More than 20% of the amount recovered from Taxpayers: Whether excess amount need to be refunded to the Taxpayer?

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More than 20% of the amount recovered from Taxpayers: Whether excess amount need to be refunded to the Taxpayer?

 

 

At present, CBDT circular provide for grant of stay of demand if 20% minimum of the demand amount is paid by the taxpayers. The question arises what if the assessee has not paid the 20% demand and didn’t seek stay order by doing it voluntarily.

There are cases wherein more than 20% of the demand is recovered by the department even though the appeal is filed by the taxpayers. The question arises as to whether amount in excess of 20% of the amount can be refunded.

Here is one interesting case before Delhi High Court as under:

 

GOEL ROAD CARRIERS PRIVATE LIMITED

VERSUS

ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-10 (2) ,

DELHI & ANR.-

No.- W.P.(C) 6885/2022 & CM Appl. 20970-20971/2022

Order Dated.- May 2, 2022

Delhi High Court has held as under:

  1. Refund has been adjusted against the outstanding tax demand by the Authority without following the due procedure prescribed under the said Section in as much as no notice or opportunity of pre-decisional hearing had been provided to the petitioner prior to such adjustment of refund.
  1. This Court is of the opinion that the petitioner is entitled to refund of adjustments made in excess of 20% of the disputed tax demands and Rs.30,000/-set off of refunds against tax payable.
  1. Consequently, this Court directs the respondents to verify the facts stated in the writ petition and if it finds them to be true and correct then refund the amount adjusted in excess of 20% of the disputed tax demands for the Assessment Year 2012-13 as well as Rs.30,000/-as mentioned in the intimation under Section 245 of the Act to the petitioner within four weeks.
  1. The Appellate Authority is also directed to decide the petitioner’s appeal challenging the order dated 27th November, 2019 within a year

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