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TMI Blog2018 (5) TMI 1769X X X X Extracts X X X X X X X X Extracts X X X X ..... d further that she may be directed to refund the amount recovered illegally from the assessee in violation of order dated 20.12.2017. 2. Before further proceeding, we would like to discuss here a few facts relevant to the adjudication of the Misc. Petition. The assessee filed the Stay Application No.18/Chd/2017 relevant to ITA No. 1560/Chd/2017 in for assessment year 2009-10 seeking stay of recovery of the outstanding tax demand for the year under consideration. It has been pleaded in the Stay Application that the Department had wrongly and illegally recovered certain amounts from the applicant-assessee before the assessee could approach the Tribunal for filing the appeal against the order of the CIT(A) and further certain amount was recovered during pendency of the appeal / stay application before this Tribunal. The said stay application has been disposed of by this Tribunal vide its order dated 20.12.2017. The relevant facts have been discussed in para 5 of the order dated 20.12.2017, which read as under:- "5. From the above pleadings of the parties and also from the perusal of the documents on record, following facts emerge before us:- (i) Certain additions were made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit petition allowed to be withdrawn. The Hon'ble High Court considering the above request allowed the application and dismissed the writ petition as 'withdrawn'. (ix) Similarly, for assessment year 2013-14, a tax demand of Rs. 25.35 crores was raised by the Assessing officer out of which the assesse deposited a sum of Rs. 30.80 cores being 15% of the tax demand and the remaining tax demand was stayed by the Assessing officer till the pendency of the appeal before CIT(A). The appeal for assessment year 2013-14 was also decided by CIT(A) on 17.10.2017 and the copy of the order was dispatched on 6.11.2017 which was received by the assessee on 9.11.2017. Assessee immediately filed appeal against the said order along with application for stay of recovery before this Tribunal. During the pendency of the appeal and stay application before this Tribunal, The Assessing Officer made coercive recovery of Rs. 5.85 crores on 20.11.2017 and another recovery of Rs. 7.85 cores on 22.11.2017, the date on which the Stay application was fixed for hearing before this Tribunal. The Assessing officer also recovered a sum of Rs. 50 lacs from the debtor of the assessee." 3. The Tribunal strongly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any remedy from the higher forum. 8. The another shocking fact which emerged during the course of arguments is that when a question was raised to the Department officials as to how the Department came into knowledge of the order of the CIT(A) prior to 06.11.2017 when the copy of the same was dispatched to the assessee by the office of CIT(A)? None of the officials of the Department could satisfactorily explain about it. Even they could not satisfactorily inform as to on which date the office of the AO received the copy of the impugned order of the CIT(A). Under the circumstances it remains unexplained as to how the information regarding the decision of the appeal against the assessee travelled to the Assessing officer, prompting her to recover the amount from the assessee, that too by way of coercive means and without show causing the assessee or giving it an opportunity to approach to the higher Forum. The contention of the department that this Tribunal should also bear in mind that the assessee's appeal pending before CIT(A) for assessment year 2014-15 will be decided in December 2017 raising demand, on similar lines as per assessment years 2008-09, 2009-10 and 2013-14 can als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been made when the matter was under consideration of the Tribunal as well of the Hon'ble High Court. 10. Another argument has been made that the amount recovered on 20.11.2017 and 22.11.2017 was appropriated towards the outstanding demand for AY 2013-14 and that the order of the Hon'ble High court was for AY 2009-10. We are again not convinced at this argument also. The Respondent department has the benefit of the order of the Hon'ble High court for earlier assessment year involving similar facts and circumstances which was decided by the CIT(A) on the same date as for AY 2013-14 and under the circumstances, there was no justification on the part of the AO to make haste in coercive recovery for AY 2013-14, that too, on 22.11.2017 itself when the matter was fixed before this tribunal for hearing on the stay application. At the most, the AO could have called upon the assessee to make the payments. No justification has been offered as to why the department directly adopted the course of coercive recovery without asking the petitioner to deposit the amount or show causing it as to why the coercive recovery be not effected? It is pertinent to mention here that the petitioner also i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... definite stand and the facts have been twisted as per whims and wishes of the Departmental officials and coercive recovery has been effected in an undue haste, violating all the principles of judicial discipline and natural justice. In the somewhat identical facts in the case of 'Maharashtra Housing & Area Development Authority (MHADA) vs ADIT (Exemptions)' [2014] 66 SOT 66 (Mumbai)/ URO / 49 taxman.com 341 (Trib), wherein coercive measure was made by the Department from the account of the assessee (MHADA) after the passing of the order of CIT(A) but prior to the hearing of the Stay application by the Tribunal, the Coordinate Mumbai Bench of the Tribunal has observed that ITO being a quasi-judicial authority should observe the parameters which are laid down by the High Courts in various decisions. The Tribunal while relying upon the decision of the Bombay High Court in the case of 'UTI Mutual Funds Vs. ITO' (2012) 19 taxman.com 250/345 ITR 71 (Bom.), of the Coordinate Bench of the Tribunal in the case of 'RPG Enterprises Ltd Vs. DCIT' (2002) 74 TTJ (Mumbai) 391 as well as in the case of 'Maharashtra State Electricity Board Vs. JCIT' (2002) 81 ITD 299 (Mumbai) has