2022 (2) TMI 1473 - HC - Income Tax

Stay petition - Bank Attachment Notices - ex-parte orders - HELD THAT - The petitioner's applications/petitions u/s 220(6) of the Income Tax Act, 1961 have not been disposed in the manner known to law. There are guidelines issued by the Central Board of Direct Taxes starting from 1989 which mandates a speaking order to be passed u/s 220(6) of the Income Tax Act, 1961. The communications/letters dated 03.09.2021 and 17.09.2021 have enclosed in the typed set of papers in support of the present writ petitions indicate that there is no application of mind by the Officer concerned. The impugned Bank Attachment Notices are set a side and the cases are remitted back to the first respondent to pass appropriate orders on merits and in accordance with law on the applications/petitions filed under Section 220(6) of the Income Tax Act, 1961 within a period of four weeks from the date of receipt of a copy of this order. Petitioner shall be given an opportunity of being heard as per the relevant Acts and Rules. The first respondent is also directed to verify whether the orders passed for the Assessment Year 2018-2019 was ex-parte order or not and thereafter pass appropriate orders within the aforesaid period.

Summary

Issues:
Challenge to Bank Attachment Notices based on Assessment Orders and pending appeals before CIT (Appeals); Non-disposal of applications under Section 220(6) of the Income Tax Act, 1961; Allegations of high pitch demand and lack of response due to illness; Failure to challenge certain communications/letters; Requirement of speaking order under Section 220(6) of the Income Tax Act, 1961.

Analysis:
The petitioner contested Bank Attachment Notices linked to Assessment Orders for the years 2017-2018 and 2018-2019, alongside appeals before the CIT (Appeals). The petitioner also sought stays on recovery under Section 220(6) of the Income Tax Act, 1961, citing health issues and discrepancies in turnover versus confirmed amounts in the Assessment Orders. The petitioner argued that the respondents' inaction on the stay applications warranted quashing the Bank Attachment Notices.

The respondents countered by highlighting unchallenged communications related to the Assessment Year 2017-2018 and lack of documentation from the petitioner for the Assessment Year 2018-2019. They contended that the petitioner's failure to challenge specific communications rendered the writ petitions dismissible. The court acknowledged the petitioner's health-related non-participation in prior proceedings, noting the ex-parte nature of the Assessment Orders.

The court emphasized the necessity of deciding the merits of the petitioner's contentions through the pending appeals. It criticized the lack of proper disposal of the Section 220(6) applications, citing the requirement for a speaking order as per Central Board of Direct Taxes guidelines. The court found the communications enclosed with the petitions indicative of a lack of due consideration by the tax officer.

Consequently, the court set aside the Bank Attachment Notices, remitting the cases to the first respondent for appropriate orders within four weeks. The court directed a reevaluation of the Assessment Year 2018-2019 orders and stressed the petitioner's right to a fair hearing. The judgment concluded by disposing of the Writ Petitions without costs and closing associated Miscellaneous Petitions.