2020 (4) TMI 763 - HC - Income Tax

Stay petition - recovery proceedings - petitioners submits that, since the petitioners are retired, they are facing undue hardship by reason of the notice of recovery issued by the revenue authorities - revenue authorities have received a sum in excess of ₹ 2 lakhs already from the bank account of the petitioner while the amount of demand is ₹ 10 lakhs - HELD THAT - The amount of demand of the revenue authorities therein is a sum in excess of ₹ 12 lakhs. There subsists an order dated March 20, 2020 passed by the Hon ble Supreme Court directing the revenue authorities not to initiate any recovery proceedings during the subsistence of the COVID-19 pandemic - interest of justice would be subserved by directing the banks of the petitioners to allow the petitioners to operate the bank accounts subject to the bankers of the petitioner setting apart a sum of ₹ 5 lakhs. Such sum of ₹ 5 lakhs, the Court is informed, is lying in one of the bank accounts of such petitioner. Such banker will keep a sum of ₹ 5 lakhs in a separate interest bearing fixed deposit account with it. Such deposit will abide by the result of the appeal of such petitioner. The bankers of the petitioner of such petition thereafter will permit the petitioner to operate his bank accounts in accordance with law. There will be stay of the order of attachment of the bank accounts subject to compliance of the aforementioned conditions. So far as the other writ petitioner a sum of ₹ 2 lakhs has already been paid by the banker of such petitioner to the revenue authorities, it would be appropriate to permit such petitioner to operate his bank account. The order of attachment issued by the revenue authorities against such bank account of the petitioner is stayed.

Issues:
1. Order of assessment by Income Tax Authorities against retired personnel.
2. Undue hardship faced by retired personnel due to notice of recovery.
3. Stay petitions filed by the writ petitioners.
4. Directions sought by the petitioners regarding operating bank accounts.
5. Compliance with Supreme Court order during COVID-19 pandemic.
6. Stay of attachment orders on bank accounts.
7. Clarification on measures taken due to COVID-19 pandemic.
8. Instructions for the appellate authority to decide the appeals promptly.
9. Listing of writ petitions before the appropriate Bench.

Analysis:
1. The judgment involves two writ petitions concerning retired personnel, one from the police department and the other from the education sector, who are facing an order of assessment by the Income Tax Authorities. Both petitioners have filed individual appeals against the assessment, with pending stay petitions awaiting a decision by the appellate authority.

2. The petitioners, being retired, are experiencing undue hardship due to the notice of recovery issued by the revenue authorities. The advocate for the petitioners argues that appeals against assessment orders are typically admitted based on a percentage of the revenue demanded. One petitioner has already had over ?2 lakhs deducted from their bank account, while the other petitioner is yet to have any amount recovered from their accounts, with the revenue authorities demanding sums exceeding ?10 lakhs and ?12 lakhs, respectively.

3. Considering the impact of the COVID-19 pandemic, a previous Supreme Court order dated March 20, 2020, directed the revenue authorities not to initiate recovery proceedings during this period. To address the situation, the court directs the banks of the petitioners to allow them to operate their accounts, subject to certain conditions.

4. In the case of one petitioner, the bank is instructed to set aside ?5 lakhs in an interest-bearing fixed deposit account, pending the appeal's outcome. The petitioner can then operate the account in compliance with the law, with a stay on the attachment order.

5. For the other petitioner, who has already paid ?2 lakhs to the revenue authorities, the court deems it appropriate to allow them to operate their bank account, thereby staying the attachment order issued by the revenue authorities.

6. The court emphasizes that these measures are implemented due to the ongoing COVID-19 pandemic and that none of the observations made should prejudice any party in the appeal process. The appellate authority is urged to decide on the appeals promptly and in accordance with the law.

7. Finally, the judgment instructs to list both writ petitions before the appropriate Bench once normal court operations resume and advises the parties to act based on a server copy of the order for compliance.

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