- 1 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 11TH DAY OF SEPTEMBER, 2025 BEFORE THE HON'BLE MR. JUSTICE M.NAGAPRASANNA WRIT PETITION NO. 17212 OF 2025 (T-IT) BETWEEN: ASIANXT DIGITAL TECHNOLOGIES PVT LTD (FORMERLY KNOWN AS ASIANET NEWS MEDIA AND ENTERTAINMENT PRIVATE LIMITED) NO.36, CRESENT ROAD BANGALORE NORTH BANGALORE G.P.O. BANGALORE -560 001 (REPRESENTED BY ITS DIRECTOR MR. NEERAJ KOHLI, AGED ABOUT 44 YEARS S/O MR. RAJINDRA PRASAD KOHLI) REGISTERED UNDER COMPANIES ACT 2013 …PETITIONER (BY SRI. NARENDRA KUMAR J. JAIN, ADVOCATE) AND: 1. THE ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1 (1)(1) BMTC BUILDING, 6TH FLOOR, MISSION ROAD Digitally signed by NAGAVENI Location: HIGH COURT OF KARNATAKA - 2 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 BENGALURU - 560 027 2. THE ASSISTANT DIRECTOR OF INCOME TAX CENTRAL PROCESSING UNIT, (CPC) INCOME TAX DEPARTMENT BENGALURU - 560 500 …RESPONDENTS (BY SRI. M. DILIP, ADVOCATE) THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO ISSUE AS FAR AS PETITIONER IS CONCERNED BY AN APPROPRIATE WRIT OR ORDER IN THE NATURE OF MANDAMUS OR OTHERWISE, TO THE LEARNED R-1 TO GRANT REFUND OF AMOUNT SET-OFF IN EXCESS OF 20 PERCENT OF DEMAND AS PER LETTER DTD 30.05.2025 ENCLOSED AS ANNX-G AND DIRECT THE LEARNED RESPONDENT TO GRANT INTEREST ON REFUND AS STIPULATED UNDER SEC 244A FOR AY 2020-21. THIS PETITION, COMING ON FOR PRELIMINARY HEARING IN 'B' GROUP, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: - 3 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 CORAM: HON'BLE MR. JUSTICE M.NAGAPRASANNA ORAL ORDER The petitioner is before this Court, seeking the following prayer: "A. Issue as far as Petitioner is concerned by an appropriate writ or Order in the nature of Mandamus or otherwise, to the Learned First Respondent to grant refund of amount set-off in excess of 20% of demand as per letter dated 30.05.2025 enclosed as Annexure G. B. Issue as far as Petitioner is concerned by an appropriate writ or Order in the nature of Mandamus or otherwise, directing the learned Respondent to grant interest on refund as stipulated under section 244A for AY 2020-21. AND C. Grant such other reliefs as this Honourable High Court may think fit including the cost of this writ petition" 2. Heard Sri. Narendra Kumar J. Jain, learned counsel appearing for the petitioner, Sri. M. Dilip, learned counsel appearing for the respondents and have perused the material on record. - 4 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 3. Learned counsel appearing for the petitioner submits that the petitioner is similarly placed with that of the petitioner in W.P.No.1204/2025 dated 26.03.2025, wherein the Co-ordinate Bench of this Court has held as follows: "In this petition, petitioner seeks for the following reliefs: “i) Declaring that the adjustment of refund of Rs. 2,24,18,499/-determined for the assessment year 2019- 20 and the refund of Rs.4,53,93,633/- determined for the assessment year 2023-24 against the demand for assessment year 2021-22 is illegal and without jurisdiction; (ii) Directing the Respondents to forthwith refund an amount of Rs. 2,24,18,499/- determined as refundable to the Petitioner vide order dated 03.03.2023 for the assessment year 2019-20 (adjusted with the demand for the assessment year 2021-22), along with applicable interest at Annexure-F. (iii) Directing the Respondents to forthwith refund an amount of Rs. 4,53,93,633/- determined as refundable to the Petitioner vide intimation dated 21.10.2024 for the assessment year 2023-24 (adjusted with the demand for the assessment year 2021-22), along with applicable interest at Annexure-S. (iv) Directing the Respondents not to recover any portion of the demand pertaining to the assessment year 2021-22 during the pendency of the appeal before the CIT(A) and for a period of three weeks thereafter; and (v) pass such other or further orders as this Hon'ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity. 2. Heard learned counsel for the petitioner and learned counsel for the respondents and perused the material on record. - 5 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 3. A perusal of the material on record will indicate that the issue in controversy involved in the present petition is directly and squarely covered by the decision of a Co-ordinate Bench of this Court in the case of M/s. Price Waterhouse, Bengaluru Vs. National Faceless Appeal Centre, Delhi and Ors passed in W.P.No.23784/2024 dated 25.09.2024 and as such, the present petition also deserves to be allowed in terms of the said decision of this Court. 