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2019 (4) TMI 1482 - HC - Income TaxStay of recovery of the demand - garnishee notices u/s 226 (3) during the pendency of the aforesaid stay application - HELD THAT - As the stay petition filed by the petitioner are pending before the appellate authority and the assessing officer respectively, the interests of both parties will be protected by directing the petitioner to remit a sum of ₹ 25,00,000/- (Rupees twenty five lakhs only) either by appropriation of the amounts lying to its credit in the South Indian Bank, Triplicane Branch/the third respondent herein or by way of fresh remittance, to the satisfaction of the assessing authority. Upon receipt of proof of remittance of the sum of ₹ 25,00,000/- as directed aforesaid, the order of attachment of the petitioners bank account in the South Indian Bank shall stand lifted. The stay application filed by the petitioner, dated 29.01.2019, is pending before the first respondent and the officer is directed to dispose the same within a period of two weeks from today. No further proceedings for recovery shall be taken for a period of three weeks from today.
Issues:
1. Revision of assessment under Section 263 of the Income Tax Act, 1961 2. Denial of deduction under Section 80IB (10) of the Act 3. Application for stay of recovery of demand 4. Issuance of garnishee notices under Section 226 (3) of the Act 5. Interim stay of recovery proceedings Revision of Assessment under Section 263: The petitioner, a Partnership Firm, was initially assessed by the Assistant Commissioner of Income Tax, Non-Corporate Circle - 3, for the assessment year 2012-13. Subsequently, the Principal Commissioner revised the assessment under Section 263 of the Income Tax Act, 1961, on 21.12.2016. The revised assessment resulted in various additions and adjustments, including the denial of the benefit of deduction under Section 80IB (10) claimed by the petitioner. This revision led to a demand of ?2,14,09,400/-. Application for Stay of Recovery: The petitioner filed an application seeking a stay of recovery of the demand, which was pending before the first respondent. Despite the pending stay application, garnishee notices under Section 226 (3) of the Act were issued to the South Indian Bank, Triplicane Branch, and State Bank of India, Kilpauk Branch. The petitioner approached the Court seeking relief from the coercive recovery proceedings. Interim Stay of Recovery Proceedings: During the proceedings, the Senior Standing Counsel for respondents 1 to 3 acknowledged the pendency of the appeal and stay petition before the Commissioner of Income Tax (Appeals) and the assessing officer. The Court, considering the interests of both parties, directed the petitioner to remit ?25,00,000/- either from the credit in the South Indian Bank or through fresh remittance. Upon proof of remittance, the attachment of the petitioner's bank account in the South Indian Bank would be lifted. The Court also instructed the assessing officer to dispose of the stay application within two weeks and ordered no further recovery proceedings for three weeks. Conclusion: The Court disposed of the writ petition by directing the petitioner to remit a specific amount and providing relief from coercive recovery actions. The stay application was to be decided within two weeks, and no recovery proceedings were to take place for three weeks. The judgment concluded without any costs imposed on either party, and the connected matters were closed.
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