2019 (4) TMI 627 - HC - Income Tax

Recovery of demand - order passed u/s 201 - stay rejected by AO - petitioner s bank accounts are attached and garnishee orders are served - right to approach the CIT or Chief CIT - HELD THAT - the petition is disposed of with following directions - (i) The petitioner shall file a stay petition before the Chief CIT (TDS) within a period of seven days from today. (ii) If such stay petition is filed within the time permitted, said Authority may dispose of the same as expeditiously as possible. (iii) For a period of ten days after the date of communication of the order of Chief Commissioner passes, there shall be no coercive recoveries against the petitioner in connection with this issue. (iv) In the meantime, since we have prevented further coercive recoveries, the attachment of the bank accounts of the petitioner as well as garnishee orders stand lifted.

Summary

Issues:
Coercive recovery by Revenue Authorities pending appeal under Section 201 of the Income Tax Act, 1961.

Analysis:
The petitioner is facing coercive recovery initiated by the Revenue Authorities due to tax dues arising from an order under Section 201 of the Income Tax Act, 1961. The petitioner had filed an appeal against the order and requested the Assessing Officer to keep the demand in abeyance, but the request was rejected. Consequently, the petitioner's bank accounts were attached, and garnishee orders were served on creditors. The petitioner approached the High Court seeking relief.

Against the decision of the Assessing Officer on the stay petition, it was highlighted that the petitioner has the right to approach the Commissioner of Income Tax or Chief Commissioner of Income Tax for suspension of demand pending appeal. The High Court noted that the Revenue Authorities acted swiftly, causing adverse effects on the petitioner's business and making recoveries without the petitioner's consent. The Assessing Officer provided a very short period for the petitioner to take legal steps, prompting the High Court to intervene.

At the High Court's request, the learned counsel for the Revenue consulted the Revenue Authorities, leading to directions for the petitioner. The High Court directed the petitioner to file a stay petition before the Chief Commissioner of Income Tax (TDS) within seven days. The Chief Commissioner was instructed to dispose of the petition promptly. Additionally, a ten-day period without coercive recoveries was granted after the Chief Commissioner's order. As a result of preventing further coercive recoveries, the attachment of the petitioner's bank accounts and garnishee orders were lifted.

In conclusion, the High Court's judgment provided relief to the petitioner by allowing the filing of a stay petition before the Chief Commissioner of Income Tax and halting coercive recoveries for a specified period. The judgment aimed to balance the interests of the petitioner and the Revenue Authorities while ensuring a fair process during the appeal proceedings.