2013 (6) TMI 307 - HC - Income Tax

Stay - recovery - held that - the bank accounts of the petitioner have been attached - it appropriate to direct the second respondent to dispose of the appeal, filed by the petitioner, on merits and in accordance with law, within a period of eight weeks from the date of receipt of a copy of this order.

Summary

Issues:
Challenging notices under Section 226(3) of the Income Tax Act, 1961 and direction to dispose of application under Section 220(6) pending appeal.

Analysis:
The writ petition was filed to challenge the notices dated 21.2.2012 issued by the first respondent under Section 226(3) of the Income Tax Act, 1961. The petitioner also sought a direction to direct the second respondent to dispose of the application filed by the assessee under Section 220(6) of the Income Tax Act, 1961, which was pending disposal of the appeal filed by the assessee. The impugned notices stated that a significant sum was due from the petitioner on account of income tax, penalty, interest, and fine, requiring the banks concerned to pay the said amount to the first respondent as per Section 226(3) of the Income Tax Act, 1961. It was mentioned that these notices would have the same effect as an attachment of debt under Section 222 of the Income Tax Act, 1961.

The petitioner disputed the amount claimed to be due and highlighted that it was subject to an appeal pending with the second respondent. Despite this, recovery proceedings had been initiated against the petitioner, causing severe hardship. On the other hand, the respondents argued that a substantial amount was indeed due from the petitioner as arrears of income tax, and the impugned notices were issued to safeguard the interest of revenue. They suggested that the petitioner should be directed to pay a substantial amount as a pre-condition for the disposal of the appeal pending with the second respondent.

Considering the arguments presented by both parties, the Court decided to direct the second respondent to dispose of the appeal filed by the petitioner within eight weeks from the date of the order. It was clarified that the Court did not express any opinion on the merits of the case. The writ petition was disposed of with the aforementioned directions, and no costs were imposed. Consequently, all connected miscellaneous petitions were closed.