Bilal Nazki, J. - (1.) This writ petition has been filed challenging the intimation dated 27.1.2006 issued by 1st respondent under Section 143(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), adjusting the amount of refund of Rs.32,58,795/- pertaining to the assessment year 2005-06 against the demand of Rs.45,14,870/-.
(2.) The facts are not at dispute. For the assessment year 2003-04, the assessee Company returned a total income of Rs.25,63,380/-. However, through an assessment order dated 30.12.2005, the Deputy Commissioner of Income-tax, under Section 143(3) of the Act, determined the total income as Rs.1,21,14,010/-. He determined the net tax payable by the assessee at Rs.45,14,870/-. The assessment order was served on the assessee on 16.1.2006. A notice of demand was issued under Section 156 of the Act for the assessment year 2003-04. It was served on the assessee on 16.1.2006. According to this notice, the tax was payable by the assessee within thirty days of the date of service. Thus, the demand was required to be made good by the assessee on or before 15th of February 2006. The assessee filed an appeal before the Commissioner of Income-tax within the stipulated period of thirty days and the appeal is pending before the Commissioner of Income-tax (Appeals). For subsequent assessment year i.e. 2005-06, the Company filed a return disclosing taxable income of Rs.11,69,051/-. The tax payable on the returned income was Rs.4,27,785/-. However, the Company paid excess tax i.e. Rs.35,31,400/-. It happened because tax was deducted at source from a portion of income received by the assessee during the relevant accounting year. The Assessing Officer accepted his return for the assessment year 2005-06 under the provisions of Section 143(1)(ii) of the Act and issued intimation on 27.1.2006, which was served on the petitioner-Company on 30.1.2006. By virtue of this order, the assessee was entitled to a refund of Rs.32,58,795/- including interest of Rs.1,55,180/-. Instead of refunding the money, the Assessing Officer adjusted this amount against the demand of Rs.45,14,870/- pertaining to assessment year 2003-04. The petitioner is aggrieved of this adjustment.
(3.) The main contention of the learned counsel for the petitioner is that no prior intimation as required under Section 245 of the Act was given before the amounts were adjusted. It is also contended that the amount found due for the assessment year 2003-04 could be paid on or before 15.2.2006, but the adjustment order was made on 27.1.2006 when, as a matter of fact, the assessee was not obliged to make payments in terms of the notices issued to him for the assessment year 2003-04.;