Skc v. Income-Tax Officer, 19(3)(2) [1], Pending Disposal Of Stay Applications, The Revenue Would Not Adopt Coercive Proceedings Against The Assessee. Therefore, The A

IN THE HIGH COURT OF JUDICATURE AT BOMBAYCIVIL APPELLATE JURISDICTION WRIT PETITION NO. 10709 OF 2014 Mr. Percy Pardiwalla - Senior Advocate with Vidushi Mahewari and Mr. Ranjeet Mathani i/b. Economic Laws Practice for Petitioners.Mr. Vimal Gupta - Senior Advocate with Padma Divekar for Respondents. P.C:- CORAM: M. S. SANKLECHA, & M. S. SONAK, JJ.DATE : 01 DECEMBER, 2014. 1]This petition assails the communication dated 29 September 2014 directing the petitioners to pay within seven days the tax demanded for the Assessment Years 2011-12 and 2012-13 and penalties as imposed for the Assessment Years 2007-08 to 2012-13. Besides, the petition seek a direction that their application dated 30 April 2014 to the Assessing Officer under Section 220(6) of the Income Tax Act, 1961 ("Act") for treating the petitioner as not being an assessee in default till its appeals in respect of penalties imposed for A. Y. 2007-08 to 2012-13 are disposed of by the Commissioner of Income Tax (Appeals). 2]For the Assessment Years 2007-08 to 2012-13 Assessment Orders were passed holding the petitioners to be an assessees in default for the purpose of Section 201(1) / 201(1A) of the Act. The petitioners had carried the above orders with regard to the quantum of tax payable in appeal to the Income Tax Appellate Tribunal (Tribunal). The petitioners had paid the amount of tax in dispute for the Assessment Years 2007-08 to 2010-11 to the Revenue. However the amounts of tax in dispute for Assessment Years 2011-12 and 2012-13 had not been paid to the Revenue. Thus the petitioners filed application for stay seeking to restrain the Revenue from recovering the outstanding demand relatable to the Assessment Years 2011-12 and 2012-13 till the disposal of its appeal. The Tribunal by an order dated 1 July 2014 disposed of the petitioner's stay application directing the Assessing Officer to maintain status quo till the final order is passed in the above appeals. This was particularly so as the appeal itself has been heard on 1 July 2014. 3]Therefore the demands for the tax made in the impugned communication dated 29 September 2014 for the Assessment Years 2011-12 and 2012-13 is in the face of the order of the Tribunal dated 1 July 2014 and thus without jurisdiction. We, therefore, set aside the communication dated 29 September 2014 to the extent it seeks to recover tax payable by the petitioners under Section 201(1) and 201(1A) of the Act for the Assessment Years 2011-12 and 2012-13. The demands for the Assessment Years 2011-12 and 2012-13 would be subject to the decision of the Tribunal which has already heard the appeals and its orders are awaited. 4]On 28 March 2014, the Assessing Officer has passed separate orders imposing penalties under Sections 271C of the Act for the Assessment Years 2007-08 to 2012-13. This was consequent to orders 4]On 28 March 2014, the Assessing Officer has passed separate orders imposing penalties under Sections 271C of the Act for the Assessment Years 2007-08 to 2012-13. This was consequent to orders passed under Section 201(1) /201(1A) of the Act in quantum proceedings being upheld by the Commissioner of Income Tax (Appeals). Immediately on receipt of orders dated 28 March 2014, the petitioners filed appeals with Commissioner of Income Tax (Appeals) on 29 April 2014. Thereafter on 30 April 2014 filed an application under Section 220(6) of the Act to the Assessing Officer seeking that the petitioners be not declared an assessees in default in respect of the penalties imposed for the Assessment Years 2006-07 to 2012-13. The aforesaid application has not yet been disposed of by the Assessing Officer. Inspite of the above application dated 30 April 2014 pending disposal, the Deputy Commissioner of Income Tax by the impugned communication dated 29 September 2014 called upon the petitioners to pay within seven days the penalties imposed for Assessment Years 2007-08 to 2012-13. Thus the demand made by the impugned communication dated 29 September 2014 calling upon the petitioners to pay the penalties is premature as the petitioners application dated 30 April 2014 is still pending before the Assessing Officer. 5]In view of the above, the impugned communication dated 29 September 2014 is without jurisdiction both in seeking to recover penalties for the Assessment Years 2007-08 to 2012-13 and the disputed tax for the Assessment Years 2011-12 and 2012-13. Thus, the impugned communication dated 29 September 2014 is quashed and set aside in its entirety. 6]As the petitioners application under Section 220(6) of the Act in respect of penalties imposed is still pending before the Assessing Officer, in the light of the decision of this Court in UTI Mutual Fund vs. Income-tax Officer, 19(3)(2) [1], pending disposal of stay applications, the Revenue would not adopt coercive proceedings against the assessee. Therefore, the Assessing Officer is directed to dispose of the petitioners application under Section 220(6) of the Act for the Assessment Years 2007-08 to 2012-13 in respect of the penalties imposed before seeking to adopt any proceedings for recovery of the amounts of penalty imposed. It is made clear that the Revenue would take no coercive steps for a period of two weeks from the date of communication of the order passed on the application dated 30 April 2014. It may be pointed out that though the petitioners have filed an application for stay before the Commissioner of Income Tax (Appeals), which even according to the petitioners has been filed only as a matter of abundant caution. Therefore, at this stage, we have not dealt with the petitioners application dated 14 October 2014 filed on 17 October 2014 seeking stay of the orders dated 28 March 2014 imposing penalties upon the petitioners under the inherent jurisdiction of an appellate authority. 7]In view of the above, we pass the following order: (A)The communication dated 29 September 2014 issued by the Deputy Commissioner Income Tax is quashed and set aside; and (B)The Assessing Officer is directed to dispose of the petitioners application under Section 220(6) of the Act as expeditiously as possible. Further till a period of the two 5/5 weeks from the date of communication of the order to the petitioners, the Revenue will not adopt any coercive proceedings for recovery of penalties imposed for A.Y. 2007-08 to 2012-13. 8]Accordingly, the petition is disposed of in above terms. No order as to costs. (M. S. SONAK, J.) (M. S. SANKLECHA, J.) chandka