2020 (7) TMI 815 - HC - Income Tax

Stay of demand - Unexplained money u/s 69A - substantial credits in the bank accounts of the petitioner of demonetized notes - HELD THAT - Both writ petitions have absolutely no merit and deserve to be dismissed in limine. The impugned order challenged has been passed by the Appellate Authority upon consideration of the merits as well as the financial and bank statements filed by the petitioner. The petitioner was directed to pay 25% of the tax demand within a specified time frame. The order also states that if the aforesaid direction was not complied with, the stay granted would stand revoked. No reason whatsoever to interfere with the attachment of the bank account.

Summary

Issues:
1. Challenge to the order passed by the Commissioner of Income Tax (Appeals) in a petition filed by the petitioner seeking stay of demand arising from an order of assessment for the Assessment Year 2017-18.
2. Challenge to the attachment of the petitioner's bank account due to non-compliance with directions in a previous order.

Analysis:

Issue 1:
The petitioner, a primary agricultural co-operative society, challenged the order passed by the Commissioner of Income Tax (Appeals) regarding a demand arising from an assessment order for the Assessment Year 2017-18. The petitioner had previously challenged the assessment order itself, which was rejected, granting the petitioner the liberty to file a statutory appeal. The issue in question related to substantial credits in the petitioner's bank accounts of demonetized notes, which were brought to tax as unexplained money under the Income Tax Act, 1961. The court noted that the petitioner had neither filed a return of income nor replied to notices prior to the assessment. However, since a statutory appeal against the assessment was pending, the court stated that the facts were noted for completion of the narration, and the appeal filed by the petitioner would be disposed of in accordance with the law without hindrance from any observations made in the current judgment.

Issue 2:
Due to the petitioner's non-compliance with directions in a previous order, the bank account of the petitioner was attached, leading to the filing of a petition challenging the attachment. The court found no reason to interfere with the attachment of the bank account based on the previous judgment dismissing the challenge to the order passed by the Commissioner of Income Tax (Appeals). The petitioner was advised to approach the Commissioner of Income Tax (Appeals) for an early hearing and disposal of the appeal. Consequently, the petition challenging the bank account attachment was also dismissed, and the petitioner was granted liberty to seek early hearing and disposal of the appeal.