Philco Exports Private Limited Vs ACIT (Delhi High Court)
The Delhi High Court decided a writ petition under Article 226 challenging the recovery of ₹11,14,660 by the Income Tax Department from the petitioner’s refunds for subsequent years, purportedly towards an outstanding demand for AY 2001–02. The recoveries were made between 2010 and 2017, as disclosed to the petitioner through a departmental communication dated 20.02.2019 in response to an RTI application. The petitioner contended that despite repeated representations and RTI requests, the Department failed to supply a copy of the assessment order creating the demand. It was argued that without service of the assessment order and a demand notice under Section 156 of the Income Tax Act, 1961, no statutory liability arose and the recoveries were illegal and violative of fundamental rights.
During the proceedings, the Court repeatedly directed the Department to produce particulars or a copy of the assessment order for AY 2001–02. The Department admitted its inability to provide the order, attributing the difficulty to the petitioner’s alleged failure to update its address in the PAN database and to the digitization of records, which made older files hard to trace. The Court acknowledged that the Department’s contention regarding non-updation of address might explain non-service earlier; however, it emphasized that once recovery was effected and the petitioner sought the assessment order, it was incumbent upon the Department to furnish a copy. The continued failure to do so, even pursuant to court directions, rendered the recovery without authority of law.
