Delhi HC Directs Department To Re-evaluate Refund Adjustment By Travelport UK

The Delhi High Court recently directed the department to review Travelport UK’s refund adjustment based on the arguments presented in the writ petition.

A bench of Justice Vibhu Bakhru and Justice Amit Mahajan set aside the department’s action of adjusting a sum of Rs. 6,27,20,736 under Section 245 of the Income Tax Act. The court remanded the matter to the relevant authority to reconsider and make a fresh decision within four weeks.

The petitioner, Travelport International Operations Limited UK, has filed a challenge against the order in which a payment of Rs. 6,27,20,736 owed to them was offset by the respondents against the outstanding dues from a previous period (Assessment Year 2019-20). The intimation regarding the proposed adjustment under Section 245 of the Income Tax Act, 1961, was issued on November 3, 2012, allowing the petitioner a thirty-day period to provide a response explaining why such an adjustment should not be implemented.

The petitioner argued that it was not permissible for the respondents to make any adjustment for the outstanding dues related to the Assessment Year 2019-20. This contention was based on the fact that the demand for that assessment year was stayed according to an order dated July 22, 2022, issued by the Income Tax Appellate Tribunal.

The petitioner also highlighted that the respondents’ online portal on November 15, 2022, still displayed the outstanding demand.

The petitioner was given a period of thirty days to provide a response to the notice, stating the reasons why the adjustment of Rs. 6,27,20,736 should not be made against the outstanding demand for the Assessment Year 2019-20. However, despite the pending response, the respondents went ahead and adjusted the mentioned amount, issuing a refund for the remaining balance on November 17, 2021. The petitioner asserted that they were entitled to receive the complete refund amount of Rs. 31,21,36,560 without any adjustment under Section 245 of the Income Tax Act.

The department argued that there was “no response” from the petitioner according to the intimation under Section 143(1).

The petitioner disputed the accuracy of the note, arguing that it was misleading. They pointed out that they had received an intimation on November 3, 2022, granting them a thirty-day period to provide a response regarding the adjustment. However, the adjustment was executed before the expiration of the stipulated thirty-day period.

The court, in remanding the matter to the department, instructed the authority to consider the contents of the petition as the petitioner’s response to the intimation issued on November 3, 2012.