M/S.rapid Care Transcription P. Ltd., Rep.by Its Director: V.venkatasubramanian Old v. The Income Tax Officer Corporate Ward 5(4) Room

The Hon'ble Mr.Justice T.S.Sivagnanam Writ Petition No.33765 of 2017 andW.M.P.Nos.37408 and 37410 of 2017 M/s.Rapid Care Transcription P. Ltd.,Rep.by its Director: V.VenkatasubramanianOld No.21, New No.41, VLV ComplexMount Road, Little Mount, Saidapet,Chennai 600 015....PetitionerVs. The Income Tax OfficerCorporate Ward 5(4)Room No.403, Aayakar BhavanMain Building, No.121, M.G.Road,Nungambakkam, Chennai 600 034....Respondent Writ Petition, filed under Article 226 of the Constitutionof India, for issuance of Writ of Mandamus, forbearing therespondent from proceeding further for the recovery of thebalance amount pursuant to the order, dated 27.10.2017 (servedon the petitioner on 11.12.2017) of the Commissioner of IncomeTax (Appeals)-3, Chennai, confirming the order, dated 23.09.2016passed by the respondent against the petitioner relating to theAssessment Year 2009-2010, which action, was initiated duringthe period and before the expiry of the period of limitation forfiling appeal before the Tribunal prescribed under the IncomeTax Act. Heard Mr.K.Jayachandran, the learned counsel appearingfor the petitioner and Mrs.Hema Muralikrishnan, the learnedSenior Standing Counsel, accepting notice on behalf of therespondent. With consent on either side, the Writ Petition istaken up for disposal. https://hcservices.ecourts.gov.in/hcservices/ 2. The petitioner has filed this Writ Petition, prayingfor issuance of a writ of mandamus, forbearing the respondentfrom proceeding for the recovery of the balance amount, pursuantto the order, dated 27.10.2017. By the said order, dated27.10.2017, the petitioner's Appeal filed before theCommissioner of Income Tax, (Appeals)-3, Chennai, challengingthe order of assessment for the year 2009-10 was dismissed. Asagainst the said order, the petitioner has an alternate remedyof filing an Appeal before Income Tax Appellate Tribunal (ITAT)and the period of limitation is 60 days, under Section 253 ofthe Income Tax Act, 1961 (hereinafter, referred to as 'theAct'), and the period of limitation of 60 days would commencefrom the date of receipt of copy of the order appealed against. 3. From the postal cover, by which, the petitioner wascommunicated the impugned order, it is seen that, the same wasdespatched from the office of the Commissioner of Income Tax(Appeals)-3 on 09.12.2017, and the petitioner has received thesame on 11.12.2017, (as could be seen from the seal affixed onthe reverse of the cover). Therefore, the period of limitationshall commence from 12.12.2017, i.e., excluding the date, onwhich, the impugned order was received by the petitioner.However, much before the expiry of the 60 days limitationperiod, the respondent has issued a notice under Section 226(3)(iii) of the Act directly to the petitioner's bank, and attachedtwo of their bank accounts, bearing current AccountNo.50200027946055, for a sum of Rs.50,000/- and AccountNo.18642560000235, for a sum of Rs.10,67,619.14/-, which havebeen paid by the petitioner's bankers by means of demand draft,without intimation to the petitioner. 4.The manner, in which, the bank accounts of thepetitioner have been attached and the monies have been recoveredby the respondent is incorrect, for more than one reason.Firstly, on account of the fact that the period of limitationfor filing Appeal before the ITAT had not expired. Secondly,without notice to the petitioner and without affording anopportunity of personal hearing to the petitioner to rebut thestand that, they are not an assessee in default, proceedingcould not have been initiated directly through the Bank. 4.The manner, in which, the bank accounts of thepetitioner have been attached and the monies have been recoveredby the respondent is incorrect, for more than one reason.Firstly, on account of the fact that the period of limitationfor filing Appeal before the ITAT had not expired. Secondly,without notice to the petitioner and without affording anopportunity of personal hearing to the petitioner to rebut thestand that, they are not an assessee in default, proceedingcould not have been initiated directly through the Bank. 5.Therefore, the issue would be, as to whether thepetitioner would be entitled to receive the amounts, which werecollected through the Bank, by filing Appeal before ITAT. Thisissue was considered by the Mumbai Income Tax AppellateTribunal, in the case of Rpg Enterprises Ltd., Vs. DeputyCommissioner of Income Tax, dated 14.07.2000 and the Tribunalobserved that, 'the assessee would be entitled to get back themoney till a decision is rendered by the Tribunal. In fact,this Court had an occasion to consider the issue as to the