J.c.s. Exports, Mumbai v. Income Tax Officer, Ward 26(1)(4), Mumbai & Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO.O.C.J. WRIT PETITION NO. 806 OF 2019 J.C.S. Exports, Mumbai ..Petitioner Versus Income Tax Officer, Ward 26(1)(4), Mumbai & Ors...Respondents ................... Mr. Atul Jasani for the Petitioner Mr. Atul Jasani for the Petitioner Mr. Sham Walve for the RespondentsMr. Sham Walve for the Respondents ................... CORAM : AKIL KURESHI & SARANG V. KOTWAL, JJ. DATE : MARCH 28, 2019. P.C.: 1.Heard learned counsel for the parties for final disposal of the petition. 2.The petitioner has challenged the action of therespondents – Revenue Authorities in forcibly recovering sumof Rs. 60,74,625/- from the bank accounts of the petitioner. 3.Brief facts are as under:- 3.1 The petitioner is a partnership firm and is engagedin the business of import and export. The Assessing OfÏcer passed the order of assessment under Section 143(3) of theIncome Tax Act, 1961 (“the Act” for short) in relation to thepetitioner’s return of income for the assessment year 2016-17 on 28.12.2018. He determined the assessee’s totalincome at Rs. 1.48 crores (rounded of) and raised demand ofRs. 60,65,300/- which included interest under Section 234Band 234C of the Act. The petitioner preferred an appealagainst such order of assessment. Pending such appeal, thepetitioner requested the Assessing OfÏcer to keep thedemand in abeyance. The Assessing OfÏcer passed the order which reads as under:- "2.With reference to the above subject and in response to yourletter, this is to state that your stay application for stay of demand ofRs. 60,65,300/- is hereby rejected because you have not paid 20% ofthe disputed demand. Therefore, you are requested to pay 20% ofthe disputed demand for A.Y. 2016-17 as per Boards Circular dated31st July, 2017, Instruction No. 1914 vide O.M. No. 404/72/93-ITCCdated 29.2.2016. Hence, in this connection, since you have preferredan appeal before the Ld. CIT (A)-38, Mumbai,you are however,required to pay 20% of the disputed demand.letter, this is to state that your stay application for stay of demand ofRs. 60,65,300/- is hereby rejected because you have not paid 20% ofthe disputed demand. Therefore, you are requested to pay 20% ofthe disputed demand for A.Y. 2016-17 as per Boards Circular dated31st July, 2017, Instruction No. 1914 vide O.M. No. 404/72/93-ITCCdated 29.2.2016. Hence, in this connection, since you have preferredan appeal before the Ld. CIT (A)-38, Mumbai,you are however,required to pay 20% of the disputed demand. 3.Thus, your stay of demand application is rejected forthwith andyou are requested to pay 20% of the demand immediately afterreceipt of this letter."you are requested to pay 20% of the demand immediately afterreceipt of this letter." 4.The language of this order is some what self contradictory, however, reading the order as a whole would indicate that the Assessing OfÏcer required the petitioner todeposit 20% of the demand in order to enjoy the stay againstrecovery of rest of the demand. 5.Strangely, on that very date, the Assessing OfÏcer alsoattached the petitioner’s bank accounts. This order dated25.2.2019 was served on the petitioner only on 5.3.2019.Promptly on 6.3.2019, the petitioner wrote to the AssessingOfÏcer requesting him to recover 20% of the demand from itsbank account in Union Bank of India and release theattachment on the bank accounts. On 8.3.2019, thepetitioner again wrote to the Joint Commissioner of IncomeTax and reiterated this request. Strangely on 8.3.2019, theAssessing OfÏcer withdrew the entire amount of Rs.60,74,625/- from the petitioner’s bank accounts. 6.The action of the Authorities cannot be sustained. Thefacts are eloquent. The Assessing OfÏcer required thepetitioner to deposit 20% of the tax to enable the petitionerto avoid recovery of the rest of the amount pending appeal.On the same date, he passed this order, attached the 6.The action of the Authorities cannot be sustained. Thefacts are eloquent. The Assessing OfÏcer required thepetitioner to deposit 20% of the tax to enable the petitionerto avoid recovery of the rest of the amount pending appeal.On the same date, he passed this order, attached the petitioner’s bank accounts thereby making impossible for thepetitioner to fulfill this condition. The petitioner immediatelyupon service of this order communicated to the AssessingOfÏcer that he is not averse to deposit 20% of the disputedamount, however, since the bank accounts are underattachment, the Assessing OfÏcer may withdraw thecorresponding sum form the bank account indicted by thepetitioner. Instead of doing so, the Assessing OfÏcerwithdrew the entire tax demand and a small sum over andabove the said amount through the petitioner’s bankaccounts. Under no circumstances, the Assessing OfÏcercould have acted in such high handed manner. He shallforthwith refund the amount minus 20% of the disputed sum.This shall be done without any delay whatsoever. 7.The petition is disposed of accordingly. [ SARANG V. KOTWAL, J. ] [ AKIL KURESHI, J ]