4. This Court in the case of M/s. Price Waterhouse, (supra) has held as under: In this petition, the petitioner seeks the following relief's: “(i) Directing the 3rd Respondent to forthwith refund Rs.21,08,91,940/-, being demand recovered in excess of 20% of the demand raised for the assessment year 2012-13, along with applicable interest; (ii) Directing the 1st / 2nd Respondent to dispose of the appeal pending before it for the assessment year 2012-13 in Appeal No.CIT(A), Bengaluru-1/10224/2015-16 (old appeal No.9/10002/2017-18 (Manual Appeal Register No.:40/BU/2015-16)) (Annexure0B dated 29.04.2015 in a time bound manner, expeditiously; (iii) Directing the Respondents not to enforce the balance demand raised vide demand notice dated 31.03.2015 (Annexure-A2) until disposal of the appeal by the 1st / 2nd Respondent and for a period of three weeks thereafter; and (iv) Pass such other or further orders as this Hon’ble Court may deem fit in the facts and circumstances of the case, in the interests of justice and equity.” 2. Heard the learned Senior Counsel appearing for the petitioner and the learned counsel appearing for the respondents and perused the material available on record. 3. In addition to reiterating the various contentions urged in the petition and referring to the material available on record, the learned Senior Counsel for the petitioner submitted that aggrieved by the - 6 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 demand notice dated 31.03.2015 issued by respondent No.3 in relation to the assessment year 2012-13, the petitioner filed an appeal before respondent No.1 on 29.04.2015. In addition thereto, the petitioner filed stay applications before respondent No.3 seeking stay of the demand raised for the assessment year 2012-13 and the said applications were filed on 05.05.2015, 18.05.2015, 12.06.2015, 30.11.2016. On 05.10.2017, the petitioner filed written submissions and application for additional evidence and the proceedings before respondent No.1 are still pending adjudication. It is submitted that though the petitioner would be liable to pay only 20% by way of pre-deposit for the purpose of stay before the Appellate Authority in terms of the Circular dated 31.07.2017 and the petitioner would be entitled to refund of all the amounts payable to him in excess of the aforesaid 20%, the respondents have proceeded to adjust the amounts in excess of 20%, which is the maximum of amount of pre-deposit to be made by the petitioner, who is before this Court seeking direction for refund of the amounts adjusted in excess of 20% and for direction to the Appellate Authority to dispose of the appeals as expeditiously as possible. 4. In support of his submissions, the learned Senior Counsel appearing for the petitioner placed reliance on the judgment of this Court in the case of Pan Synthetics Private Limited and Centralized Processing Centre and others –W.P.No.9835/2024 dated 23.07.2024 as well as the Office Memorandum dated 31.07.2017 issued under Section 220 of the Income Tax Act, 1961. 5. Per contra, learned counsel appearing for the respondents submits that respondent No.1 would take up the appeals and dispose of the same as expeditiously as possible. 6. A perusal of the material available on record will indicate that it is an undisputed fact that the petitioner filed an appeal on 29.04.2015 and multiple stay applications were also filed by him between 05.05.2015 and 30.11.2016 and the petitioner is making earnest efforts to get the appeals as well as the stay applications disposed of. In this context, perusal of the Circular/Office Memorandum dated 31.07.2017 will indicate that in the event, the petitioner deposits 20% by way of pre-deposit, there shall be stay of demand till disposal of the appeal by the Appellate Authority. However, in the instant case, despite the petitioner - 7 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 