2014 (7) TMI 176 - HC - Income Tax

Stay application Notice issued u/s 221(1) of the Act Held that - The petitioner has preferred an appeal before the first respondent and it is pending the petitioner is directed to move the appellate authority for stay and necessary orders - Since the stay petition is pending before the appellate authority - second respondent is directed to give necessary notice to the petitioner and then pass orders on the stay petition - Till then it is directed that the respondents shall not take any coercive action.

Summary

Issues:
1. Notice under Section 221(1) of the Income Tax Act for outstanding arrears in respect of Assessment Year 2007-08.
2. Challenge to a demand notice dated 03.12.2013 for payment in respect of Assessment Year 2006-07 and 2007-08.

Analysis:
1. The petitioner, a registered Society, reported losses in its income tax returns for various Assessment Years. The first respondent issued a notice under Section 221(1) of the Income Tax Act, demanding payment of &8377;19,96,880/- as outstanding arrears for the Assessment Year 2007-08. The petitioner, having received the intimation under Section 143(1) of the Act only on 16.08.2013, filed an appeal before the second respondent seeking a stay on the collection of the disputed demand. As recovery proceedings were initiated, the petitioner also filed a petition before the first respondent requesting a stay of recovery until the appeal is disposed of by the second respondent.

2. Subsequently, the first respondent issued a demand notice on 03.12.2013, requiring the petitioner to immediately pay &8377;1,18,750/- for the Assessment Year 2006-07 and &8377;19,96,880/- for the Assessment Year 2007-08. The petitioner challenged this notice in the present writ petition. After hearing both parties, it was noted that the petitioner had already filed an appeal before the first respondent, which was still pending. The court directed the petitioner to approach the appellate authority for necessary stay orders.

3. The respondents assured the court that no coercive action would be taken during the pendency of the stay petition. Consequently, the court disposed of the writ petition, instructing the petitioner to pursue the necessary stay orders from the appellate authority. The second respondent was directed to notify the petitioner and decide on the stay petition within four weeks from the date of the court order. Until then, the respondents were prohibited from taking any coercive action. The judgment concluded without imposing any costs, and all related miscellaneous petitions were closed.