Karnataka High Court
Tally Solutions Private Limited vs Centralized Proceesing Centre on 13 October, 2025
Author: S.R.Krishna Kumar
Bench: S.R.Krishna Kumar
-1-
NC: 2025:KHC:40463
WP No. 21055 of 2025
HC-KAR
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
DATED THIS THE 13TH DAY OF OCTOBER, 2025
BEFORE
THE HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
WRIT PETITION NO. 21055 OF 2025 (T-IT)
BETWEEN:
TALLY SOLUTIONS PRIVATE LIMITED,
NO. 331-336 RAHEJA ARCADE,
KORAMANGALA, BANGALORE - 560 095.
A COMPANY REGISTERED UNDER
THE COMPANIES ACT, 1956
REPRESENTED HEREIN BY ITS
ASSOCIATE VICE PRESIDENT,
FINANCE ANNAMMA THOMAS
...PETITIONER
(BY SRI. SURYANARAYANA, SENIOR COUNSEL FOR
SMT. TANMAYEE RAJKUMAR, ADVOCATE)
AND:
1. CENTRALIZED PROCEESING CENTRE
REPRESENTED HEREIN BY
THE DEPUTY DIRECTOR OF INCOME TAX, CPC, BENGALURU - 560
500.
Digitally signed 2. DIRECTOR GENERAL OF INCOME-TAX (SYSTEMS),
by CHANDANA ARA CENTRE, GROUND FLOOR, E-2,
BM JHANDEWALAN EXTENSION,
Location: High NEW DELHI - 110 055.
Court of
Karnataka 3. DEPUTY COMMISSIONER OF INCOME-TAX
CIRCLE 7(1)(1), 80 FT ROAD,
BMTC BUILDING, KORAMANGALA,
BANGALORE - 560 095.
4. THE PRINCIPAL COMMISSIONER OF INCOME-TAX-3,
5TH FLOOR, BMTC BUILDING, 6TH BLOCK,
80 FEET ROAD, KORAMANGALA,
BANGALORE - 560 095.
...RESPONDENTS
(BY SRI. ARAVIND V. CHAVAN, ADVOCATE FOR R1 & R2;
SRI. E.I. SANMATHI AND
SRI. M. DILIP, ADVOCATES FOR R3 & R4)
-2-
NC: 2025:KHC:40463
WP No. 21055 of 2025
HC-KAR
THIS WP IS FILED UNDER ARTICLE 226 OF THE CONSTITUTION
OF INDIA PRAYING TO QUASH THE IMPUGNED INTIMATION DATED
23.12.2024 ISSUED BY THE 1ST RESPONDENT UNDER SECTION 143(1) OF
THE ACT BEARING DIN CPC/2425/A6/526686631 (ANNEXURE- C), THE
RECTIFIED ORDER DATED 23.12.2024 ISSUED UNDER SECTION 154 OF
THE ACT (ANNEXURE- E), BEARING DIN CPC/2425/U6/531558242, THE
RECTIFIED ORDER DATED 06.01.2025 ISSUED UNDER SECTION 154 OF
THE ACT (ANNEXURE -K), BEARING DIN CPC/2425/U6/534371884, THE
RECTIFIED ORDER DATED 04.03.2025 ISSUED UNDER SECTION 154 OF
THE ACT (ANNEXURE- N), BEARING DIN CPC/2425/U6/535301763, THE
RECTIFIED ORDER DATED 02.05.2025 ISSUED UNDER SECTION 154 OF
THE ACT (ANNEXURE- V), BEARING DIN CPC/2425/U6/538739788, AND
THE RECTIFICATION ORDER DATED 27.05.2025 ISSUED BY THE 1ST
RESPONDENT UNDER SECTION 154 OF THE ACT BEARING DIN
CPC/2425/U6/539142664 (ANNEXURE-X), FOR THE ASSESSMENT YEAR
2024-25 TO THE EXTENT QUESTIONED HEREIN AND ETC.,
THIS PETITION, COMING ON FOR ORDERS, THIS DAY, ORDER
WAS MADE THEREIN AS UNDER:
CORAM: HON'BLE MR. JUSTICE S.R.KRISHNA KUMAR
ORAL ORDER
In this petition, petitioner seeks for the following reliefs:
"a) Quash the impugned intimation dated 23.12.2024 issued by the 1st Respondent under Section 143(1) of the Act bearing DIN CPC/2425/A6/526686631 (Annexure-C), the rectified order dated 23.12.2024 issued under Section 154 of the Act (Annexure-E), bearing DIN CPC/2425/U6/531558242, the rectified order dated 06.01.2025 issued under Section 154 of the Act (Annexure-K), bearing DIN CPC/2425/U6/534371884, the rectified order dated 04.03.2025 issued under Section 154 of the Act (Annexure-n), bearing DIN CPC/2425/U6/535301763, the rectified order dated
02.05.2025 issued under Section 154 of the Act (Annexure-V), bearing DIN CPC/2425/U6/538739788, and -3- NC: 2025:KHC:40463 WP No. 21055 of 2025 HC-KAR the rectification order dated 27.05.2025 issued by the 1st Respondent under Section 154 of the Act bearing DIN CPC/2425/U6/539142664 (Annexure-X), for the assessment year 2024-25 to the extent questioned herein;
b) Directing the Respondents to refund an amount of Rs.26,74,72,791/- along with interest due thereon under Section 244A of the Act, forthwith; and
c) Pass such other or further orders as this Hon'ble Court may deem fir in the facts and circumstances of the case, in the interests of justice and equity."
