Landmark Property Development Co Ltd Vs DCIT (Delhi High Court)
System Glitch No Excuse- Refund Cannot Be Blocked by CPC Limitations -Advance Tax Credit Must Be Given- Delhi HC Directs Manual Refund in Demerger Case –
The Delhi High Court addressed a writ petition concerning the grant of credit for advance tax paid by a predecessor entity in the context of a corporate demerger. The petitioner argued that part of the advance tax deposited in the PAN of the predecessor ought to be credited to the demerged company, but due to system limitations at CPC, such adjustment was not being reflected, resulting in an incorrect demand & blocking of refund.
On an earlier date, the Revenue had sought time to resolve the issue. At the next hearing, the Department placed on record an email dated 15.09.2025 from the DCIT, acknowledging technical limitations in the IT system which prevented partial credit transfer between PANs. It was stated that the matter was being handled manually, & a proposal had already been sent to the CCIT (Central), New Delhi for approval to issue a paper refund after giving manual credit of the disputed advance tax. The Revenue also proposed to mark the impugned demand as “stayed” to prevent future refunds from being wrongly adjusted at CPC.
