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2012 (3) TMI 333 - HC - Income TaxRecovery and issuance of garnishee notice - Legitimacy of demand - Assessing Officer assessed the Trust as an Association of Persons (AOP) - Assessing Officer has invoked the provisions of Section 177(3) and has called upon the petitioner to pay the aforesaid amount as its share of the outstanding demand for investment made by the petitioner - it would be necessary for the Court to clarify that the issue in these proceedings is confined to whether the Revenue should be permitted to enforce the demand of Rs.9.63 crores and to take coercive steps under Section 226(3) in the form of a garnishee notice which has been issued to the bankers of the petitioner - The submission of the petitioner is that if at all, an assessment could have only been made in the hands of the petitioner as the transferor of a revocable trust, in which event the income would be exempt under Section 10(23D) - the assessing officer has made an assessment, he must objectively decide the application for stay considering that an appeal lies against his order : the matter must be considered from all its facets, balancing the interest of the assessee with the protection of the Revenue - Held that: the assessee in the present case has a serious issue to urge as regards the legitimacy of the demand which has been raised by the impugned notice dated 29 February 2012, including in regard to the applicability of Section 177(3) of the Income Tax Act, 1961 on which the demand has been founded - Attachment stand lifted.
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