by Mr.Vishwas Shukla, Deputy Commissioner of Income-tax Circle 3(1)(1), Ahmedabad, where he has denied all averments, allegations and contentions raised by the petitioner. The allegations of the demand of assessment of assessment year 2012-13 is an excess of Page 10 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined 20% of the demand, which has been adjusted according to the respondent, is thoroughly misconceived.
2.1 The total demand is Rs.20.53 Crore raised for the assessment year 2012-13, whereas in respect of the refunds raising for assessment years 2013-14, 2014-15, 2019-20 and 2020-21, an amount of Rs.14,43,48,695/- has been adjusted. 2.2 The petitioner has placed reliance on Office Memorandum dated 29.02.2016 and 31.07.2017. This Office Memorandum would go to show that they are not applicable in case of the petitioner. It prescribes that upon a stay application being filed, the stated procedure is required to be followed. In the instant case, no stay Page 11 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined application has been filed before the Assessing Officer or before the Jurisdictional Commissioner. Therefore, they would not have any applicability. 2.3 Furthermore, as per Clause (2) of the Memorandum dated 29.02.2016, a demand would be stayed only if there are valid reasons for doing so and the mere filing of the appeal against the Assessment Order will not be sufficient reason to stay the recovery of demand. The Assessing Officer is required to undertake the procedure only upon an application being made and as a pre-condition for stay ordinarily 20% of the demand is required to be paid. It is also open for the Assessing Officer to ask for the amount higher then the 20% if so Page 12 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined warranted. The assessee since has not made any application for the stay, the refund due for the subsequent years have been adjusted through the system itself. There is no overt act on the part of the Assessing Officer and this is a system generated adjustment.
3. Affidavit-in-rejoinder is filed by the petitioner contending inter alia that the application for stay dated 28.04.2015 has already been preferred by the petitioner, wherein the petitioner expressly requested the predecessor of the respondent to keep the demand in abeyance till the time the Appeal is decided for the assessment year 2012-13. Not reverted to this request, the reference is also made of communication Page 13 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined dated 15.06.2015 requesting the predecessor to rectify the patent error and also revised the demand.
3.1 The petitioner has further contended that as available on the Income-tax website on record, the stay application is already pending and income tax to the tune of Rs.8,32,47,750/- has been adjusted against the tax demand. And hence, the say of the respondent that no such application for stay is preferred as holds no ground.
4. We have extensively heard the learned advocate, Mr.Dhinal Shah appearing for the petitioner and learned senior standing counsel, Mrs.Raval assisted by the learned advocate, Mr.Karan Sanghani. It would be apt to refer to at the out set the request Page 14 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined made by the petitioner by an application dated 28.04.2015 which is addressed to the Assistant Commissioner, Income-tax, Surat giving a reference to the Assessment Order dated 31.03.2015 passed under Section 143(3) of the IT Act raising the demand of Rs.20,53,38,770/-. It also further states that since the petitioner is in the process of filing the appeal before the Commissioner of Income-tax (Appeals)-(1), Surat and they expect to succeed in the appeal therefore, the demand raised be kept in abeyance til the appeal is finally disposed of. This has been inverted on 30.04.2015 and therefore, such a request appear to have been made on 30.04.2015 and not on 28.04.2015. This would have a significant in wake of the contentions Page 15 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined raised by the respondent that the request for limiting the amount to the tune of 20% during the pendency of the appeal would be only on a specific request in that regard having been made by the party.
4.1 It is reiteratively contended in the affidavit-in-reply that no such application had been moved, which would require any indulgence on the part of the respondent authority. With regard to the said application also it has been argued before us by the learned senior standing counsel that the application is of 28.04.2015 when readiness was shown for filing the appeal, however, no appeal was filed till that date and hence, such an application cannot be treated as an application under the Page 16 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined circulars which requires specific application pending the appeal.
5. We are in complete disagreement with such submissions as we could notice from that very application that the inward stamp is of 30.04.2015 and the appeal also is pending from 30.04.2015. Assuming that such an application was preferred on 28.04.2015 the fact remains that within two days the appeal has been preferred i.e. on 30.04.2015 and the authority which is required to apply its mind and either accede to the request or reject the same shall need to take a holistic view and this application which was preferred on the very day of 30.04.2015 could not have been overlooked.
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6. Apt would to summarize of the adjustment made by the respondent as mentioned a para 1.4 above.
7. In all the amount of Rs.13,43,48,695/- has been adjusted by the respondent against the refunds receivable for various years. It constitutes 65.43% of the total demand raised by the respondent for the assessment year 2012-13.
