Revenue should lift the attachment and ensure that the amounts recovered were deposited back in assessees account within a week from today as interim stay was granted by Tribunal and the attachment proceedings would amount to overreach of the order of Tribunal

DELHI HIGH COURT

A.T. KEARNEY INDIA PVT. LTD. ......................................................................Appellant.
V
INCOME TAX OFFICER .....................................................................................Respondent

MR. S. RAVINDRA BHAT AND MR. R.V.EASWAR, JJ.

Date : March 28, 2014

Appearances

Mr. Salil Kapoor with Mr. Ankit Gupta, Mr. Sanat Kapoor, Mr. Vikas Jain and Mr. S. Varun Gupta, Advocates For the Appellant :
Mr. Sanjeev Sabharwal, Sr. Standing Counsel. For the Respondent :

Section 221 of the Income Tax Act, 1961 — Recovery of tax — Revenue should lift the attachment and ensure that the amounts recovered were deposited back in assessee's account within a week from today as interim stay was granted by Tribunal and the attachment proceedings would amount to overreach of the order of Tribunal

FACTS:

Assessee was in appeal before CIT(A) and lost it. Consequently, Revenue issued notice u/s 221 to the assessee for recovering the amounts due to assessee. Assessee filed a letter wherein he stated that it had preferred and appeal and stay application before Tribunal. Tribunal granted stay to assessee and passed an interim order. Even though the Departmental Representative appeared before Tribunal and order on stay application was pronounced in open court and authorities attached and took away the proceeds of bank account of assessee. Being aggrieved, assessee filed a writ petition.

HELD,

that submission of the revenue that the concerned AO was not intimated cannot be accepted. If such an argument was made before the Court, where orders were pronounced in Court in the presence of counsel, it would certainly not be accepted, and in fact would be seriously viewed. In the facts of this case, it clearly amounts to overreach of the interim order of the Tribunal; in a similar situation, Court itself would possibly be initiating contempt proceedings. In these circumstances, Revenue should lift the attachment and ensure that the amounts recovered were deposited back in assessee's account within a week from today. In the result, petition was answered in favour of assessee.

JUDGMENT

The facts of this case are that the petitioner lost its appeal before the Commissioner of Income Tax (Appeal) on 20.11.2013. The revenue issued notice under Section 221 for determined demand amounts due for the AY 2007-08, which was subject matter of the appeal before the CIT (Appeals). In reply the petitioner concededly filed a letter on 11.02.2014 stating that it had preferred an appeal and stay application to the ITAT. The appeal along with the application for stay was taken up on 14.02.2014 when the Tribunal granted the stay in the following terms:-

"3. We have heard both the sides, considered the material on record and find undisputed fact that 50% of the remaining demand stands paid/ recovered by/ from the assessee for both the years which during the pendency of appeal, the assessee was asked to pay 50% of the demand.

Therefore, in view of the facts and circumstances of the case and material on record, we are of the view that it is a fit case where stay should be granted subject to the condition that assessee should not seek any adjournment and make its every effort to get the appeal concluded as and when fixed and considered for hearing. Therefore, we grant stay of demand for a period of 180 days/ till the disposal of the appeals, whichever is earlier and in case assessee seeks adjournment, accommodation herein granted shall stand vacated without any notice to the assessee."

The petitioner's grievance in the above background of the circumstances is that despite the stay granted by the Tribunal the respondents attached and took away the proceeds of its bank account on19.02.2014. Counsel for the revenue contends that there was no intimation about the stay and that the concerned assessing officer was not present when the Tribunal granted the stay; it was also stated that besides the mere filing of the appeal did not entitle the petitioner to contend that the respondent is barred from proceeding to recover the tax paid.

As is evident from the above discussion, the petitioner's application for stay was granted and the interim order was made for the period of 180 days. On 14.02.2014, we notice that the income tax authorities were represented by Mr. YogeshVerma, CIT-DR, before the Tribunal. The order on the stay application was also pronounced in open Court on that date.

In these circumstances, the submission of the revenue that the concerned assessing officer was not intimated, cannot be accepted. If such an argument was made before this Court, where orders are pronounced in Court in the presence of counsel, it would certainly not be accepted, and in fact would be seriously viewed. In the facts of this case, it clearly amounts to overreach of the interim order of the Tribunal; in a similar situation, this Court itself would possibly be initiating contempt proceedings. In these circumstances, the Court is of the opinion that the respondent should lift the attachment and ensure that the amounts recovered are deposited back in the petitioner's account within a week from today.

The writ petition is allowed in terms of the above directions.