TMI Blog2019 (3) TMI 1559X X X X Extracts X X X X X X X X Extracts X X X X ..... h February, 2019 of the Pr. CIT are unsustainable. The order under Section 281B was issued just two days before the assessment order was passed and neither does the order mention any basis for apprehension of the Revenue nor does the affidavit state any reasons in support of the action nor any submission made in support of its order dated 18th December, 2018 under Section 281B of the Act. Moreover, the notices under Section 226(3) of the Act were issued on 19th December, 2018 to the petitioner's bankers. This without any amount being due from the petitioner to the Revenue on that date and calling upon the petitioner's bankers to pay over the amounts of the petitioner lying with them to the Income Tax Department. We also set aside the notice dated 15th February, 2019 by which the refund of ₹ 21.41 Crores available to the Petitioner for the Assessment Year 2013-14 is adjusted against the outstanding demand of ₹ 52.78 Crores for subject assessment year and direct the refund of ₹ 21.41 Crores to the Petitioner in accordance with law; and We set aside the order dated 18th December, 2018 passed under Section 281B of the Act. This as the Revenue has not been ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eries under Section 220(6) of the Act of outstanding demand, arising out of assessment order dated 20th December, 2018, relating to Assessment Year 2015-16, pending disposal of its appeal by the Commissioner of Income Tax (Appeals) [CIT(A)], be set aside; (d) notice of demand dated 15th February, 2019 passed by the Assessing Officer, adjusting refund of ₹ 21.41 Crores, payable for the Assessment Year 2013-14 against outstanding demand of ₹ 52.78 Crores payable for the Assessment Year 2015-16 under Section 245 of the Act be, set aside; and (e) as a consequence of the above, the Assessing Officer be directed: (i) to deposit forthwith the amount of ₹ 14.62 Crores adjusted for Assessment Year 2015-16 after withdrawing in aggregate an amount of ₹ 29.25 Crores from the Petitioner's bank account; (ii) to hand over the refund of ₹ 21.41 Crores relating to Assessment Year 2013-14; and (iii) to restrain the Respondents from adopting any proceedings for recovery of any outstanding demand for the Assessment Year 201516 till the disposal of its pending appeal by the CIT(A) and for a period of eight weeks thereafter. 3. The facts l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 226(3) of the Act (not served upon the Petitioner), the Petitioner addressed a communication dated 21st December, 2018 to the Assessing Officer, pointing out that the impugned notice were contrary to the provisions of the Act. This was so as no amount was due from the Petitioner to the Revenue on 19th December, 2018 when the notice was issued. It was pointed out that no assessment order for Assessment Year 2015-16 (in respect of which notice is issued) has been passed till 19th December, 2018. Thus, the notices are bad in law. It was also pointed out, that the impugned notices under Section 226(3) of the Act make reference to an attachment under Section 281B of the Act by an order dated 18th December, 2018, but the same had not been received by it. Thus, requesting the Assessing Officer to withdraw the attachment order under Section 281B of the Act and notices under Section 226(3) of the Act; (g) On receipt of the Petitioner's above letter dated 21st December, 2018, the Assessing Officer instead of acting upon the same and withdrawing the order under Section 281B and notices under Section 226(3) of the Act, issued a corrigendum dated 26th December, 2018, to the noti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the disputed/ outstanding demand. The above order also directs the Petitioner to pay the amounts on or before 1st February, 2019, failing which coercive proceedings were threatened; (l) The hard copy of the order dated 29th January, 2019 of the Assessing Officer was received by the Petitioner on 4th February, 2019. Immediately on 5th February, 2019, the Petitioner made a representation to the Respondent No.2 Pr. CIT, seeking a complete stay of the outstanding demand for A. Y. 2015-16 till the disposal of its appeal by the CIT(A); (m) During the course of common hearing before the Pr. CIT, on 13th February, 2013 in respect of stay of demands consequent to Assessment Orders for Assessment Year 2015-16 and 2016-17, the Petitioner was informed that the Assessing Officer had on 4th February, 2019, withdrawn an amount of ₹ 29.25 Crores from the Petitioner's bank account. At the hearing, the Petitioner was informed about the proposed adjustment of the refunds for Assessment Year 2013-14 with the demand for Assessment Year 2015-16. This without the Petitioner being given any notice and/or intimation of the withdrawal of the amount from the Petitioner's bank ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) has in the case of HDFC Property Fund on the issue of eligibility to exemption under Section 10(23FB) of the Act has taken a view in favour of the Revenue. Thus the view taken in the Petitioner's case for the earlier Assessment Year by the CIT(A) has been differed from, leaving the issue open. 5. Mr. Mistri, learned Senior Counsel appearing in support of the petition submits that action of the respondents particularly, the Assessing Officer has been arbitrary and contrary to not only binding decisions of this Court but also to the statutory provisions. In support of the above primary submissions, the following actions of the respondents have been pointed out : (a) The order of provisional attachment under Section 281B of the Act was issued on 18th December, 2018 by the Assessing Officer when the assessment order was imminent as it was passed on 20th December, 2018. Moreover, the above order was issued without the sanction of the Pr. CIT. The impugned order under Section 281B of the Act does not indicate any basis for the apprehension of the Revenue that the tax dues of the petitioner when liable would be in jeopardy, requiring extraordinary action of provisional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n law. (e) The action of the respondent no.1 Assessing Officer in adjusting the refund which was due for the Assessment Year 2013-14 against the demand for Assessment Year 2015-16 was again in defiance of the law laid down by this Court in Hindustan Unilever Ltd. Vs. DCIT, 377 ITR 281. Moreover, the action on the part of the respondent of serving the so called intimation notice of adjustment of the refund due against the demand payable was only after the petitioner had been orally informed at the hearing by the respondent no.2 Pr. CIT that the refund amounts has been adjusted against the due for the subject assessment year; and (f) The order order dated 14th February, 2019 of the respondent no.2 Pr. CIT rejecting the petitioner's stay application without adhering to the directions in numerous decisions of this Court of the manner in which the applications for stay under Section 220(6) of the Act has to be disposed of by the Authorities under the Act. Thus, he submits a miscarriage of justice. It is submitted that not only the relief prayed for by the petitioners be granted but heavy costs be imposed upon the respondents. This to ensure that the Officers of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le disposing of the petitioner's application for stay, the miscarriage of justice would have been averted. 