Litle More Engineering Private Limited Vs Union of India & Ors (Calcutta High Court)
The Calcutta High Court examined a writ petition challenging the action of the revenue authorities in adjusting refund amounts due to the petitioner for the assessment year 2024–25 against an outstanding tax demand relating to the assessment year 2013–14. The earlier demand arose from an assessment order dated March 11, 2016 passed under Section 143(3) of the Income Tax Act, 1961. The petitioner had filed an appeal against that order before the Commissioner of Income Tax (Appeals) and, during the pendency of the appeal, sought a stay of demand under Section 220(6) of the Act. Upon depositing more than 20% of the disputed tax, the Assessing Officer granted a stay and treated the petitioner as not being in default.
Despite the subsisting stay of demand, the revenue authorities adjusted the refund payable for assessment year 2024–25 against the stayed demand for assessment year 2013–14 by invoking Section 245 of the Act. The petitioner contended that such adjustment was contrary to law, as the demand had already been stayed under Section 220(6). The revenue, while not disputing the factual position regarding the stay and deposit, suggested expeditious disposal of the pending appeal instead of directing a refund.