https://hcservices.ecourts.gov.in/hcservices/ correctness of the order of attachment passed on an assesseewithout issuing notice under Section 156 of the Act, in thecase of M/s.Coroamandel Oils Pvt., Ltd., Vs. The Tax RecoveryOfficer T 1 and others in W.No.26821 of 2016, and after takinginto consideration of its intra Court's decision, in the case ofSri Lakshmi Brick Industries Vs.The Tax Recovery Officerreported in (2013) 351 ITC 0345 and the judgment of the Hon'bleSupreme Court of India, in the case of (Sri Mohan Wahi Vs.Commissioner of Income Tax and others reported in (2001) 248 ITR799, by order, dated 14.09.2016, allowed the Writ Petition onthe following terms:- '' 14.The learned Senior StandingCounsel for the Revenue pointed out that, inthe decision rendered in Sri Lakshmi BrickIndustries (supra), the Court did notinterpret the expressions ''final'' and''conclusive'', and therefore, the saiddecision cannot be applied to the facts ofthe case on hand. This contention does notmerit acceptance, as the decision in SriMohan Wahi's case (supra) was rendered,taking into consideration the scope ofSection 225 (3) read with Rule 12 of secondschedule to the Act. This was taken note ofin Sri Lakshmi Brick Industries (supra), andtherefore, the ground raised by the Revenue,is not a ground to distinguish the decisionin Sri Lakshmi Brick Industries (supra). 15. In the considered view of thisCourt, the decision in Sri Lakshmi BrickIndustries (supra) would apply with fullforce to the case of the petitioner herein. 16.The learned Senior Standing Counselfor the Revenue has referred to the decisionin Ghanshyamdas Jatia's case, and submittedthat, unless the outstanding demand isreduced by an order in Appeal, or otherproceeding, and such order has become finaland conclusive, the question of lifting theattachment does not arise, and the positionwould be that, the certificate proceedingalready started under the original assessmentin such case remains in abeyance, subject tothe provisions of Section 225 (4) abidingwith the last order, as it attains finalityand conclusiveness. In the said decision,the matter was pending before the Tribunal, 16.The learned Senior Standing Counselfor the Revenue has referred to the decisionin Ghanshyamdas Jatia's case, and submittedthat, unless the outstanding demand isreduced by an order in Appeal, or otherproceeding, and such order has become finaland conclusive, the question of lifting theattachment does not arise, and the positionwould be that, the certificate proceedingalready started under the original assessmentin such case remains in abeyance, subject tothe provisions of Section 225 (4) abidingwith the last order, as it attains finalityand conclusiveness. In the said decision,the matter was pending before the Tribunal, and the Court observed that the matter hadnot attained the character of final andconclusive order, and therefore, it did nothave any effect on the certificateproceeding, which remained in abeyancepending decision by a final and conclusiveorder. 17.However, in contradistinction tothe present case, the Appeal filed by thepetitioner/assessee has been allowed in fullby ITAT, and demand of tax, in respect ofthe assessment year 2009-10 was Nil, and withregard to two assessment years, it hasresulted in refund. Thus, to say that theorder of attachment should still continuetill the matter reaches the Hon'ble SupremeCourt would be an interpretation, which wouldbe inconsistent with the provisions of theAct, more particularly, by reading togetherSections 222 and 225 of the Act. 18. As rightly pointed out by thelearned counsel for the petitioner, theobject of the demand is to secure theinterest of the revenue. The Income TaxOfficer acquires jurisdiction to attach theproperty based on a certificate issued by theTax Recovery Officer, certifying that theassessee is a defaulter. As on date, the TaxRecovery Officer has not issued such acertificate. Even assuming that the TaxCase Appeal filed by the Revenue isentertained, that by itself, will not makethe petitioner as an assessee in default, onaccount of the fact that the entire taxliability is wiped of pursuant to the orderof ITAT. 19. Assuming further that the Revenuesucceeds in the Tax Case Appeal,automatically, the assessee will not betreated as defaulter, since the consequentialorders have to be passed, notice of demandhave to be issued, time has to be granted,thereafter, proceeding has to be initiatedand certificate has to be issued by the TaxRecovery Officer, declaring the petitioner asdefaulter, and only then, the order ofattachment of immovable property of thepetitioner could be effected. Furthermore, the decision in the case of Sri Lakshmi BrickIndustries (supra) was challenged by theRevenue, by way of Writ Appeal, being WritAppeal No.1527 of 2013 and it is pending,and it is submitted that the issue involvedin the Writ Appeal has become infructuous. 