2024 (9) TMI 1132 - HC - Income Tax

Failure on the part of the respondents to examine petition for stay pending disposal of its appeal before CIT(A) - HELD THAT - PCIT has clearly failed to formally pass an order on the application dated 02 September 2023. Though needless to state, we may only observe that a mere noting on the order sheet is not an order which can possibly be countenanced in law. We, consequently, and at this stage, dispose of the writ petition requiring the PCIT to formally take up the application dated 02 September 2023 and dispose of the same within a period of one week from today. PCIT, while considering the said application, shall also bear in mind the principles which have been enunciated by us in National Association Of Software And Services Companies (NASSCOM) 2024 (3) TMI 773 - DELHI HIGH COURT All other rights and contentions of respective parties on merits are kept open.

Summary

Issues:
Failure to examine petition for stay pending disposal of appeal before Commissioner of Income Tax (Appeals), dispute regarding Assessment Years 2015-16 and 2017-18, disposal of application under Section 220(6) of the Income Tax Act, 1961, petitioner's approach to Principal Commissioner of Income Tax, delay in disposal of application, failure of Principal Commissioner of Income Tax to pass a formal order, directive to Income Tax Officer, legality of continued attachment of bank account.

Analysis:
The petitioner approached the court seeking various reliefs, including quashing a notice and order issued under the Income Tax Act, directing a refund with interest, prohibiting coercive actions, expediting applications and appeals, and any other necessary orders. The main grievance was the failure of the respondents to consider the petition for stay pending the disposal of the appeal before the Commissioner of Income Tax (Appeals).

The dispute revolved around the Assessment Years 2015-16 and 2017-18. The Assessing Officer had disposed of the application for stay of demand, requiring the petitioner to deposit 20% of the demand for those years. Subsequently, the petitioner approached the Principal Commissioner of Income Tax as per the Central Board of Direct Taxes Office Memorandum. However, the application remained unaddressed despite being made in September 2023.

The respondents claimed that the Principal Commissioner of Income Tax had advised the Income Tax Officer to proceed based on the previous order. The court noted that a mere noting on the order sheet was insufficient and directed the Principal Commissioner of Income Tax to formally address the application within a week, considering the principles established in a previous case.

The court kept all other rights and contentions open for both parties. Additionally, the Principal Commissioner of Income Tax was instructed to evaluate the justification for the continued attachment of the petitioner's bank account while examining the application from September 2023.