Delhi High Court Directs Dept. To Reconsider Travelport UK’s Refund Adjustment

The Delhi High Court has directed the department to reconsider Travelport UK’s refund adjustment on the basis of the contents of the writ petition.

The bench of Justice Vibhu Bakhru and Justice Amit Mahajan has set aside the department’s action in adjusting a sum of Rs. 6,27,20,736 under Section 245 of the Income Tax Act and remanded the matter to the concerned authority to decide afresh, within a period of four weeks.

The petitioner/assessee has challenged the order by which a sum of Rs. 6,27,20,736, which was payable to the petitioner, was adjusted by the respondents against the demand for a prior period (Assessment Year 2019-20). The intimation for proposing an adjustment under Section 245 of the Income Tax Act, 1961, was issued on November 3, 2012, affording the petitioner a period of thirty days to respond as to why such an adjustment should not be made.

The petitioner contended that it was impermissible for the respondents to make any adjustment for the dues pertaining to the Assessment Year 2019-20, as the demand in respect of the assessment year stayed in terms of an order dated July 22, 2022, passed by the Income Tax Appellate Tribunal.

The petitioner points out that the respondents’ online portal on November 15, 2022, also reflected that the demand remained.

The petitioner was afforded thirty days to respond to the notice explaining why the adjustment of Rs. 6,27,20,736 should not be made against the demand outstanding for the Assessment Year 2019–20. The respondents proceeded to adjust the amount and issue a refund for the balance amount on November 17, 2021. The petitioner claimed that it was entitled to receive the entire refund of Rs. 31,21,36,560 without any adjustment under Section 245 of the Act.

The department contended that the intimation under Section 143(1) indicates that there was "no response" from the petitioner.

The petitioner claimed that the note was misleading. The petitioner was, by an intimation dated November 3, 2022, provided a period of thirty days to respond as to why the adjustment should not be made. However, the adjustment was made prior to the expiration of the thirty-day period.

The court, while remanding the matter back to the department, directed that the authority consider the contents of the petition as the petitioner’s response pursuant to the intimation dated November 3, 2012.

Case Title: Travelport International Operations Limited United Kingdom Versus Commissioner Of Income Tax International Taxation 3 N.Delhi & Ors.

Citation: 2023 LiveLaw (Del) 506

Date: 26.05.2023

Counsel For Petitioner: Piyush Kaushik

Counsel For Respondent: Aseem Chawla

Click Here To Read The Order