If an issue is decided in favour of the assessee giving rise to a refund in an earlier year, that refund cannot be adjusted under s 245 on account of the demand on the same issue in a subsequent year, as held by DelHC in Maruti Suzuki India Limited v Dy CIT — In favour of: The assessee; Writ Petition (Civil) No 2252/2011.
The word “recovery” is comprehensive and includes both coercive steps to recover the demand and the adjustment of a refund to recover the demand. An adjustment under s 245 of the Act is a form/method of recovery.
The conduct and action of the revenue in recovering the disputed tax in respect of additions on issues already covered against them by earlier orders of the ITAT or CIT (Appeals) is unjustified and contrary to law. Accordingly, directions were issued to refund tax.
Recovery — Section 220(6) has no application to a case where an appeal is filed before the Tribunal, though the Tribunal has inherent power to grant the stay.
Decided on: 25 November 2011.
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