2021 (1) TMI 1124 - HC - Income Tax

Recovery proceedings - Challenge order rejecting the application of the petitioner for complete stay of demand arising out of the order passed by the assessing officer under section 115Q read with section 115O of the Income Tax Act, 1961 for the assessment year 2017-18 till disposal of appeal before the Commissioner of Income Tax (Appeals) - interim protection granted to petitioner - HELD THAT - Tribunal itself has decided to hear the appeal out of turn, the hearing should be expedited. Further, we feel that if the assessing officer initiates any recovery measure, he should give at least two weeks' prior notice to the petitioner to avail its legal remedy. We issue the following directions (i) Let the Tribunal decide the appeal of the petitioner within three months from today; (ii) If the assessing officer resorts to any coercive measure for recovery of dues in the meanwhile, he shall give at least two weeks' prior notice to the petitioner to avail its legal remedy; (iii) All contentions are kept open.

Summary

Issues:
Challenge to order rejecting stay of demand under Income Tax Act, 1961 for assessment year 2017-18 till appeal disposal.

Analysis:
The petitioner challenged the orders dated 18.10.2019 and 21.11.2019 rejecting the application for complete stay of demand arising from the assessing officer's order under sections 115Q and 115O of the Income Tax Act, 1961 until the appeal before the Commissioner of Income Tax (Appeals) - 47 is disposed of. The Court continued interim protection granted earlier and scheduled final disposal on 3 January 2020. The respondent argued that the writ petition became infructuous as the appeal was disposed of by respondent No. 3 and further appealed to the Income Tax Appellate Tribunal. The petitioner sought a fresh stay of demand due to the Tribunal's adjournment of the appeal hearing. The Tribunal noted the assessing officer's contradictory stance on recovery actions and directed a notice period if coercive measures were to be taken. The Court ordered the Tribunal to decide the appeal within three months and mandated a two-week notice before any recovery action. All contentions were left open, and the writ petition was disposed of.

This case involved a challenge to the rejection of a stay of demand under the Income Tax Act, 1961, for the assessment year 2017-18 until the appeal is disposed of. The Court considered previous orders granting interim protection and continued the same until final disposal. The respondent argued that the matter became infructuous as the appeal was disposed of by respondent No. 3 and further appealed to the Tribunal. The petitioner highlighted the Tribunal's adjournment of the appeal hearing and the assessing officer's contradictory stance on recovery actions. The Tribunal directed a notice period before any coercive measures and expedited the appeal hearing. The Court ordered the Tribunal to decide the appeal within three months and mandated a two-week notice before any recovery actions, keeping all contentions open. The writ petition was disposed of accordingly.