2021 (5) TMI 87 - HC - Income Tax

Stay of recovery of demand - Non-payment of disputed arrears of tax - No application for stay of the disputed tax appears to have been filed, either before the Assessing Authority for not being treated as assessee in default in terms of Section 220 (6) of the Act or seeking interim protection before the Administrative/Appellate Commissioner - petitioners have thus approached this Court seeking a mandamus forbearing the respondents from taking coercive action as threatened - HELD THAT - There is no merit in the prayer sought for, insofar as the demand raised in the orders of assessment is, admittedly, payable till such time it is stayed either by the Assessing Authority or by any superior authority. The petitioners have not even filed an application seeking stay. In such circumstances, there is no justification for the prayer sought in these Writ Petitions, and hence the same are dismissed. The petitioners, however, may, if they so desire, approach the appropriate authority seeking interim protection and if any such application seeking interim protection is filed, let the same be disposed in accordance with law and in line with the parameters stipulated in this regard within a period of four (4) weeks from date of receipt of the same.

Summary

Issues:
1. Assessment orders passed under the Income Tax Act, 1961 for multiple Assessment Years.
2. Non-payment of disputed arrears of tax leading to threats of coercive action by the tax authorities.
3. Petition seeking a mandamus to prevent coercive action by the authorities.

Analysis:
1. The petitioners, identified as a Primary Agricultural Cooperative Society, challenged assessment orders for various Assessment Years, which were under appeal before the Commissioner of Income Tax (Appeals). The petitioners had not sought a stay on the disputed tax amounts, as required under Section 220(6) of the Income Tax Act, nor had they applied for interim protection. The court noted that the demand raised in the assessment orders was payable unless stayed by the relevant authority. As the petitioners had not taken necessary steps to seek a stay, the court found no merit in their plea and dismissed the Writ Petitions.

2. Due to the non-payment of the disputed tax arrears, the tax authorities had issued communications threatening coercive action for recovery. The petitioners sought a mandamus to restrain the authorities from taking such action. However, the court held that in the absence of a stay on the demand, there was no basis for granting the requested relief. The court emphasized that the petitioners could approach the appropriate authority for interim protection, and any such application should be dealt with promptly within four weeks in accordance with the law.

3. In conclusion, the court dismissed the Writ Petitions as the petitioners had not followed the necessary procedures to seek a stay on the disputed tax amounts. The court advised the petitioners to approach the relevant authority for interim protection if desired, ensuring that such applications would be processed within a specified timeframe. The judgment did not award any costs to either party, and the connected Miscellaneous Petitions were closed as a result of the final disposal of the Writ Petitions.