2014 (4) TMI 320 - HC - Income Tax

Pending appeal with CIT(A) - Scope of section 10 (26AAB) Held that - The income tax authorities should give some time to the assessee to approach the appellate authorities and seek interim order - the Court cannot be oblivious of the provisions which enables the Revenue to reduce the period if the circumstances so warrant - The CIT(A) before whom the assessee s appeal is pending should decide the matter at his earliest convenience Decided in favour of Assessee.

Summary

Issues: Assessment under Section 10 (26AAB) of the Income Tax Act disregarding provisions of Agricultural produce Marketing Regulation Act, 1998; Arbitrary attachment and appropriation of funds before appeal; Reduction of appeal period under Section 220 (i) proviso.

Analysis:
The petitioner, a committee under the Agricultural produce Marketing Regulation Act, 1998, challenges the assessment under Section 10 (26AAB) of the Income Tax Act, contending that the Assessing Officer disregarded the provisions of the Agricultural produce Marketing Regulation Act, 1998, leading to the assessment of the entire income. The petitioner argues that the attachment and appropriation of funds towards tax demands, amounting to Rs. 1,95,18,960/-, before the appeal process was arbitrary, especially when the appeal was in contemplation. The petitioner's counsel highlights the hasty nature of the attachment, which occurred before the appeal was even filed, despite a notice period mentioned in the demand notice under Section 156.

The respondent justifies the reduced appeal period for attachment under specific orders of the Deputy Commissioner of Income Tax, permitted by the proviso to Section 220 (i). The respondent argues that since the petitioner had not yet preferred the appeal, the attachment cannot be deemed illegal. The Court acknowledges the authority of the Revenue to reduce the appeal period based on circumstances, despite the general principle that the assessee should be given time to approach appellate authorities and seek interim relief.

The Court opines that the Commissioner of Appeals, where the petitioner's appeal is pending, should expedite the decision-making process and resolve the matter within three weeks. The judgment disposes of the writ petition with the directive for the Commissioner to decide promptly, ensuring that all rights and contentions of the parties remain open. The order is issued for immediate action.