M/S H. L. MALHOTRA AND COMPANY PVT. LTD vs. INCOME TAX OFFICER, WARD-11(1) NEW DELHI AND ANR.

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W.P.(C)/13711/2022HC DelhiDLHC01036213202222 September 2022Bench: HON'BLE MR. JUSTICE MANMOHAN,HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA3 pages
AI SummaryRemanded

What did the High Court hold?

The Delhi High Court considered the submissions of both parties. The Court found the course of action suggested by the Revenue's counsel to be fair and reasonable. Accordingly, the writ petition was disposed of with liberty granted to the Petitioner to file a rectification application before the jurisdictional Assessing Officer within two weeks. The Court directed the jurisdictional Assessing Officer to decide the rectification application within four weeks in accordance with the law. The Petitioner was also granted liberty to take appropriate steps in accordance with law if aggrieved by the decision on the rectification application. The rights and contentions of all parties were left open. No specific finding was made on the merits of the adjustment or the refund claim itself, as the matter was remitted for rectification.

What were the facts?

The Petitioner, M/s H. L. Malhotra and Company Pvt. Ltd., filed a writ petition seeking directions for the refund of Rs. 9,77,184/-, which comprised adjusted refunds for Assessment Years 2018-19 (Rs. 4,98,390/-) and 2019-20 (Rs. 4,78,794/-). The Petitioner contended that these refunds were adjusted against a demand of Rs. 9,39,600/- for Assessment Year 2007-08, which had already been paid on February 15, 2018. The Petitioner further stated that despite this payment and several communications, the Revenue issued an intimation under Section 245 of the Income Tax Act, 1961, proposing adjustment of refunds against outstanding demands for Assessment Years 2007-08, 2010-11, and 2011-12. The Petitioner noted that an alleged outstanding demand of Rs. 2,35,880/- for AY 2007-08 was adjusted against their refund on September 21, 2022.

What were the issues?

1. Whether the adjustment of refunds for Assessment Years 2018-19 and 2019-20 against a demand for Assessment Year 2007-08, which the Petitioner claims to have already paid, is arbitrary and without application of mind? Assessee's Contention: The Petitioner argued that the refunds due for AY 2018-19 and 2019-20, aggregating Rs. 9,77,184/-, were arbitrarily adjusted against a satisfied demand of Rs. 9,39,600/- for AY 2007-08, despite the demand having been paid on February 15, 2018. They also highlighted the issuance of an intimation under Section 245 for proposed adjustments against outstanding demands, and the subsequent adjustment of Rs. 2,35,880/- for AY 2007-08 on September 21, 2022. The Petitioner sought a direction for the immediate grant of the refund along with statutory interest. Revenue's Contention: The Revenue, through its counsel, suggested that the Petitioner file a rectification application for Assessment Year 2007-08.

Which sections of the Income-tax Act were involved?

Section 245

AI-generated summary — verify with the full judgment below

$~35 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 13711/2022 M/S H. L. MALHOTRA AND COMPANY PVT. LTD ..... Petitioner Through: Mr.Aseem Chawla with Mr.Manu K.Giri, Ms.Pratishtha Chaudhary, Ms.Basayar Khan and Mr.Shamik Saha, Advocates. versus INCOME TAX OFFICER, WARD-11(1) NEW DELHI AND ANR. ..... Respondents Through: Mr.Ajit Sharma, Sr.Standing Counsel for the Revenue with Mr.A.Renganath, Advocate. CORAM: HON'BLE MR. JUSTICE MANMOHAN HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA O R D E R % 22.09.2022 C.M.No.41871/2022 Exemption allowed, subject to all just exceptions. Accordingly, the application stands disposed of. W.P.(C) No.13711/2022 By way of the present petition, Petitioner seeks a direction to the Respondents to forthwith grant refund of Rs.9,77,184/- (adjusted refunds for the Assessment Years 2018-19 and 2019-20 for Rs.4,98,390/- & Rs.4,78,794/- respectively) as due to the Petitioner along with the subsisting This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/06/2026 at 20:57:26

statutory interest from the respective dates of adjustments from the Petitioner’s bank account. Learned counsel for the Petitioner states that the Assessing Officer pursuant to directions of the Income Tax Appellate Tribunal (ITAT) dated 28th April,2017, assessed the total income of Petitioner at Rs.26,72,110/- on 29th September, 2017 and raised a demand of Rs.9,39,600 for the Assessment Year 2007-08. He states that the Petitioner on 15th February, 2018 duly paid the said demand of Rs.9,39,600/- vide Challan No.02190 with IDBI Bank, Mumbai. Learned counsel for the Petitioner states that despite the aforesaid payment of demand , refunds due for Assessment Years 2018-19 and 2019- 20 for Rs.4,98,390/- & Rs.4,78,794/- respectively (aggregating Rs.9,77,184/-) have again been arbitrarily and without application of mind adjusted against the satisfied demand of Rs.9,39,600/- for the Assessment Year 2007-08. Learned counsel for the Petitioner states that the Respondents, despite several communications, has sent another intimation under Section 245 of the Act dated 06th May, 2022 for the Assessment Years 2007-08, 2010-11 and 2011-12 for proposed adjustment of refund against the outstanding demand(s). He states that only yesterday i.e. 21st September, 2022, the alleged outstanding demand of Rs.2,35,880/- for the Assessment Year 2007- 08 has been adjusted against refund due and payable to the petitioner. Issue notice. Mr.Ajit Sharma, learned senior standing counsel for the Respondents-Revenue accepts notice. He states that keeping in view the facts of the present case, it would be appropriate if the Petitioner were to file a rectification application for the Assessment Year 2007-08. This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/06/2026 at 20:57:26

In the opinion of this Court, the course of action suggested by Mr.Ajit Sharma is fair and reasonable. Accordingly, the present writ petition is disposed of with liberty to the Petitioner to file a rectification application before the jurisdictional Assessing Officer within two weeks. In the event, such an application is filed, the jurisdictional Assessing Officer is directed to decide the same within four weeks in accordance with law. In the event, Petitioner is aggrieved by the said decision, it shall be at liberty to take appropriate steps in accordance with law. The rights and contentions of all the parties are left open. MANMOHAN, J MANMEET PRITAM SINGH ARORA, J SEPTEMBER 22, 2022 KA This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 26/06/2026 at 20:57:26

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