2017 (10) TMI 1363 - HC - Income Tax

Recovery of the dues - Held that - The assessee does not appear to have paid even this 15% of the disputed demand and has now approached this Court by way of present writ petition. This Court is satisfied that the Respondent-Department s lower Assessing Authorities in all fairness should await the disposal of relevant stay applications filed by the petitioner-assessee before the next higher Authorities, either on executive side the Respondent No. 4-Principal Commissioner of Income Tax and/or First Appellate Authority, viz., Respondent No. 3 - Commissioner of Income Tax. Taking recourse to the coercive process for the recovery even prior to the disposal of such stay applications has forced assessee to rush to this Court for such interim reliefs, which actually deserves to be considered by such concerned higher Authorities of the Department itself created under the provisions of Income Tax Act, 1961 after giving due and reasonable opportunity of hearing to the assessee expeditiously and by a reasoned order.

Summary

Issues:
1. Prayer for writ of mandamus to stop enforcement of dues confirmed by order
2. Prayer for writ of mandamus to expedite appeal disposal
3. Request for interim relief to prevent coercive action for recovery
4. Stay application pending before First Appellate Authority and Principal Commissioner
5. Granting of interim stay by Joint Commissioner
6. Non-payment of 15% of disputed demand by assessee
7. Court's satisfaction with the need to await disposal of stay applications
8. Direction to lower Assessing Authority to refrain from coercive measures

Analysis:
The petitioner, an assessee, sought a writ to prevent the Income Tax Department from enforcing dues confirmed by an order until the appeal (ITA 146) is disposed of. The counsel emphasized the need for the Respondents not to take coercive action for recovery of disputed demands, particularly until the stay application is heard by the First Appellate Authority and Principal Commissioner. The stay application before the Commissioner of Income Tax (Appeals) was scheduled for a hearing, while the one before the Principal Commissioner was pending. The Respondent-Department was directed to accept notice, and it was revealed that an interim stay had been granted by the Joint Commissioner, requiring payment of 15% of the demand by a specified date.

The petitioner had not paid the 15% of the disputed demand and approached the Court through a writ petition. The Court acknowledged that the Respondent-Department's lower Assessing Authorities should wait for the disposal of relevant stay applications filed by the petitioner before higher Authorities. Coercive recovery measures before the resolution of such stay applications led the assessee to seek interim relief from the Court, which ideally should have been considered by the higher Departmental Authorities promptly and with a reasoned order. The Court directed that no coercive measures for recovery should be taken by the lower Assessing Authority until the relevant stay applications are decided by the concerned Authorities, emphasizing the importance of due process and fair opportunity for the petitioner.

In conclusion, the Court disposed of the petition with no costs, highlighting the necessity for the Respondent-Department to await the outcome of the pending stay applications before taking any coercive actions for recovery against the petitioner. The judgment underscored the significance of following proper procedures and providing a fair hearing to the assessee before resorting to enforcement measures.