The Bombay high court has recently held that, income-tax (I-T) officers cannot adjust the refunds due to taxpayers against the outstanding demands, in excess of the limits laid down in instructions, circulars and guidelines issued by the Central Board of Direct Taxes (CBDT), in connection with granting the stay on demand.
This order comes as a relief, especially for India Inc and high net-worth individuals where the amounts at stake are significant. If refunds that are due are fully adjusted against any tax demand, even if the tax demanded has been appealed against, it adversely impacts the taxpayers.