2016 (7) TMI 752 - HC - Income Tax

Stay application - recovery of tax - demand issued consequent to the assessment orders passed for the two assessment years 2012-13 and 2013-14 were stayed subject to petitioners paying 15% of the demand raised in each of the two assessment years as a condition precedent - Held that - As in the present facts, the ends of justice would be met if the petitioner files an application with the Principal Commissioner of Income Tax / Commissioner of the Income Tax within a period of one week from today seeking a review of the order dated 6th April, 2016 passed by the Assessing Officer. Needless to state that if such an application is made for review by the petitioners, the Principal Commissioner of Income Tax / Commissioner of Income Tax would consider and dispose it in accordance with the parameters as laid down by this Court in KEC International Ltd. (2001 (3) TMI 32 - BOMBAY High Court ) for disposing applications for stay. Further, in case the petitioner files its applications for review of the two orders dated 6th April, 2016 before the Commissioner of Income Tax within a period of one week from today, the Officers of the Revenue will not act further upon the Notices issued under Section 226(3) of the Act to the petitioners bankers till such time as the Commissioner of Income Tax disposes the petitioners applications and for a further period of two weeks from the receipt of the orders of the Commissioner of Income Tax by the petitioner. However, it is made clear that though the attachment of the petitioners Bank Accounts made by the Notices dated 8th June, 2016 would continue, the Revenue is restrained from acting further consequent to the attachment i.e. withdrawing the amounts and / or giving any further directions in respect of the frozen / attached account.

Summary

Issues:
Challenge to orders rejecting application for stay in respect of Assessment Years 2012-13 and 2013-14 under Section 220(6) of the Income Tax Act, 1961.

Analysis:
The judgment deals with two petitions challenging orders rejecting stay applications for Assessment Years 2012-13 and 2013-14 under Section 220(6) of the Income Tax Act, 1961. The petitioners had filed appeals before the Commissioner of Income Tax (Appeal) [CIT(A)], which were pending disposal, and sought to stay the demand until the appeal's resolution. The impugned orders directed the petitioners to pay 15% of the demands raised for each year as a condition for stay until the CIT(A) disposes of the appeals. The petitioners did not seek a review of the orders, leading to the attachment of their bank account. The court noted that the orders did not follow the parameters set in previous judgments and emphasized the Revenue's obligation to consider stay applications independently. Despite this, the court did not disturb the orders or the attachment notices due to the petitioners' inaction.

The judgment highlighted that the CBDT's instructions allowed aggrieved parties to seek a review of the Assessing Officer's decision by approaching the Principal Commissioner of Income Tax / Commissioner of Tax. To address the situation, the court instructed the petitioners to file an application for review within a week, emphasizing that the Principal Commissioner of Income Tax / Commissioner of Income Tax should consider and dispose of it according to established parameters. If the petitioners file review applications within the stipulated time frame, the Revenue was restrained from further action on the bank account attachments until the Commissioner of Income Tax resolves the matter and for an additional two weeks thereafter. However, it was clarified that the attachment of the bank accounts would continue, but the Revenue was prohibited from taking any further action post-attachment.

In conclusion, the court disposed of both writ petitions with the directive for the petitioners to file review applications within a week, ensuring the Revenue refrains from further bank account actions pending the Commissioner of Income Tax's decision and for an additional two weeks thereafter. No costs were awarded in this matter.