Kishore Mohanlal Dingra Vs ACIT (Bombay High Court)
Bombay High Court Directs Refund of Amount Adjusted Against Demand Despite 20% Payment and Pending Appeal
Mumbai: The Bombay High Court has directed the Income Tax Department to refund an amount adjusted from a taxpayer’s refund against an outstanding tax demand, emphasizing that such adjustment is unwarranted when the taxpayer has already paid 20% of the demand and the appeal against it is pending. The court’s decision, delivered in the case of Kishore Mohanlal Dingra versus Assistant Commissioner of Income Tax (ACIT), reinforces the principle that the balance demand is effectively stayed once the mandated pre-deposit of 20% is made, in line with circulars issued by the Central Board of Direct Taxes (CBDT) and previous court rulings.
The petitioner, Kishore Mohanlal Dingra, had approached the High Court challenging the action of the Income Tax Department in adjusting his tax refund for the Assessment Year (AY) 2014-15 against a demand raised for AY 2016-17.
The outstanding demand for AY 2016-17 arose from an assessment order passed under Section 143(3) of the Income Tax Act, 1961, on December 30, 2018. This order determined the tax liability for that year, resulting in a demand of Rs. 23,63,374/- against the petitioner.