2. Heard learned Senior Counsel for the petitioner and learned counsel for the respondents and perused the material on record.
3. A perusal of the material on record will indicate that the petitioner filed its Income Tax Returns under Section 139(1) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act' for short) on 11.12.2024 upon remitting the amount of Rs.17,89,00,521/- under Section 115QA of the Act, claiming refund of Rs.42,11,18,958/-. In pursuance of the same, respondent No.1 issued an intimation dated 23.12.2024 determining the reduced refund of Rs.35,17,00,720/- by creating a fictitious demand of Rs.8,83,68,584/-. In this context, it is pertinent to note that the said determination in the refund payable to the petitioner was on -4- NC: 2025:KHC:40463 WP No. 21055 of 2025 HC-KAR account of the entire credit of taxes paid under Section 115QA of the Act not been given in favour of the petitioner and as such, respondent No.1 adjusted the refund of the aforesaid amount of Rs.8,83,68,584/- towards fictitious demand created vide the intimation dated 23.12.2024.
4. Since there was an error apparent on the face of the record in the intimation dated 23.12.2024 and the demand dated 24.12.2024 raised pursuant thereto, petitioner filed a first rectification request dated 24.12.2024 requesting respondent No.1 to rectify the said intimation and grant the entire refund of Rs.42,11,18,958/- claimed by him. However, instead of accepting the request made by the petitioner for granting the refund of Rs.42,11,18,958/-, respondent No.1 instead of computing the eligible refund for Rs.35,17,00,720/-, passed its first rectification order reducing the refund payable to Rs.26,25,43,126/- once again without rectifying the error pointed out and without any basis.
5. The material on record discloses that the petitioner raised several grievances as well as filed four more rectification applications/requests which culminated in four more rectification orders thereby reducing the refund payable to the petitioner as 'Nil' -5- NC: 2025:KHC:40463 WP No. 21055 of 2025 HC-KAR by passing the impugned orders, which are assailed in the present petition.
6. A perusal of the material on record including the impugned five rectification orders will clearly indicate that apart from the fact that the entire credit of taxes paid by the petitioner under Section 115QA was not taken into account by respondent No.1 while considering the refund request of the petitioner in a sum of Rs.42,11,18,958/-, the respondent No.1 has illegally and arbitrarily reduced the entire refund of Rs.42,11,18,958/- payable to the petitioner from Rs.42,11,18,958/- to 'Nil' without there being any basis in this regard warranting interference by this Court in the present petition.
7. In fact, a perusal of the rectification orders will indicate that while computation of the refund, the amounts have been periodically and continuously reduced by adjusting a fictitious demand and non existing demand which is also not supported by any material on record.
8. Under these circumstances, I am of the considered opinion that the present petition deserves to be allowed and the intimation dated 23.12.2024 at Annexure-C and all five rectification -6- NC: 2025:KHC:40463 WP No. 21055 of 2025 HC-KAR orders at Annexures-E, K, N, V and X deserves to be set aside and necessary directions are to be issued to the respondent to refund a sum of Rs.26,74,72,767/- together with applicable interest under Section 244A in favour of petitioner within a stipulated time frame.
9. In the result, I pass the following:
ORDER
i) The petition is hereby allowed.
ii) The impugned intimation dated 23.12.2024 at Annexure-C and rectification orders at Annexures-E, K, N, V and X passed by respondent No.1 are hereby quashed.
iii) Respondent Nos.3 and 4 are directed to refund an amount of Rs.26,74,72,791/- along with interest due thereon under Section 244A of the Act, within a period of six weeks from the date of receipt of copy of this order.
Sd/-
(S.R.KRISHNA KUMAR) JUDGE MDS List No.: 2 Sl No.: 61