Refund couldn’t be rejected on ground that it was adjusted against tax arears in absence of sec. 156 notice

Refund couldn't be rejected on ground that it was adjusted against tax arears in absence of sec. 156 notice

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Refund couldn’t be rejected on ground that it was adjusted against tax arears in absence of sec. 156 notice

[2018] 98 taxmann.com 454 (Bombay)
HIGH COURT OF BOMBAY
Nu-Tech Corporate Services Ltd.
v.
Income Tax Officer
Section 156, read with section 237, of the Income-tax Act, 1961 – Notice of demand (Service of notice) – Assessee claimed refund of tax along with interest pertaining to assessment years 1993-94, 1995-96 and 2002-03 – Revenue authorities rejected assessee’s claim on ground that amount of refund had been adjusted against tax demand relating to subsequent assessment years 2003-04 and 2009-10 – Assessee filed instant petition contending that no demand was ever raised in relation to aforesaid assessment years – It was noted that although revenue placed reliance upon copy of notice of demand found in official records, yet there was no evidence on record that such a notice under section 156 had been served on assessee – Thus, there was nothing in records which could attribute knowledge of tax demand to assessee – Whether in view of negligent approach adopted by revenue authorities, impugned order passed by them was to be set aside and a direction was to be issued to grant refund to assessee along with applicable rate of interest – Held, yes [Paras 5,6 and 16] [In favour of assessee]

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