2021 (12) TMI 1350 - HC - Income Tax

Assessment order u/s 143(3) making additions under Section 69-A - petitioner has filed appeal before the CIT-A against addition and said appeal is presently pending for hearing - meanwhile demand notices were issued to the petitioner which were followed by garnishee notices - HELD THAT - After hearing learned counsel for the parties and on due consideration, we are of the view that it would meet the ends of justice if a direction is issued to the Appellate Authority i.e., respondent No.1 to take up the stay petition of the petitioner dated 05.04.2021 and pass appropriate orders thereon in accordance with law. We are of the further opinion that the said stay petition should be decided within a period of six weeks from the date of receipt of a copy of this order. Till such time, the demand pursuant to assessment order dated 21.12.2019 shall remain stayed.

Summary

Issues involved: Assessment order under Income Tax Act, 1961; Appeal before Commissioner of Income Tax; Stay petition before Appellate Authority; Non-consideration of stay petition leading to garnishee notices; Writ petition for direction to consider stay petition.

Analysis:

The judgment delivered by the High Court pertains to a case where the petitioner, an assessee under the Income Tax Act, 1961, was assessed by respondent No. 2 for the assessment year 2017-18. The assessment order made additions under Section 69-A of the Act, resulting in a higher income assessment than what was originally returned by the petitioner. Subsequently, the petitioner filed an appeal before the Commissioner of Income Tax (Appeals), Hyderabad-I, which was pending for hearing.

However, during this process, demand notices followed by garnishee notices were issued to the petitioner. Feeling aggrieved by the non-consideration of the stay petition dated 05.04.2021 filed before the Appellate Authority, i.e., respondent No.1, despite facing demands with garnishee notices, the petitioner approached the High Court through a writ petition seeking direction for the consideration of the stay petition.

Upon hearing both parties, the High Court, after due consideration, directed the Appellate Authority, respondent No.1, to take up the petitioner's stay petition and pass appropriate orders within six weeks from the date of the court's order. The court further ordered that the demand pursuant to the assessment order shall remain stayed until the decision on the stay petition is made. The writ petition was disposed of, with miscellaneous applications pending to be closed, and no costs were imposed.

In conclusion, the High Court's judgment addressed the issue of non-consideration of the petitioner's stay petition by the Appellate Authority despite facing demands with garnishee notices. The court intervened by directing the timely consideration of the stay petition and ordered a stay on the demand until a decision is reached, ensuring justice is served in the matter.