8. Relevant will be to refer to the Instruction No.1914.
8.1 The Office Memorandum dated 29.02.2016 issued under Section 220 of the IT Act under the heading of COLLECTION AND RECOVERY OF TAX WHEN TAX PAYABLE AND WHEN ASSESSEE DEEMED IN DEFAULT is as follow: Page 18 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023
NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined "OFFICE MEMORANDUM [F.NO.404/72/93-ITCC] DATED 29.02.2016 Instruction No. 1914 dated 21-3-1996 contains guidelines issued by the Board regarding procedure to be followed for recovery of outstanding demand, including procedure for grant of stay of demand.
2. In part 'C' of the Instruction, it has been prescribed that a demand will be stayed only if there are valid reasons for doing so and that mere filing of an appeal against the assessment order will not be a sufficient reason to stay the recovery of demand. It has been further prescribed that while granting stay, the field officers may require the assessee to offer a suitable security (bank guarantee, etc.) and/ or require the assessee to pay a reasonable amount in lump sum or in installments.
3. It has been reported that the field authorities often insist on payment of a very high proportion of the disputed demand before granting stay of the balance demand. This often results in hardship for the taxpayers seeking stay of demand.
4. In order to streamline the process of grant of stay and standardize the quantum of lump sum payment required to be made by the assessee as a pre-condition Page 19 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined for stay of demand disputed before CIT (A), the following modified guidelines are being issued in partial modification of Instruction No. 1914:
(A) In a case where the outstanding demand is disputed before CIT(A), the assessing officer shall grant stay of demand till disposal of first appeal on payment of 15% of the disputed demand, unless the case falls in the category discussed in para (B) hereunder.
(B) In a situation where.
(a) the assessing officer is of the view that the nature of addition resulting in the disputed is such that payment of a lump sum amount higher than 15% is warranted (e.g. in a case where addition on the same issue has been confirmed by appellate authorities in earlier years or the decision of the Supreme Court or jurisdictional High Court is in favour of Revenue or addition is based on credible evidence collected in a search or survey operation,etc.) Or,
(b) the assessing officer is of the view that the nature of addition resulting in the disputed demand is such that payment of a lump sum amount lower than 15% is warranted (e.f. 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, Page 20 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined 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 of demand to be paid by the asessee 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 beenfiled 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 making such reference or the assessee filing such review, as the case may be.
(E) In granting stay, the Assessing Officer may impose such condition as he may think fit. He may, inter alia,-
(i) require an undertaking from the assessee that he will cooperate in the early disposal of appeal failing which the stay order will be cancelled;
(ii) reserve the right to review the order passed after Page 21 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined expiry of reasonable period (say 6 months) or if the assessee has not cooperated in the early disposal of appeal,or where a subsequent pronouncement by a higher appellate authority or court alters the above situations;
(iii) reserve the right to adjust arising,if any, against the demand, to the extent of the amount required for granting stay and subject to the provisions of section
245.
5. These instructions/guidelines may be immediately brought to the notice of all officer working in your jurisdiction for proper compliance." The Assessing Officer is required to grant stay of demand till disposal of the First Appeal where the outstanding demand is disputed before the CIT (Appeals) on payment of 15% of the disputed demand unless, of course, the case falls in the category discussed in para (B). 8.2 This also further provides for the Page 22 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined assessee to approach the Jurisdictional Administrative Principal CIT and CIT for a review of a decision if the demand granted by the Assessing Officer on payment of 15% disputed amount is still aggrieves the parties. The Assessing Officer is expected to dispose of the stay petition within a period of two week of filing of the petition. And a review petition if is filed by the assessee, it is also expected to be disposed of within two weeks of the assessing officer making such reference for the assessee filing the review application. 8.3 The undertaking for early disposal of the appeal can also be taken from the assessee. The officer can reserve the right to review the order passed after expiry of Page 23 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined reasonable period of six months or if assessee had not cooperated in the early disposal of the appeal can also reserve the right to adjust the refunds arising to the extent of the amount required for granting stay and subject to the provision of Section 245 of the IT Act. These are brought immediately to the notice of all officers concerned.
8.4 They had been further amended on 31.07.2017 where the standard rate of 15% of the disputed amount since was found to be on a lower side, the same has been revised to 20% of the disputed amount. All references to 15% stood modified to 20% of the disputed amount.
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NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined 8.5 It is quite obvious from these guidelines that they are issued by the Board for the purpose of all Assessing Officers, who are to act upon the same quickly and to abide by the same observing its spirit. It is obviously to be applied on an application moved by the assessee in a pending appeal.
8.6 In the opinion of the Assessing Officer, if 15% payment of a lump some amount is on a lower side, it can refer the matter to the Administrative Principal CIT or CIT, who can then decide the quantum of proportion of demand to be paid.