observed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... interim directions dated 29.11.2017 (as reproduced in the earlier part of this order). The said directions are reaffirmed. So far as the stay of the recovery of remaining part of the tax demand and interest thereupon is concerned, the Ld. AR of the assessee has submitted that the assessee is a local body engaged in the development of land and plots, making the same available to the general public for residential and business purposes. The assessee in the said development activities is in the need of funds. The assessee has also substantial financial liabilities as it has raised substantial loans from the bank. Further that the assessee has a fair case on merits. It has been further submitted that the Department has already recovered 31% out of the total demand for assessment year 2009-10 and almost 70% of the demand in assessment year 2013-14. He, therefore, has submitted that further recovery by the Department be stayed till the disposal of the appeal. Though, the Ld. DR has admitted that almost 70% of the amount for assessment year 2013-14 has already been recovered, however, she has further submitted that the Department be allowed to recover the amount to the extent of 50% of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... directed in the order dated 20.12.2017 reproduced above, the Departmental officials did not bother to give any heed to the directions passed by the Tribunal and again in complete violation of the orders of the Tribunal recovered / adjusted the amount of Rs. 16,50,62,238 vide letter of the Assessing officer dated 13.3.2018. Even the Assessing officer ignored the submissions made by the assessee vide letter filed on 28.2.2018 which was not only delivered to the office of the Assessing officer manually but also through e.mail dated 9.3.2018 and further reminder dated 12.3.2018 objecting against the adjustment of refund for assessment year 2008-09 against the demand for the assessment year under consideration i.e. 2009-10 and also apprising the Assessing officer about the Stay order of the Tribunal against the recovery of the demand. The Tribunal after considering the submissions of both the parties, passed the following order dated 23.3.2018:- "23.03.2018 M.A.No. 70/Chd/2018 -Greater Mohall Area Development Authority, Mohali Vs. DCIT Present for the assessee: Sh. Sudhir Sehgal, Advocate Present for the Department: Smt. Chanderkanta, Addl. CIT Heard the Misc. Petition. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore taking any action, the Assessing officer be given an opportunity to reply to the averments made in application. Another argument has been addressed that this Misc. Applicationis not maintainable as it does notspeak of any mistake apparent on record of the order. That there was an order of the Hon'ble High Court dated 5.12.2017, whereas, this Tribunal subsequently has passed the order dated 20.12.2017. That in view of this, the order of the Tribunal is not enforceable. Further, that the present Misc. Application is not maintainable at this stage. 3. We have considered the rival contentions. It is noticed from the record that this Tribunal vide order dated 20.12.2017 has noticed that the Department has already recovered 31% of the total demand for assessment year 2009-10, and taking into consideration the facts and circumstances of the case especially the development activity carried on by the assessee, the further recovery of the demand has been stayed for a period of 6 months or till the disposal of the appeal by the Tribunal, whichever is earlier. The Tribunal has also re-affirmed its directions given on 29.11.2017, directing the Department to refund the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Let the concerned Assessing officer as well as the other concerned officers who have either part of the execution of recovery or have approved the recovery / adjustment of refund despite the order of the Tribunal dated 20.12.2017 come and explain their position on 6.4.2018. Copy of the order be supplied to the Ld. DR so that the same may be conveyed further to the concerned officer/s." 5. Pursuant to the above order, the Assessing officer namely Dr. Ranjit Kaur, DCIT and the Additional CIT namely Shri Kultej Singh Bains, who approved the aforesaid proposal for adjustment of refund appeared in person on 6.4.2018 and tendered apology letter. However, when this Tribunal enquired as to whether the amount illegally recovered in violation of the said order dated 20.12.2017 has been refunded to the assessee, they answered in negative, and thereafter the case was adjourned to 10.4.2018 for submitting report by the concerned officials regarding refund of the amount illegally recovered and also explanation of the concerned official regarding their illegal acts of recovery. Thereafter on 10.4.2018, the concerned officials namely Dr. Ranjit Kaur, JCIT and Shri Kultej Singh Bains, Addl. CIT a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the two i.e. either to face the departmental action / dire of their senior officers for not achieving the targets or to face the contempt proceedings, if any, likely to be initiated by the Courts of law for violation of their orders, and interestingly, they conveniently choose the later option because perhaps they think that courts / higher judicial authorities will not opt for strict view in case the amount coercively recovered is refunded after passing of the cutoff date i.e. 31st March, and an apology tendered to the Court / higher judicial authority. They also know that that even such a situation of refund or apology could occur only in case the concerned assessee would choose to contest such illegal recovery. Our above view is not only based on the facts of this case, but we have come across with these type of facts and circumstances in other cases also. This type of practice adopted by the Department, in our view, may lead to severe consequences affecting the administration of justice. It is right time for the Department / CBDT to take necessary steps in this respect. 7. Now coming to the facts on merits, as observed above, since the amount recovered illegally during the sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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