Piramal Finance Limited Vs DCIT (Bombay High Court)
The Bombay High Court considered a writ petition challenging the adjustment of a tax refund and the subsequent order of the Income Tax Appellate Tribunal (ITAT). The petitioner challenged the action of the tax authorities in adjusting the entire refund due for Assessment Year (AY) 2005–06 against the tax demand for AY 2020–21 in excess of the limit permitted by the Tribunal’s earlier stay order, as well as the Tribunal’s order dated 09.01.2026 which declined to direct refund of the excess adjustment.
A final assessment order dated 22.07.2024 assessed the petitioner’s total income for AY 2020–21 at ₹584,23,47,150 and raised a tax demand of ₹74,06,35,441. The petitioner filed an appeal before the Tribunal and also applied to the Assessing Officer for a stay of demand until the appeal was decided. The Assessing Officer rejected the stay application on 10.12.2024.
The petitioner subsequently approached the Tribunal for a stay of recovery. By order dated 17.01.2025, the Tribunal granted a conditional stay. It noted that a refund of ₹43.36 crore was due to the petitioner for AY 2005–06 and directed that the refund could be adjusted only to the extent of 20% of the outstanding demand for AY 2020–21. Recovery of the remaining 80% of the demand was stayed for 180 days or until disposal of the appeal.
