2019 (4) TMI 58 - HC - Income Tax

Stay petition - steps for recovery of the outstanding tax - HELD THAT - The petitioner has challenged the order passed by the appellate authority before the ITAT, Lucknow which is pending. The petitioner has also moved an application for interim relief before the learned Tribunal which is also pending. The petitioner had deposited 20% of the assessed tax while filing the appeal before the CIT, however, the opposite parties in most arbitrary manner have seized the bank accounts of the petitioner, as such, the petitioner has been put to great hardship. As submitted that the opposite parties have already taken away an amount to the tune of ₹ 53,33,55,784/- from the bank accounts of the petitioner. Opposite parties submits that 20% of the assessed tax was required to be paid at the appellate stage. The appeal preferred by the petitioner has been dismissed and now the matter is before the learned Tribunal. No interim protection has been granted by the learned Tribunal, as such, the opposite parties are fully empowered to take appropriate steps for recovery of the outstanding tax. It is undisputed that the matter is pending before the Income Tax Appellate Tribunal and the stay application is also pending. The matter is listed for 19.3.2019. Since the application for interim relief is pending consideration before the learned Tribunal, as such, till disposal of stay application, the opposite parties shall not take any coercive measures including seizing of the bank accounts of the petitioner. The opposite parties shall, therefore, release the bank accounts of the petitioner forthwith.

Summary

Issues:
1. Dismissal of appeal by CIT (A) against assessment order for 2014-15 and 2015-16.
2. Seizure of petitioner's bank accounts by opposite parties.
3. Disputed amount seized from petitioner's bank accounts.
4. Pending appeal before Income Tax Appellate Tribunal.
5. Application for interim relief before the Tribunal.
6. Opposite parties' justification for seizing bank accounts.
7. Decision of the High Court regarding coercive measures.

Analysis:
1. The petitioner's appeal against the assessment order for the years 2014-15 and 2015-16 was dismissed by the CIT (A), leading to a further challenge before the Income Tax Appellate Tribunal, Lucknow, which is currently pending. The petitioner had paid 20% of the assessed tax while filing the appeal before the CIT.

2. The opposite parties, in an alleged arbitrary manner, seized the bank accounts of the petitioner, causing significant hardship. An amount of ?53,33,55,784 was already taken from the petitioner's accounts, prompting the petitioner to seek relief from the High Court.

3. The counsel for the opposite parties argued that since the appeal was dismissed and no interim protection was granted by the Tribunal, they had the authority to take steps for recovering the outstanding tax, including seizing the bank accounts.

4. The High Court acknowledged that the matter was pending before the Income Tax Appellate Tribunal, with a stay application also pending and listed for a future date. Considering the pending application for interim relief, the High Court directed that no coercive measures, including bank account seizures, should be taken by the opposite parties until the stay application was resolved.

5. Therefore, the High Court ordered the immediate release of the petitioner's bank accounts by the opposite parties until the disposal of the stay application. The writ petition was disposed of with these observations, providing temporary relief to the petitioner pending the Tribunal's decision on the stay application.