LSI India Research And Development Private Limited Vs Assistant Director Of Income Tax Centralized Processing Center (Karnataka High Court)
In the case of LSI India Research And Development Pvt. Ltd. vs Assistant Director of Income Tax, the Karnataka High Court addressed an erroneous adjustment of a refund for the assessment year 2014-15 against an income tax demand for 2017-18. LSI India had a refund of Rs. 17.48 crore due for 2014-15, which was mistakenly adjusted against a disputed demand for 2017-18, despite a stay order being in place on the latter demand. The company had already complied with the requirement of depositing 20% of the disputed tax amount for 2017-18, and thus the remaining demand was stayed pending appeal.
The court found that the adjustment of the refund was unlawful since a stay order had been granted for the 2017-18 demand. Referring to the Central Board of Direct Taxes (CBDT) office memos, the court noted that once 20% of the disputed demand is paid, the assessing officer must grant a stay, which had occurred in this case. Consequently, the Karnataka High Court directed the tax department to refund the amount of Rs. 17.48 crore to LSI India within eight weeks, along with applicable interest.
