2013 (7) TMI 201 - HC - Income Tax

Stay of recovery proceedings - Petitioner not given opportunity of hearing - Held that - in case any application for stay of recovery proceedings of demand has been preferred before the Commissioner of Income Tax (Appeal), he will look into the matter and pass appropriate orders, in accordance with law, within a maximum period of fortnight, from the date of filing of such application alongwith a certified copy of this order - Decided in favour of Revenue.

Summary

Issues Involved:
1. Provisional attachment of bank accounts without opportunity of hearing.
2. Assessment proceedings and appeal process under the Income Tax Act, 1961.
3. Application for stay of recovery proceedings.

Analysis:

Issue 1: Provisional attachment of bank accounts without opportunity of hearing
The petitioner, a Private Limited Company engaged in various business activities, filed its return of income for the Assessment Year 2010-11. Subsequently, a notice under Section 143 (2) was issued for scrutiny. The petitioner claimed that before the approval for provisional attachment of bank accounts was obtained, they were not given an opportunity of hearing. The respondent argued that the case was selected for scrutiny with proper approval, and due to the petitioner's failure to provide necessary information and submission of false information, the Assessing Officer provisionally attached the bank accounts under Section 281 B (1) of the Income Tax Act, 1961. The High Court directed that any application for stay of recovery proceedings should be decided expeditiously by the Commissioner of Income Tax (Appeals) within a fortnight from the date of filing.

Issue 2: Assessment proceedings and appeal process under the Income Tax Act, 1961
The Assessing Officer passed an assessment order under Section 143 (3) of the Income Tax Act, 1961, which led the petitioner to file an appeal before the Commissioner of Income Tax (Appeals). The respondent highlighted that the petitioner did not file any application for interim relief along with the appeal memo. The High Court acknowledged the petitioner's request for an opportunity to file an application for stay of recovery proceedings during the appeal process. Both counsels agreed to this request, and the Court disposed of the writ petition with a direction for the Commissioner of Income Tax (Appeals) to decide on any application for stay of recovery proceedings within a maximum period of two weeks from the date of filing.

Issue 3: Application for stay of recovery proceedings
The learned Counsel for the petitioner requested an opportunity to submit an application for stay of recovery proceedings during the appeal pending before the Commissioner of Income Tax (Appeals). The respondent did not object to this request. Consequently, the High Court directed that any such application should be considered by the Commissioner of Income Tax (Appeals) promptly, and appropriate orders should be passed within two weeks from the date of filing along with a certified copy of the Court's order.

This detailed analysis of the judgment from the Allahabad High Court addresses the issues related to the provisional attachment of bank accounts, assessment proceedings, and the application for stay of recovery proceedings under the Income Tax Act, 1961, providing a comprehensive understanding of the legal aspects involved in the case.