9. Noticing the fact that the appeal, which has been preferred on 30.04.2015 by the petitioner is still pending, begging Page 25 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined the attention of the authority for final adjudication after seven years, what is relevant for the purpose of this Court to decide is that the adjustment of refund which otherwise were due to be given to the petitioner had been adjusted over the period of time making it almost 65% of the demand which is being assessed in the appeal of the Assessment Year 2012-13, which is way beyond the percentage which has been contemplated under both the Office Memorandums, the one which was originally in existence at the time when this application was moved by the petitioner was speaking of 15% of the outstanding demand which is disputed before the CIT (Appeals) and the same had been then enhanced to 20% of the total dues.
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NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined 9.1 If this process of grant of stay in standardization of the quantum of lump some payment has been detailed by the Board as a pre-condition for the stay of the demand disputed for the CIT(Appeals), they would need to be adhered to for their binding on the Assessing Officer being the guidelines from the higher officer. If 15% or 20% as the case may be was not sufficient according to the Assessing Officer in the present case, there was nothing to prevent the officer concerned to refer the matter to the Principal CIT or CIT for it to consider and direct the higher payment of amount, which one does not find in this case.
9.2 In fact, the circular provides for Page 27 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined getting further undertaking from the assessee and also putting into certain onus which also has not happened. Only on the ground that there had been no application at all on the part of the petitioner that the authority concerned has chosen not to apply the contents of these Office Memorandums and had chosen to go and adjusting the refund.
10. It is even before this Court it is not the case of the respondent that the petitioner is in any manner delaying the adjudication of the appeal. In fact, the preparedness had been shown by the petitioner and the learned advocate, Mr.Shah has urged that the petitioner would be very keen to get the appeal adjudicated Page 28 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined as almost more than seven years have been completed and therefore, that ground also is not available with the revenue for it to deny the benefit of 20% of the amount, which has been the standardize practice the Assessing Officer is expected to follow.
11. It is indeed a matter of concerned for the Court that when the CBDT out of its concern for the citizenry lays down the guidelines and attempts to standardize the procedure all endeavors on its part would not yield any result unless the officers, who are in the field and are required to implement and act upon these guidelines actually attempt to follow it in its letter and spirit both.
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12. This is a classic case where even before this Court at the time of filing of affidavit-in-reply, the instructions given to the counsel is to the effect that there was a complete absence of any application when in fact at the time of filing of the appeal, the application has been made and assuming the application was prior in point of time, the gap is only of two days and that kind of a hyper technicality would hardly be expected when otherwise the assessee has fulfilled all other requirements for him to be entitled to the benefit of these circulars. In fact, even the date of 28.04.2015 he is not to be amplified in as much as the endorsement of the authority concerned is indicative of the same being of 30.04.2015. There has Page 30 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined been an application for rectification of the Assessment Order on 31.03.2015 that may not be treated as an application for the purpose of exercise of the powers given under the circular. The petitioner's express request to the respondent to keep the demand in abeyance till the time the appeal of the assessment year 2012-13 is disposed of ought to have been considered.
13. We have noticed that the adjustments which have taken place over the period of time by disregarding such a request has adjusted the refund to the tune of nearly 65%. When, in fact, 20% of the amount would come to Rs.4,10,67,754/- rounding the same that of to Rs.4.11 Crore, the remaining amount could not have been continued to be Page 31 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined adjusted against the demand which is yet to be adjudicated by the CIT (Appeals).
14. Accordingly, this petition preferred by the petitioner deserves to be allowed quashing and setting aside the order dated 11.01.2022 whereby the respondent refused to refund the excess amount adjusted beyond 20% of the demand raised by the respondent for the assessment year 2012-13. The only reason one could notice in the communication dated 11.01.2022 for denying and not acceding to the request of the petitioner is that the adjustment of the refund against the demand is done by the CPC system in accordance with the total outstanding demand. This has no reference whatsoever of both the CBDT Office Page 32 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023 NEUTRAL CITATION C/SCA/3697/2022 JUDGMENT DATED: 10/01/2023 undefined Memorandums referred to hereinabove. This highhanded approach on the part of the respondent is neither palatable nor endorsable. Therefore, it deserves interference at the ends of the Court.
15. Resultantly, this petition is allowed. The respondent authority is directed to refund the excess amount of Rs.4.11 Crore (rounded of) adjusted beyond 20% demand raised by the respondent for the assessment year 2012-13. We also direct further the assessee to cooperate in the early disposal of the appeal. If the assessee fails to cooperate in the disposal of the appeal, the respondent shall be at liberty to approach this Court for review its order. Page 33 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023
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16. With the consent of both the sides, the Appellate Authority is directed to dispose of the appeal within a period of eight weeks from the date of receipt of a copy of this order. The amount of refund shall be given to the petitioner within a period of four weeks from the date of receipt of a copy of this order. It shall be remitted in his account directly.
17. Over and above the regular mode of service, direct service through e-mode on official email address is also permitted.
(SONIA GOKANI, J) (SANDEEP N. BHATT,J) M.M.MIRZA Page 34 of 34 Downloaded on : Sun Sep 17 20:40:44 IST 2023