Wp/7731/2010 Of P. Bhaskara Rao v. The Assistant Commissioner Of Income Tax

IN THE HIGH COURT OF JUDICATURE, ANDHRAPRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE EIGHTH DAY OF APRILTWO THOUSAND AND TEN PRESENT THE HON'BLE MRS. JUSTICE T.MEENA KUMARIAND THE HON'BLE MR JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION NO : 7731 OF 2010 Between: P.Bhaskara Rao AND ..... PETITIONER The Asst. Commissioner of Income Tax,Circle 10(1) Hyderabad and others .....RESPONDENTS The Court made the following : ORAL ORDER:(per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI) Seeking a writ of mandamus declaring the noticedated 10.3.2010 issued by the first respondent torespondents 4 and 5 attaching the bank accounts of thepetitioner for recovery of the disputed tax arrears to thetune of Rs.22,41,980/- for the assessment years 2007-2008 as illegal, arbitrary and unreasonable and to hold that the petitioner is not in default of tax, pending appealbefore the third respondent petitioner filed this writ petition. The petitioner is an income tax assessee on the rollsof first respondent. For the assessment year 2007-2008the first respondent has completed the assessment byorder dated 29.10.2009 taxing the short term capital gainat 33% treating the same to be business income. Thepetitioner, aggrieved thereby preferred an appeal beforethe third respondent bearing No.0184/09-10, which ispending. The petitioner also filed applications seekingstay of collection of the disputed tax of Rs.22,41,980/-before respondent 1 and also respondent No.3, beforewhom appeal is pending. The petitioner further informedrespondent No.1 that the third respondent has posted theappeal for hearing in the month of March, 2010 andrequested not to take coercive steps, for recovery of thedisputed amount. The respondent No.1 by letters dated18.11.2009 and 23.2.2010 which, the petitioner contends,are anti-dated, informed the petitioner that the stay petitionfiled by him is rejected. According to the petitioner,immediately after issuing the above letter, notice underSec. 226(3) of the Income Tax Act dated 10.3.2010 wasaddressed to the respondents 3 and 4 attaching the bankaccounts for collection of the arrears of disputed taxesand the accounts were frozen. Hence, the present writpetition is filed. Heard the learned counsel for the petitioner andMr.B.Narasimha Sarma, the learned Standing Counsel forRespondents 1 to 3. It is contended on behalf of the petitioner that in viewof this backdrop and factual position of the case, issuanceof notice under Sec.226 (3) by the Assessing Officer andattaching the bank accounts for recovery of the disputedtax demand is arbitrary and to substantiate thissubmission, several contentions are raised, which we donot propose to delve for the present. In the facts and circumstances of the case, as thematter relates to stay pending appeal and it is representedthat the petitioner has already paid 10% of the tax due asclaimed by the respondents, we are of the consideredopinion that the impugned demand notice can besuspended subject to certain conditions, without advertingto the merits sought to be contended by the learnedcounsel for the petitioner. Accordingly, the impugneddemand notice is suspended subject to the condition ofthe petitioner paying a further sum of Rs.2.00 lakhs(Rupees two lakhs) within a period of four weeks fromtoday and the respondents are directed not to takecoercive steps for recovery of the balance disputed tax,pending appeal before the Appellate Authority. TheAppellate Authority is directed to dispose of the appeal asexpeditiously as possible not later than 31.07.2010. With these directions, the writ petition is disposed of.No order as to costs. ____________________Justice T.Meena Kumari April 08, 2010MAS __________________________ Justice Nooty Ramamohana Rao