SABETA DETERGENTS LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE petitioner complains that Section 245 of the Income-tax Act, 1961, was not complied with before the refund of a sum of Rs. 12 lakhs for the assessment year 1996-97 was adjusted towards the arrears of tax, in the calculation of the amount outstanding as on March 31, 1998, which is the material date for determining the extent of the relief to be granted to those availing of the Samadhan Scheme.

(2.) THE petitioner does not dispute the fact that he had in fact received an intimation under Section 143(IXa) of the Act for the assessment year 1996-97 in which the amount of refund payable to him had been set out. That order itself states prepaid tax adjustment : that is refund is adjusted against tax due for 1995-96. Despite that intimation having been received by the assessee, the assessee did not communicate any reason to the Department as to why the adjustment as proposed therein should not be made. THE assessee chose to remain silent.

(3.) RELIANCE was also placed on the decision of the Bombay High Court in the case of Suresh B. Jain v. A.N. Shaikh, 16th ITO [1987] 165 ITR 151, herein again, it was held that the adjustment can only be after giving intimation in writing to the person of the proposed action. In that case, it was found that no such intimation had been given, which rendered the action of the Income-tax Officer illegal.