PRITI MILAN MEHTA,MUMBAI vs. DCIT, CPC, BENGALURU

PDF · subscribers
ITA 3179/MUM/2022Status: DisposedITAT Mumbai31 January 2023AY 2019-204 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that a refund cannot be adjusted against a demand arising from a protective addition, as such a demand cannot be enforced until it is converted into a substantive addition.

What were the facts?

The assessee claimed refunds for AY 2017-18 and 2019-20. However, these refunds were adjusted against a demand arising from a protective addition made in AY 2008-09, which was still pending before the Tribunal.

What were the issues?

Whether a refund due to an assessee can be adjusted against a demand arising from a protective addition where the finality of the addition is yet to be determined.

Which sections of the Income-tax Act were involved?

Section 244A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI

Before: SHRI AMIT SHUKLA, JM & SHRI S RIFAUR RAHMAN, AM

For Appellant: Shri Hiro Rai/ Ritu, Shri Minal Kamble, DR. सुनवाईकीतारीख/
For Respondent: Shri Minal Kamble

O R D E R

Per Amit Shukla, Judicial Member:

1.

The aforesaid appeal has been filed by the assessee against the combined orders dated 21.10.2022, passed by Ld.CIT(A),47

2.

Before us, the Ld. Counsel, submitted that in the return of income for the AY 2019-20 & 2017-18, refund was determined along with the interest u/s 244 A. However, the said refund have adjusted against a demand of Rs. 1,72,02,260/- which was on account of protective addition made in the assessment for AY 2008- 09. For AY 2017-18 the refund was of Rs. 1,95,422/-; and for the AY 2019-20 the refund was Rs. 4,46,650/-. The Ld. CIT(A) has upheld the adjustment of the refund against the protective demand for AY 2008-09 on the ground that the issue as yet not been crystallized in the appellate proceedings. The Ld. Counsel informed that though the appeal for AY 2008-9 is pending before the Tribunal. However, as on date the addition is on protective basis and once, the addition has been made on protective basis, no demand can be enforced. Thus, no adjustment of protective demand can be made against the refund due to the assessee, because it tantamount to recovery of demand.

3 & 3179/Mum/2022 PRITI MILAN MEHTA 3. After hearing both the parties and on perusal of the record, we find that it not an dispute that the in the return of income filed for AY 2017-18 on 30.07.2017, refund was claimed and same was also issued by the CPC. However, the refund determined has been adjusted against the demand for AY 2008-09 which was an account protective addition made by the AO. In support the assessment order for AY 2008-09 has also been filed before us. The entire demand arising out of addition of Rs. 147,20,2660/- was purely on account of protective addition. Once the fate of protective addition is not determined and till it is converted into substantive addition, no demand can be enforced nor can be adjusted against any refund. In case if demand is crystallized, if at all, protective addition is converted into substantive, then AO has all the powers of recovery of demand. Accordingly, Assessing Officer is directed to verify and if the tax has been adjusted against the refund against the demand created out of protective addition for AY 2008-09, then same cannot be adjusted and refund has to granted.

4.

With this direction both the appeals of the Assessee are allowed.

More judgments on Section 244A

All 1,186 judgments and leading authorities on Section 244A →

Recent GST High Court judgments

Search GST case law →