| Question And Answer | |
|---|---|
| Subject: | Adjustment of demand, without giving notice ? |
| Category: | Income-Tax |
| Querist: | Ravi aiftp |
| Answered by: | Mrs.Prem Lata Bansal, Senior Advocate |
| Tags: | Adjustment of demand, without giving notice |
| Date: | January 16, 2024 |
Whether adjustment of demand raised in earlier years against the refund of the current year can be made by the Assessing Officer without giving any notice u/s 245 of the Act?
It is to be stated that no adjustment of demand of earlier years is permissible against the refund of current year in the absence of mandatory intimation required to be given u/s 245 of the Income Tax Act.
In Bharat Petrolium Corporation Ltd. v. Asstt DIT (2021) 133 Taxmann.com 320 (Bom) Bombay High Court have held that the requirement of prior intimation u/s 245 of the Act is a mandatory requirement and failure to comply with this mandatory requirement of prior intimation would make the entire adjustment wholly illegal.
In view of above, the adjustment made by the Assessing Officer is illegal and assessee is entitled to the refund of current year.
Source : AIFTP Journal December 23