Shri. Nikhil Kelkar v. Income Tax Officer 11(3) (1) And Ors

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION LODGING NO.3241 OF 2013 Shri. Nikhil Kelkar. ...Petitioner. vs. Income Tax officer 11(3) (1) and ors. ...Respondents. Mr. B.L. Gandhi i/by K.C.Pandey for the Petitioner.Mr. P.C.Chhotary for the Respondent. CORAM : MOHIT S. SHAH, C.J. ANDM.S. SANKLECHA, J. DATE : 23 December, 2013 PC: This petition under Article 226 of the Constitution of India challenges the coercive action to recover tax under the Income Tax Act,1961 (“the Act”)on the part of respondent No.1 i.e. Assessing officer. The tax of Rs.26.24 lacs is sought to be recovered consequent to assessment order dated 25 March 2013. 2)The petitioner has filed appeal before CIT(A) Mumbai-respondent No.2 herein on 18 April 2013 from the assessment order dated 25 March 2013. During the pendency of the appeal respondent No.1-Assessing Officer issued notice dated 14 October 2013 under Section 226 and/or 221 of the Act intimating the petitioner that if the petitioner had failed to make payments of the outstanding tax, coercive action for recovery of the tax will be taken against the petitioner. The petitioner was also called upon to appear before the respondent No.1 within 5 days from the date of receipt of the letter. Respondent No.1 thereafter sent notices dated 9 December 2013 under Section 226(3) of the Act to the petitioner's bankers viz. Respondent Nos. 3 to 6 attaching the petitioner's accounts in the four banks and calling upon the banks to pay to respondent No.1 amount of petitioner's dues to the tune of Rs.26.24 lacs under the Act. 3)Learned Counsel for the respondents opposes the petition. It is submitted that the assessment order was passed on 25 March 2013 and the petitioner did not even apply for stay either from the Assessing officer or from the CIT. In support, reliance was placed upon Section 220(6) of the Act and instruction No.1914 dated 2 December 1993 issued by the CBDT. Therefore, it is submitted that the Assessing Officer was not restrained from initiating recovery proceedings as done in this case. 4)The petitioner was informed on 18 December 2013 by respondent No.5 Bank about the attachment of the bank accounts by respondent No.1. The petitioner therefore, filed the present petition challenging the above recovery on the ground that as the petitioner's appeal is pending before respondent No.2-CIT(A), the recovery proceedings should only be initiated only after the decision in appeal. In any case, it is submitted that the petitioner has on 16 December 2013 also filed a stay application before the CIT(A). Therefore, at least till the disposal of the stay application, the revenue be directed to restore status quo ante as existing prior to attachment. 5)We have heard the learned Counsel for the parties. The appellate authority i.e. CIT(A) has admittedly inherent power to do all that necessary for the just disposal of the appeal and the same would include the power to stay the demand pending disposal of the appeal before it. We find that the petitioner has already filed a stay application before the CIT(A) on 16 December 2013 in its pending appeal. In the circumstances, we are of the view that interest of justice would be served if the petition is disposed of with following directions:- (a) that the respondent No.2 i.e. CIT(A) shall hear and decide the petitioner's stay application as expeditiously as possible, preferably within four weeks from today; (b) that till the CIT(A) decides the petitioner's stay application, the respondent No.1 shall not withdraw any amount from the petitioner's bank accounts in respondent Nos. 3 to 6 Banks which have been attached as per the notice dated 9 December 2013. However, it is made clear that the attachment of the bank accounts shall continue till the CIT(A) decides the petitioner's stay application; and (a) that the respondent No.2 i.e. CIT(A) shall hear and decide the petitioner's stay application as expeditiously as possible, preferably within four weeks from today; (b) that till the CIT(A) decides the petitioner's stay application, the respondent No.1 shall not withdraw any amount from the petitioner's bank accounts in respondent Nos. 3 to 6 Banks which have been attached as per the notice dated 9 December 2013. However, it is made clear that the attachment of the bank accounts shall continue till the CIT(A) decides the petitioner's stay application; and (c) in case the decision on the stay application is adverse to the petitioner, for a period of two weeks from the date of communication of the decision on the stay application by the CIT(A), the respondents shall not withdraw any amount from the bank accounts of the petitioner. 6)This order is passed without prejudice to the rights and contentions of the parties and without going into the merits of the petition. 7)Petition is, accordingly, disposed of with no order as to costs. CHIEF JUSTICE (M.S. SANKLECHA, J.)