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TMI Blog2022 (5) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... judication before the Commissioner of Income Tax (Appeals); c. to impose the exemplary costs on Respondent No. 1 for carrying out a blatantly illegal recovery of tax against the accepted principles of reasonableness, judicial discipline and law. d. by awarding the cost of writ petition in favour of the petitioner; e. any other order, relief or direction, which this Hon'ble High Court may deem fit & proper be passed in favour of the Petitioner; 2. Facts of the case as borne out from record of the writ petition are that on 13/12/2019 one Assessment Order was passed by the respondent no.1-Assessment Officer (hereinafter referred to as 'AO') under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'IT Act') for the Assessment Year 2017-18 and a demand of Rs.2,09,44,100/- was raised under Section 156 of the IT Act as specified vide Annexure-2 & 3 against which the petitioner-assessee filed an appeal (Annexure-5) under Section 246 of the IT Act on 26/12/2019 in the prescribed form submitting that he has a prima-facie case and the demand raised is not maintainable. 2.1 On 13/01/2020, Income Tax Return for the Assessment Year 2018-2019 pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the IT Act. He further submitted that giving go-bye to the departmental circulars, settled position of law, principles of natural justice, statutory mandate and the provisions of Section 245 of the IT Act, set up of refund was made suo-motu and the act of the department was high handed and autocratic without authority of law and as such, he has filed the present writ petition for violation of his fundamental rights, principles of natural justice and recovery being violative of Article 265 of the Constitution of India. 5. Per-contra, Mr. Anuroop Singhi, learned Standing Counsel for the respondent-Revenue submitted that it is true that against the impugned order passed under Section 143(3) of the IT Act for the Assessment Year 2017-18, on 13/12/2019 a demand of Rs.2,09,44,100/- was raised under Section 156 of the IT Act against the addition of Rs.2,51,98,421/- on 13/12/2019. The petitioner-assessee filed an appeal on 26/12/2019 which is pending adjudication with the department. He further submitted that no application for waiver of recovery and stay of demand was filed alongwith appeal. He further submitted that it was only on 22/02/2021 that an application under Section 220(6) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h person of the action proposed, is to be served:- 245.Where under any of the provisions of this Act, a refund is found to be due to any person, the Assessing Officer, Deputy Commissioner (Appeals), Commissioner (Appeals) or Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, as the case may be, may, in lieu of payment of the refund, set off the amount to be refunded or any part of that amount, against the sum, if any, remaining payable under this Act by the person to whom the refund is due, after giving an intimation in writing to such person of the action proposed to be taken under this section. (d) In response to the said intimation under Section 245 of the IT Act, the petitioner-assessee filed an application for stay of demand which is reflected in letter dt. 22/01/2020 (Annexure-7). It is also reflected that the petitioner-assessee, in terms of departmental circulars, has voluntarily requested the department for adjustment of 20% of the demand to the tune of Rs.41,88,620/- from the refund and the balance amount to be refunded but it is analyzed that de-hors the provisions of Sections 245, 220(6) of the IT Act the respondents have s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lear that once an appeal is filed within time in the prescribed format, the assessee will not be deemed as an 'assessee in default'. Further, the notice under Section 156 of the IT Act categorically specifies that the demand can only be initiated in the case of default under the provisions of Sections 222, 223 of the IT Act which in the given case is not made out. (g) It is also analyzed by this Court that time and again in catena of judgments of Apex Court as well as various High Courts reported in Commissioner of Cus.& C. Ex. Ahmedabad Vs. Kumar Cotton Mills Pvt. Ltd.: 2005(180) E.L.T. 434 (SC); Larsen & Toubro Limited Vs. The Union of India & Ors.: 2013(288) E.L.T. 481 (Bom.); Manglam Cement Limited Vs. The Superintendent, Central Excise, Range-III, Kota & Ors. (DB Civil Writ Petition No.1891/2013) & connected matters decided by Rajasthan High Court at Jaipur Bench, Jaipur on 01/03/2013; Skyline Engineering Contracts (India) P. Ltd. Vs. Deputy Commissioner of Income-tax: (2021) 132 taxmann.com 158 (Delhi) and Jet Privilege (P.) Ltd. Vs. Deputy Commissioner of Income-tax: (2021) 131 taxmann.com 119 (Bombay), it is held that under Section 245 of the IT Act, the recovery ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of one and half year has initiated recovery from the assessee that too merely at the verge of expiry of 30 days dehors not only the statutory provisions and the judgments of the higher forums but even contrary to its own office memorandum which permits recovery only to the extent of 20%. 7. In Union of India (UOI) & Ors. Vs. Kamlakshi Finance Corporation Ltd.: AIR 1992 SC 711, the Apex Court held as under:- "8. We have dealt with this aspect at some length, because it has been suggested by the learned Additional Solicitor General that the observations made by the High Court, have been harsh on the officers. It is clear that the observations of the High Court, seemingly vehement, and apparently unpalatable to the Revenue, are only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... above as well as the provisions of Section 220(6), 245 of the IT Act and the circulars of the department. The Chief Commissioner of Income Tax, Rajasthan, Jaipur, Udaipur, etc. is directed to apprise about pendency situation and statistics to the Rajasthan State Legal Services Authority, Jaipur so that in the interest of justice, the same can be considered and appropriate correspondences can be made with the higher/appropriate authorities in the larger public interest as illegal recoveries, levy of interest is imposed for the reasons beyond their control. 12. In the case in hand, this Court further deems it appropriate to impose a cost upon the respondents which is quantified to Rs.50,000/- which the respondent-department shall pay itself or if it so chooses, the same may be recovered equally from respondents No.1 & 2 and be deposited with the Rajasthan State Legal Services Authority, Jaipur and assessee in half and half within two months of passing of this order. 13. A copy of this order be sent by the Registry of this Court to the Chairman, Central Board of Direct Taxes (CBDT), Department of Revenue, Ministry of Finance, Government of India, North Block, New Delhi-110001 and R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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