having filed the appeal as long back as in the year 2015 and multiple stay applications between 2015 to 2016, the Assessing Officer has neither passed any orders on the stay applications nor as the Appellate Authority disposed of the appeals. On the other hand, the respondents have proceeded to adjust the refunds payable to the petitioner in excess of maximum 20%, which is clearly impermissible in law, particularly, having regard to the office memorandum dated 31.07.2017 and the judgment of this Court in W.P.No.9835/2024 dated 23.07.2024 referred supra wherein it is held as under: ORAL ORDER The petitioner has sought for directions to the respondents to refund an amount of Rs.1,99,98,090/- being the demand raised for the assessment year 2015-16 and 2016-17 which is stated to have been adjusted as against the refund due for the assessment year 2023-24. 2. It is the case of the petitioner that for the assessment year 2016-17, the third respondent has passed an assessment order and raised a demand on 26.05.2023, and for the assessment year 2015-16, the third respondent has passed an assessment order and raised the demand on 30.05.2023. 3. Aggrieved by such orders, appeals were filed before the Commissioner of Income Tax and the petitioner had filed an application seeking for stay of the demand for the assessment year 2015-16 as per Annexure-M and similar application was filed seeking stay of demand for the Assessment Year 2016-17 at Annexure-N. Petitioner submits that in terms of Annexure-P as against outstanding demand noticing that refund was granted upon processing the return for the assessment year 2023-24 and determination of refund of Rs.1,99,98,090/-, the said refund was adjusted for the demand as regards the assessment year 2015-16 and 2016-17. 4. It is the contention of the petitioner that the entirety of refund was adjusted and in light of their application for stay, if the demand for 2015-16 and 2016-17 is stayed, the question of adjustment of entirety of refund would not arise. 5. It is noticed that the assessment order for the year 2015-16 was passed on 16.02.2024 and for the year 2016-17 was passed on 26.05.2023. 6. It is not in dispute that the application for stay was filed on 11.01.2024 as regards assessment year 2015-16 and on the same date i.e., on - 8 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 11.01.2024 application for stay was filed as regards the assessment year 2016-17. As on the date of filing of the application for stay, the petitioner had the benefit of order of refund for the year 2023-24. If as on the date of filing the application for stay dated 11.01.2024, if the petitioner had made payment of 20% remaining 80% would have been stayed. 7. In light of adjustment at Annexure-P, only manner of moulding the relief would be adjustment of refund to an extent of 20% of the demand for the year 2015-16 and 2016-17. Once adjusted, the remaining amount of 80% of refund adjusted towards demand requires to be reversed by crediting the same to the petitioner. Accordingly, the third respondent is directed to refund the amount of 80% of the demand for the assessment year 2015-16 and 2016-17 as already been adjusted. Such refund to be made within a period of eight weeks from today. 8. Accordingly the petition is disposed off. 7. In view of the aforesaid facts and circumstances, I am of the considered opinion that the respondents were clearly not justified in adjusting the refund amounts payable to the petitioner in excess of 20% and consequently, necessary directions have to be issued to the respondents to refund the entire amounts payable to the petitioner in excess of 20% of the demand for the assessment year 2012-13 within a stipulated time frame and by directing respondent No.1 to dispose of the appeals within a stipulated time frame. 