2023 (8) TMI 723 - HC - Income Tax

Stay of petition - recovery proceedings - high pitched assessments - HELD THAT - In the instant case, since the appeals were filed in 2018 and the stay applications filed before the Deputy Commissioner of Income Tax during the year 2018 followed by subsequent reminders, were rejected only on 8th December, 2022 and the assessments orders were not given effect to till date, we are of the view that the appeals filed before the CIT (Appeals) could be disposed of at an early date and until then, the respondents/department should not take any coercive action against the appellant / assessee for recovery of the income tax, which has been assessed. See Great Barter Private Limited Vs. Assistant Commissioner of Income Tax 2022 (12) TMI 1432 - CALCUTTA HIGH COURT These appeals are allowed and the orders passed in the writ petitions are set aside with a direction to keep the recovery proceedings initiated by AO in abeyance with a further direction to the CIT (A) to dispose of the appeal petitions filed by the assessee on merits and in accordance with law after affording an opportunity of personal hearing to the authorised representative of the assessee as expeditiously as possible, preferably within a period of 45 days from the date of receipt of the server copy of this judgment and order.

Summary

Issues: Dismissal of writ petitions on grounds of belated filing, condonation of delay in filing appeals, granting interim stay of assessments, disposal of appeals before Commissioner of Income Tax (Appeals).

Analysis:
1. Dismissal of Writ Petitions: The appeals were filed against orders passed by the Single Bench in W.P.A. No.11284 of 2021, W.P.A. No.11281 of 2021, and W.P.A. No.11272 of 2021 questioning assessment orders under Section 143(3) of the Income Tax Act, 1961. The Single Bench dismissed the writ petitions as belated, as stay applications were filed before the assessing officer in September 2018. The appellant challenged this dismissal before the High Court.

2. Condonation of Delay: There was a delay of 166 days in filing the appeals, which the appellant sought to condone. The High Court found sufficient cause for the delay and thus condoned it, allowing the appeals to be heard on their merits.

3. Granting Interim Stay: The High Court noted that the assessments in question were high-pitched assessments completed in 2017-2018 for the assessment years 2011-12, 2012-13, and 2016-17. The appellant had filed statutory appeals before the Commissioner of Income Tax (Appeals) within the limitation period, and these appeals were pending since 2018. The Court observed that during the pendency of the appeals, giving effect to the assessment orders might cause prejudice. Therefore, it directed that no coercive action be taken against the appellant for recovery of the assessed tax until the appeals were disposed of.

4. Disposal of Appeals: The High Court referenced a similar case where the Court had directed that recovery notices remain stayed until the disposal of appeals, especially in cases of unreasonably high-pitched assessments. In line with this precedent, the High Court allowed the appeals, setting aside the orders of the writ petitions. The Court directed the Commissioner of Income Tax (Appeals) to dispose of the appeals on merits and in accordance with the law within 45 days from the receipt of the judgment and order copy.

5. Final Directions: The High Court clarified that it did not delve into the merits of the matters and left it open for the assessee to present all factual and legal issues before the Commissioner of Income Tax (Appeals). The Court ordered no costs to be paid and instructed that certified copies of the order be provided to the parties promptly upon compliance with legal formalities.

In conclusion, the High Court allowed the appeals, set aside the writ petition orders, directed the stay of recovery proceedings, and instructed the expeditious disposal of appeals before the Commissioner of Income Tax (Appeals).