2018 (4) TMI 456 - HC - Income Tax

Notice issued u/s 226 (3) - notice addressed to the petitioner s bankers stating that the petitioner is due and payable being the income tax for the AY 2018-19 - Held that - The petitioner has to be partly blamed, because, while remitting the further advance tax of ₹ 30,00,000/- he ought to have filed Form 28 A. In any event, as on date, Form 28 A has been filed before the first respondent. Therefore, the said Form 28 A should be considered by the first respondent and decision be taken on merits and in accordance with law. However, in the meantime, the question of recovery of ₹ 96,41,650/- by attaching the petitioner s bank account does not arise and the notice under Section 226(3) dated 26.03.2018 should remain suspended. Writ Petition is disposed of, by directing the first respondent to consider the petitioner s Form 28 A, being the intimation to the Assessing Officer under Section 210 (5), regarding the notice of demand issued under Section 156 of the Income Tax Act, 1961, dated 09.02.2018 and pass appropriate orders on merits

Issues:
1. Notice issued under Section 226(3) of the Income Tax Act, 1961 for recovery of tax.
2. Failure to file Form 28 A along with the advance tax payment.
3. Dispute regarding the amount of advance tax paid and the subsequent notice issued.

Issue 1: Notice issued under Section 226(3) of the Income Tax Act, 1961 for recovery of tax

The petitioner was aggrieved by a notice issued under Section 226(3) of the Income Tax Act, 1961, by the first respondent to the petitioner's bankers, stating a due amount of ?96,41,650 as income tax for the AY 2018-19. The petitioner had paid further advance tax but had not filed Form 28 A as required by the notice. The court observed that the first respondent was justified in issuing the notice for recovery based on the non-filing of Form 28 A initially. However, the petitioner later filed Form 28 A, which should be considered by the first respondent before any recovery action is taken.

Issue 2: Failure to file Form 28 A along with the advance tax payment

The petitioner had remitted an excess amount of advance tax and mentioned this in Form 28 A. The petitioner's counsel argued that the failure to file Form 28 A along with the initial payment of ?30,00,000 was a mistake on the petitioner's part. The court acknowledged the petitioner's error but emphasized that the subsequent filing of Form 28 A should be taken into consideration before any recovery action is pursued.

Issue 3: Dispute regarding the amount of advance tax paid and the subsequent notice issued

The petitioner contended that the excess advance tax remitted should be considered, while the Revenue's counsel argued that the failure to file Form 28 A initially justified the issuance of the recovery notice. The court held that the petitioner should not be faulted entirely, as Form 28 A was eventually filed. It directed the first respondent to consider Form 28 A, pass appropriate orders, and afford a personal hearing to the petitioner's Authorized Representative. The court suspended the recovery notice until a decision is made based on the Form 28 A, ensuring that the recovery of ?96,41,650 by attaching the petitioner's bank account does not proceed.

In conclusion, the High Court directed the first respondent to review the petitioner's Form 28 A, make a decision based on merits and the law, and provide a personal hearing to the petitioner's Authorized Representative. The recovery notice was suspended until a decision is reached, ensuring fair consideration of the advance tax payment and Form 28 A filing.

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