8. In the result, I pass the following: ORDER (i) The petition is hereby allowed. (ii) The concerned respondents are directed to refund the entire amount in excess of 20% of the demand raised for the assessment year 2012-13 together with the applicable interest back to the petitioner after due verification within a period of six weeks from the date of receipt of a copy of this order. (iii) The concerned respondent / Appellate Authority is directed to dispose of the appeal within a period of three months from the date of receipt of a copy of this order. - 9 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 (iv) Respondents are directed not to enforce the balance demand raised by any demand notice at Annexure-A2 dated 31.03.2015 till the expiry of period of three weeks after disposal of the appeal by the Appellate Authority. 5. It is also pertinent to note that on 25.02.2025, this Court has passed the following interim order: Heard learned senior counsel Sri.T.Suryanarayana for petitioner, learned counsel Sri.Aravind V. Chavan for respondent Nos.1 and 2 and learned counsel Sri.M.Dilip for respondent Nos.3 and 4. Learned counsel Sri.M.Dilip for respondent Nos.1 and 2 would submit that, pending disposal of the writ petition, the petitioner be directed to make representation to respondent Nos.3 and 4 for refund of the amount adjusted, which would be considered and order would be passed within four weeks. Learned senior counsel Sri.T.Suryanarayana would submit that the present refund relates to assessment year 2019-20 and 2023-24. He submits that for the assessment year relating to assessment year 2021-22, the petitioner filed appeal on 23.01.2023 and the stay applications were filed which are pending consideration. In the meanwhile, he submits that when the petitioner filed appeal, the petitioner was required to pre-deposit 20% of the assessment and the respondents have adjusted the entire amount. In the above circumstances, I deem it appropriate to direct the petitioner to request respondent Nos.3 and 4 for refund by making a representation within a week. Thereafter, respondent Nos.3 and 4 are directed to consider the request of the petitioner for refund within three weeks. List on 26.03.2025.” 6. In pursuance of the aforesaid order, the petitioner submitted a representation/application dated 03.03.2025, which was rejected vide communication dated 25.03.2025. However, having regard to the fact that the aforesaid communication was passed during the pendency of the present petition and finding recorded by him, the petitioner would be entitled to refund of entire - 10 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 amount in excess of 20% for the assessment year 2021- 22, I deem it just and appropriate to quash communication also in the present petition. 7. In the result, I pass the following: ORDER i) The petition is hereby allowed and disposed of in terms of M/s. Price Waterhouse, Bengaluru Vs. National Faceless Appeal Centre, Delhi and Ors passed in W.P.No.23784/2024 dated 25.09.2024. ii) The communication/order dated 25.03.2025 is hereby quashed. iii) The concerned respondents are directed to refund the entire amount in excess of 20% for the assessment year 2021-2022 together with interest, if applicable, back to the petitioner after due verification within a period of six weeks from the date of receipt of copy of this order. iv) Respondents are also directed not to take precipitative/coercive steps against the petitioner in relation to the balance demand raised at Annexure-J dated 13.12.2023 till expiry of period of three weeks after disposal of the appeal by the appellate authority." 4. Learned counsel appearing for the respondents would not dispute the position of law. - 11 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 5. In that light, the following: ORDER i) The petition is hereby allowed and disposed of in terms of M/s. Price Waterhouse, Bengaluru Vs. National Faceless Appeal Centre, Delhi and Ors passed in W.P.No.23784/2024 dated 25.09.2024. ii) The concerned respondents are directed to refund the entire amount in excess of 20% for the assessment year 2020-2021 together with interest, if applicable, back to the petitioner after due verification within a period of six weeks from the date of receipt of copy of this order. iv) Respondents are also directed not to take precipitative/coercive steps against the petitioner in relation to the balance demand raised, till expiry of period of - 12 - HC-KAR NC: 2025:KHC:36171 WP No. 17212 of 2025 three weeks after disposal of the appeal by the appellate authority. Sd/- (M.NAGAPRASANNA) JUDGE SJK List No.: 1 Sl No.: 89 CT-SG