Income Tax Refund adjusted Despite 20% Pre-deposit and Pending Appeal: Bombay HC directs to Refund Adjusted Amount

The Bombay High Court directed the Income Tax Department to refund an adjusted amount, noting that the tax refund was adjusted despite a pre-deposit made by the assessee and a pending appeal. The court found that the department's action of adjusting the refund against an existing demand, even though the assessee had already made a pre-deposit as a condition for filing the appeal and the appeal was still pending, was not justified. The High Court's direction to refund the adjusted amount underscores the principle that recovery of tax demands should generally be stayed when an appeal is pending and the required pre-deposit has been made.