Your Income Tax Refunds Can Be First Adjusted Against Demands of Subsequent Years 
Hon’ble Supreme Court in Northern Coal Fields Ltd. Versus Assistant Commissioner of Income Tax & Others 2017 (8) TMI 43 has upheld the Hon’ble MADHYA PRADESH HIGH COURT Judgement that wherein held Section 245 of the Act infact permits the Revenue to set off any demand from the amount to be refunded but the only condition is of intimation in writing to such person against whom action is proposed to be taken.

Court Has Held that :- 

We find that demand having been raised against the petitioner for the Assessment Years 2013-14 and 2014-15 and intimation having been sent to the petitioner on 05.01.2017, the mandate of Section 245 was satisfied by the Revenue before making adjustment from the refund due to the assessee from the tax due to the assessee for the subsequent years. In view thereof, we do not find any merit in the writ petition, the same is dismissed.

In the facts of this case, we are not inclined to interfere with the order of the High Court. However, after the adjustment of the tax in the next year, the balance amount, if any, should be refunded to the petitioner by the Income Tax Department. The Special Leave Petition is dismissed.

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