2020 (3) TMI 1174 - HC - Income Tax

Stay petition - recovery proceedings - Freezing of bank account - petitioner's appeal is pending before the Commissioner of Income Tax (Appeals) and the petitioner was required to deposit 20% of the outstanding amount - HELD THAT - As stated that applications were preferred on 10/2/2020 and 28/2/2020 informing the Commissioner of Income Tax that 20% of the outstanding demand has already been recovered by the Department and, therefore, the other bank accounts may not be freezed. Respondent Department has fairly stated before this Court that some breathing time be granted to the Department to decide the applications preferred in the matter. Resultantly, the present petition is disposed of with a direction to the respondent Department to pass appropriate order keeping in view the amount already recovered and the outstanding amount which is outstanding against the petitioner. The Commissioner shall decide the aforesaid applications by taking into account the CBDT Circular dated 29/2/2016 and 31/7/2017 within a period of 3 days from the date of receipt of certified copy of this order.

Summary

Issues:
Petitioner challenging notice by DCIT/ACIT regarding bank accounts freeze pending appeal deposit; Argument on already recovered 20% outstanding demand; Department seeking time to decide on applications; Court's direction to Department to pass appropriate order considering recovered amount and outstanding demand; Commissioner to decide applications within 3 days as per CBDT Circular.

Analysis:
The case involves a writ petition filed by a cooperative society, aggrieved by a notice issued by the DCIT/ACIT regarding freezing of bank accounts. The petitioner's appeal is pending before the Commissioner of Income Tax (Appeals), with a requirement to deposit 20% of the outstanding amount. The petitioner argued that 20% of the demand has already been recovered by the Income Tax Department, questioning the need to freeze additional bank accounts. Applications were submitted to inform the Commissioner about the recovery, urging against further freezing of accounts.

During the proceedings, the petitioner's counsel highlighted the Department's recovery of the 20% outstanding demand and the redundancy of freezing more accounts. The respondent Department, through its counsel, requested time to evaluate the applications submitted in the matter. Consequently, the Court disposed of the petition with a directive to the Department to make a decision considering the recovered amount and the remaining outstanding sum against the petitioner.

The Court instructed the Commissioner to review the applications within three days of receiving a certified copy of the order, emphasizing adherence to CBDT Circulars issued on 29/2/2016 and 31/7/2017. By issuing this direction, the Court ensured a prompt resolution of the matter, balancing the interests of both parties involved. The judgment aimed to provide clarity and efficiency in handling the dispute, emphasizing compliance with relevant guidelines and timelines for decision-making.