Law: Income Tax Act, 1961

Section: 245

Income-tax----Refund---Adjustment of refund against amounts due for subsequent year---Adjustment can be made only by Revenue---Revenue must give assessee prior intimation of such adjustment---Indian Income Tax Act, 1961, S.245. The adjustment of the refundable amount against tax dues can be made and must be made in accordance with section 245 of the Income-tax Act, 1961. Under section'245 a prior intimation in that regard must originate from the Revenue. Only thereafter, the Revenue has jurisdiction to make the set off. The set off is to be made by the Revenue after following the law and observing the mandate of section 245. For the assessment year 1991-92, the assessee was assessed to a refund order. For the assessment year 1993-94, there was assessed liability and the assessee filed the declaration and sought payment of the proportionate amount as per the Kar Vivad Samadhan Scheme, 1998, for settlement of the disputes which were then pending before the Tribunal. The designated authority rejected the declaration on the ground that the dues of the assessment year 1993-94 were adjusted against the credit of the assessee by way of the refundable amount for the assessment year 1991-92 at the request of the assessee. On a writ petition to quash the order:-- Held, that in this caste the request of the assessee for adjustment was treated by the designated authority as a matter of completing the adjustment by itself and even as an acquiescence to such adjustment. When the initiation of the adjustment was not made by the Revenue at all, the assessee had nothing to acquiesce in. The impugned order of rejection by the designated authority had to be set aside and cancelled and had to be treated as replaced 'by an order accepting the declaration under the Kar Vivad Samadhan Scheme directing the assessee to pay to the designated authority a sum of Rs.52,59,742 within a period of four weeks. Upon such payment the due certificates should be issued to the writ petitioners within eight weeks. [It was made clear that on the wiping out of the liability for the assessment year 1993-94, the revival of the credit for the assessment years 1991-92 and 1992-93 would have to be…

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