Adjustment of liability against refund due of income tax

Our Income Tax Scrutiny for the Assessment year 13-14 is completed and refund is due to us. For A. Y. 10-11 case is pending before CIT (A) and for A. Y. 11-12 case is pending before ITAT. In both the cases we have not taken stay. Now, for A. Y. 13-14 AO is insisting that he will adjust the liability against refund for the years for which cases are pending. Please guide me as to can AO do this or he can't adjust the liability for previous years.

Also, provide me with the relevant sections and case laws if available.

Replies (1)

Dear Rahul,

In my opinion, presently the AO has only followed the prodcedure u/s 245 of intimating the assessee of his intention to adjust the demand. It would be wise to apply for a stay in the cases under dispute and reply to the AO within the time period mentioned in the notice intimating him about the stay.

Regards.

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