Income Tax Refund can not be adjusted by Assessing officer without intimation : High Court

Facts of the Case

Income Tax department sought to adjust refund granted to assessee for assessment year 2019-20 against demands for assessment years 2015-16 and 2016-17,

Petitioner already filed appeal against outstanding demand of AY 2015-16 and 2016-17 and  deposited 20% amount. Thus petitioner shall not be treated to be an assessee in default for the recovery provisions 

Income Tax refund was adjusted before the receipt of intimation u/s 143(1) from CPC Banglore .

Decision of High Court

The fact that respondent has not followed the mandatory prior requirement of intimation under section 245 of the Act would make the adjustment wholly illegal and therefore, respondent was clearly in error in not refunding the amount.