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2020 (3) TMI 973 - HC - Income TaxStay petition - recovery proceedings - calling upon the Petitioner to pay 20% of the demand as a pre-condition for stay of the demand; failing which it was stated that the demand would be enforced and coercive measures would be taken to recover the demand - HELD THAT - We find that Respondent No. 1 while passing the impugned order dated 31.01.2020 did not at all consider the various issues raised by the Petitioner in his stay application and merely called upon the Petitioner to pay 20% of the demand. This court in UTI Mutual Fund 2012 (3) TMI 333 - BOMBAY HIGH COURT has made it abundantly clear that the assessing authority while considering the stay application has to act as a quasi judicial authority, which means that he has to apply his mind to all relevant factors and thereafter, take a decision which is just, fair and reasonable. This court had highlighted that though the Assessing Officer had made the assessment, nonetheless at the time of deciding stay of the demand, he must objectively decide the application for stay considering that an appeal lies against the order which in fact has been filed in the present case. Order dated 31.01.2020 is devoid of any reasons which reflects non-application of mind and therefore, cannot be sustained. Consequentially, the action of attaching the bank account of the Petitioner in the HDFC Bank, Chembur, Mumbai cannot also be justified. Accordingly, the impugned order dated 31.01.2020 is hereby set aside and quashed. Further, the attachment of the bank account of the Petitioner being Account No. 4251570000839 in HDFC Bank, Chembur, Mumbai, is also set aside.
Issues:
Assessment order legality and correctness, demand for payment, stay application rejection, coercive measures, guidelines for revenue authorities, quasi-judicial authority duties, lack of reasoning in order, bank account attachment, judicial intervention, fresh consideration of stay application. Assessment Order Legality and Correctness: The Petitioner challenged the legality and correctness of the assessment order dated 31.01.2020 by the Income Tax Officer, which demanded payment of 20% of the assessed amount as a pre-condition for stay of the demand. The assessment order was based on the Petitioner's failure to disclose income from the sale of agricultural land, resulting in the addition of the sale transaction amount to the Petitioner's income under section 69-A of the Income Tax Act, 1961. Rejection of Stay Application and Coercive Measures: The Petitioner, a senior citizen, filed a stay application due to health issues, financial constraints, and inability to operate his bank account under moratorium. The Respondent rejected the stay application and initiated coercive steps by attaching the Petitioner's bank account without providing reasonable prior notice, leading to the withdrawal of the entire balance. Guidelines for Revenue Authorities and Quasi-Judicial Authority Duties: The Court referred to guidelines established in previous cases for revenue authorities to follow when considering applications for stay of demand. These guidelines emphasized the need for a quasi-judicial approach, balancing the interests of the assessee with the protection of revenue, and considering all relevant factors before making a decision. Lack of Reasoning in Order and Judicial Intervention: The Court found that the impugned order lacked reasoning and reflected a non-application of mind by the assessing authority. As per previous judgments, the assessing officer must objectively decide on stay applications, considering that an appeal lies against the order. The Court intervened, setting aside the order dated 31.01.2020 and the attachment of the Petitioner's bank account. Fresh Consideration of Stay Application: The Court remanded the matter back to the assessing authority for a fresh consideration of the stay application, directing a decision within six weeks without taking coercive steps against the Petitioner. The attached bank account was ordered to be de-attached to enable the Petitioner to operate it. Conclusion: The Court disposed of the writ petition, setting aside the impugned orders and attachments, emphasizing the need for a fair and reasoned consideration of the stay application in accordance with the law and established guidelines.
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