8. This Court in MMRDA Vs. Deputy DIT (Exemption) (2015) 230 Taxman 178 had on consideration of the earlier decisions of this Court, set out the parameters to be kept in mind while disposing the stay application filed under Section 220(6) of the Act, which read as under : 11. We have today, disposed of another Petition bearing No.2542 of 2014 filed by the Slum Rehabilitation Authority and set out the parameters in deciding stay application as laid down by this Court in KEC International Ltd. Vs. B.R. Balkrishnan 251 ITR 158; UTI Mutual Funds Vs. ITO 345 ITR 71 and UTI Mutual Fund Vs. ITO in W.P. (L) No.523 of 2013 rendered on 6th March, 2013 which can for the purposes of disposing an application of stay can be summarized as under: (a) The order on stay application must briefly set out the issue and the submission of the assessee/applicant in support of the stay; (b) In cases where the assessed income under the impugned order far exceeds returned income so as to make the demand arbitrary or the issue arising for consideration stands concluded by a de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (emphasis supplied) 9. In the present case, we note that both the impugned order dated 29th January, 2019 passed by the respondent no.1 Assessing Officer and order dated 14th February, 2019 passed by the respondent no.2 Pr. CIT have completely ignored the binding directions of this Court of the manner in which the stay applications are to be disposed of and the test to be applied while considering grant of a stay of demand under Section 220(6) of the Act pending disposal of appeal by CIT(A). In fact, none of the two orders set out even briefly the issue involved and the submissions of the parties in support of its application for stay and yet both the orders dispose of the stay application, adverse to the petitioner. On the above ground itself, the impugned order dated 29th January, 2019 of the Assessing Officer and 14th February, 2019 of the Pr. CIT are unsustainable. 10. Moreover, in the stay proceedings, it was the petitioner's contention that the issue of eligibility for claim under Section 10(23FB) of the Act stood concluded in its favour by orders of the CIT(A) for the Assessment Year 2014-15 and by the Tribunal for the Assessment Year 2013-14 and there are no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has reversed the decision of the CIT(A) in HDFC Property Fund while allowing the appeal of the party in line with the decisions in the case of the petitioner. In any event, one must not loose sight of the fact that it is the petitioner's own case which stands covered by the orders of the appellate authorities and the same must take precedence over other decisions as the facts and circumstances in the other cases may be different from that of the assessee. On the aforesaid grounds also the impugned orders dated 29th January, 2019 and 14th February, 2019 are unsustainable. 11. Normally, on setting aside the orders under Section 220(6) of the Act, we restore the application to the Authorities for fresh consideration in accordance with law. However, looking at the conduct of the Assessing Officer and Pr. CIT in this particular case, restoring the stay application to them for fresh disposal would not serve any purpose. This for the reason that the conduct of the respondent nos. 1 and 2 in this case has been high handed and manifestly unfair towards the petitioner being in defiance of settled law. We have come to this view not only for the manner in which the stay applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... petitioner intimating adjustment of the refund available for the Assessment Year 2012-13, 2013-14 and 2014-15 against the demands payable by the petitioner for the two Assessment Year 2015-16 and 201617. In fact, from the record as shown to us, it appears that letter / intimation given by the Assessing Officer is dated 11th February, 2019 and was received by the petitioner only on 13th February, 2019 at 6.00 p.m. i.e. after the hearing was concluded before the Pr. CIT. This conduct is not expected of the Officers of the State. It is unbecoming of the State. It appears the manner in which the Assessing Officer is communicating with the assessee, it is planned attempt to make it impossible for the petitioner to challenge the communication as by the time the petitioner comes to know of the proposed action on receipt of the communication, the action has already taken place making it a fait accompli. In any case, this adjustment of refund due for the other years with the demand for the subject Assessment Year under Section 245 of the Act by notice dated 15th February, 2019 is contrary to the law laid down by this Court in Hindustan Unilever Ltd. (supra). In the above case, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank account along with appropriate interest at the bank lending rate from the date of the withdrawal to the date of redeposit into the Petitioner's bank account. We direct that the redeposit shall be done expeditiously and not later than 3 weeks from today along with interest; (c) We also set aside the notice dated 15th February, 2019 by which the refund of ₹ 21.41 Crores available to the Petitioner for the Assessment Year 2013-14 is adjusted against the outstanding demand of ₹ 52.78 Crores for subject assessment year and direct the refund of ₹ 21.41 Crores to the Petitioner in accordance with law; and (d) We set aside the order dated 18th December, 2018 passed under Section 281B of the Act. This as the Revenue has not been able to justify the basis of their apprehension that if the Petitioner's assets are not attached, the interest of the Revenue in recovering its dues would be prejudiced. 14. Before parting, we have to express our dismay at the conduct of the Officers of the Revenue in this matter. We pride ourselves as a State which believes in rule of law. Therefore, the least that is expected of the Officers of the State is to apply the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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