19. Assuming further that the Revenuesucceeds in the Tax Case Appeal,automatically, the assessee will not betreated as defaulter, since the consequentialorders have to be passed, notice of demandhave to be issued, time has to be granted,thereafter, proceeding has to be initiatedand certificate has to be issued by the TaxRecovery Officer, declaring the petitioner asdefaulter, and only then, the order ofattachment of immovable property of thepetitioner could be effected. Furthermore, the decision in the case of Sri Lakshmi BrickIndustries (supra) was challenged by theRevenue, by way of Writ Appeal, being WritAppeal No.1527 of 2013 and it is pending,and it is submitted that the issue involvedin the Writ Appeal has become infructuous. 20.Thus, the decision of this Court inthe case of Sri Lakshmi Brick Industries(supra) being the jurisdictional Court forthe respondent, the same would bind over therespondent, as held by the Hon'ble SupremeCourt in the case of (M/s. East IndiaCommercial Co. Ltd., and another Vs.Collector of Customs, Calcutta) reported inA.I.R. (1962) S.C. 1893, that the lawdeclared by the highest court in the State isbinding on authorities, or tribunals underitssuperintendence,andthattheycannot ignore it, either in initiating aproceeding or deciding on the rights involvedin such a proceeding. 21.The learned Senior Standing Counselfor the Revenue relied upon the decision ofthis Court in Pyramid Saimira Theatre Ltd.,( supra). On a carefully going through thesaid decision, it is noted that the decisionwas on an entirely different issue, not withspecific reference to the point, which hasbeen agitated as to the effect of expressions''final'' and ''conclusive''. Therefore,the said decision does not render support tothe stand of the Revenue. 22.For all the aforesaid reasons, theWrit Petition is allowed, and the firstrespondent/Tax Recovery Officer is directedto pass appropriate orders for lifting theorder of attachment of the immovable propertyof the petitioner, and return the originaldocuments given as surety to the secondrespondent, vide letter, dated 04.09.2012,and pass necessary consequential orders withdue intimation to the Sub Registrar,Neelankarai. The above direction shall becomplied with by the first respondent, withina period of four weeks from the date ofreceipt of a copy of this order. No costs.Consequently, connected Writ MiscellaneousPetitions are closed. " 6.In the light of the above decisions, this Court wouldbe fully justified in issuing appropriate direction to re-creditthe amount to the petitioner's bank accounts. However, since itis represented that the petitioner is already in the process offiling Appeal to the ITAT, this Court is inclined to grantliberty to the petitioner to seek for such relief before theITAT. It is further represented that, apart from the above twobank accounts, there is third account maintained by thepetitioner, which is EEFC account, bearing No.50200025012377, atHDFC Bank, T.Nagar Branch, Chennai, which is yet to be attachedby the respondent, and it is stated that the respondent ispresent in the petitioner's bank to attach the said account,while this Writ Petition is being argued before this Court. 7.Considering the above facts, the respondent isrestrained from attaching the petitioner's EEFC AccountNo.50200025012377, at HDFC Bank, T.Nagar Branch, Chennai, tillthe petitioner's approaches the ITAT, challenging the orderpassed by the Commissioner of Income Tax (Appeals) -3 Chennai,dated 27.10.2017, by way of Appeal. The learned Senior StandingCounsel for the Revenue expresses her apprehension that thepetitioner/assessee may indefinetly delay in filing the Appeal,and therefore, states that, the Court should fix time limit forfiling such Appeal before the ITAT, for, via., this order, therespondent is injuncted from attaching the petitioner's EEFC A/cNo.50200025012377, and this benefit should not last too long.The Revenue need not have any such apprehension since alreadysteps have been taken by the assessee, in filing the Appeal.In any event, the petitioner/assessee shall file Appeal beforethe ITAT within a period of four weeks from the date of receiptof this order. 8.With the above direction and observations, this WritPetition stands disposed of. No costs. Consequently, connectedWrit Miscellaneous Petitions are closed. dna/ Sd/- Assistant Registrar(CS IX) //True Copy// Sub Assistant Registrar ToThe Income Tax OfficerCorporate Ward 5(4)Room No.403, Aayakar BhavanMain Building, No.121, M.G.Road,Nungambakkam, Chennai 600 034. +1cc to Mrs.Hema muralikrishnanan, Advocate SR.No.92396+1cc to Mr.Jayachandran, Advocate Sr.No.92300 MG(CO)sm:8.2.2018 Writ Petition No. 33765 of 2017