2014 (1) TMI 1409 - HC - Income Tax

Validity of demand notice - Held that - The assessment order was passed on 30.12.2013 against which further appeal can be filed to the Income Tax Appellate Tribunal under Section 253 of the Act within 60 days from the date of receipt of a copy of the order - As the appellate remedy is available to the petitioner it could be accepted and the authority may thereafter proceed with the matter The respondents are directed to not to take any coercive steps for recovery against the petitioner till the appeal time is exhausted Decided in favour of petitioner.

Summary

Issues involved: Challenge to demand notice seeking quashing, forbearance from coercive steps, legality of intimation for immediate payment, authority's obligation post-order, timing of appeal filing, and legality of recovery proceedings.

Analysis:

1. The petitioner challenged a demand notice seeking to quash it and forbear the respondents from taking coercive steps for recovering an alleged liability. The impugned order directed the petitioner to pay a substantial amount immediately following the disposal of an appeal application. The petitioner contended that the respondents hastily demanded payment before the appeal time limit of 60 days had lapsed, questioning the legality of the order.

2. The counsel for the petitioner argued that the respondents' intimation for immediate payment, despite the availability of the appeal remedy, was premature and should not stand against the petitioner. On the other hand, the Revenue's counsel defended the action, stating that the authority is not obligated to wait for the petitioner to move the appellate forum before initiating recovery proceedings.

3. The court noted that the original authority passed the assessment order, providing a 60-day window for the petitioner to appeal to the Income Tax Appellate Tribunal. While the appellate remedy was available, the respondents initiated recovery proceedings without legal impediment, despite the reasonable time for the petitioner to prefer an appeal. The court directed the respondents to refrain from coercive recovery steps until the appeal time had expired, allowing them to act as per the appellate authority's order thereafter.

4. Consequently, the court disposed of the writ petition with the direction to the respondents to withhold coercive actions until the appeal period elapsed. The judgment emphasized the importance of allowing the petitioner the full appeal time before initiating recovery proceedings, ensuring legal compliance and fairness in the process.