TMI Blog2019 (4) TMI 863X X X X Extracts X X X X X X X X Extracts X X X X ..... on the lower authorities in the herarchical system of jurisprudence adopted by us. Thus, it is not open to the lower authorities to seek to enforce decisions contrary to and in defiance of the orders of the higher forums in the absence of any change in the facts and/or in law. Thus, while dealing with an application for stay of demand pending the disposal of an appeal before the CIT(A), the demand relatable to the assessment order being contrary to the orders of appellate authorities ought to be stayed for the mere asking. Normally, on setting aside the orders u/s 220(6), 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 application is disposed of by the respondent nos. 1 and 2 but from the manner in which the not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unfair treatment. The desire to collect more revenue cannot be at the expense of Rule of law. - WRIT PETITION NO.543 OF 2019 - - - Dated:- 26-3-2019 - AKIL KURESHI And M.S. SANKLECHA, JJ. Mr. J. D. Mistri, Sr. Advocate with Mr. Madhur Agrawal i/b. Mr. A. K. Jasani, for the Petitioner. Mr. Sham Walve, for the Respondents. JUDGMENT (PER M.S. SANKLECHA, J.): RULE. By consent, rule made returnable forthwith. Counsel for the Respondent waive service. Petition taken up for final disposal. 2 This Petition under Article 226 of the Constitution of India, relates proceedings under the Income Tax Act, 1961 (the Act) for Assessment Year 2016 17. The Petitioner seeks the following reliefs: (a) the order dated 18th December, 2018 passed by the Assessing Officer of provisional attachment under Section 281B of the Act, be set aside; (b) notices dated 19th December, 2018 issued to the Assessing Officer under Section 226(3) of the Act, attaching Petitioner's bank accounts be set aside; (c) the orders dated 29th January, 2019 passed by Respondent No.1Assessing Officer and 14th February, 2019 passed by Respondent No.2 Pr. Commissioner of Income Tax [Pr. C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment Year 2016 17. This attachment order was served on the Petitioner only on 2nd January, 2019, although in the meantime, the attachment order had already been served on the Petitioner's bankers, attaching Petitioner's bank account; (d) Further, during the pendency of the scrutiny assessment proceedings i.e. on 19th December, 2018, the Assessing Officer issued notices under Section 226(3) of the Act to the Petitioner's Bankers. The above notices stated that an amount of ₹ 46.47 Crores is due from the Petitioner for Assessment Year 2016 17 along with interest thereon under Section 220 of the Act. The above notices also requested the Petitioner's Bankers to make payment of the amounts available with it to the Income Tax Department to meet the Petitioner's dues; (e) No sooner the Petitioner's Bankers informed it of the impugned notices dated 19th December, 2018 issued under Section 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment Year 2014 15 by CIT(A) and for Assessment Year 2013 14 by Income Tax Appellate Tribunal as is evident from the Assessment Order. Besides, it was pointed out that the Revenue is secured, as huge refunds are payable by the Revenue to the Petitioner; (i) On 14th January, 2019, the Assessing Officer lifted the attachment of some of the Petitioner's bank accounts. However, the attachment of the other bank accounts continued undisturbed; (j) By order dated 29th January, 2019, the Assessing Officer rejected the Petitioner's application for stay pending disposal of its appeal for Assessment Year 2016 17 by the CIT(A). The above order does not deal with the Petitioner's submission and holds that mere filing of an appeal to the CIT(A) is not sufficient to grant a stay. Besides, relying upon the CBDT instructions which states that stay can be granted only on deposit of 20% of the disputed/ outstanding demand. The above order also directs the Petitioner to pay the amounts on or before 1st February, 2019, failing whichcoercive proceedings were threatened; (k) The hard copy of the order dated 29th January, 2019 of the Assessing Officer was received by the Petitioner on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.46 Crores for the Assessment Years 2012 13, 2013 14 and 2014 15 with the aggregate demand of ₹ 1.33 Crores, the aggregate balance demand of ₹ 69.66 Crores would be stayed till the disposal of the appeal by the CIT(A); and (p) It was only later that the Petitioner received an order/notice dated 15th February, 2019 from the Assessing Officer seeking to adjust the refund of ₹ 60.46 lakhs and ₹ 12.42 Crores for the Assessment Years 2012 13 and 2014 15 against the demand of ₹ 51.32 Crores for the Assessment Year 2016 17. 4 It is on the above facts, that the Petitioner has filed this Petition for the relief detailed herein above. The Assessing Officer has filed an affidavit in reply dated March, 2019. On facts, the affidavit of the Assessing Officer adverts to two issues as under: (a) The approval of the Pr. CIT was obtained prior to issuing a notice under Section 281B of the Act for provisional attachment; and (b) The 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h January, 2019 for petitioner to pay the amounts is unfair and contrary to the decision of this Court. Thereafter, the Assessing Officer posthaste recovered the amounts aggregating to ₹ 29.25 Crores from the petitioner's bank accounts even though undisputedly there was no fear of any amounts being withdrawn by the petitioner as the bank account stood attached in favour of the Revenue. Moreover, this action of withdrawing the amounts from the attached bank accounts on the part of the respondents was in defiance of the decision of this Court in UTI Mutual Funds Vs. ITO Ors. 344 ITR 71. In the above case, the Court has while dealing with powers of the Assessing Officer to recover the dues pending disposal of appeals has specifically held that before withdrawing the amounts from a bank account which has been attached, a reasonable prior notice should be furnished to the assessee to enable it to seek appropriate remedy, if any, available in law. (e) The action of the respondent no.1 Assessing Officer in adjusting the refund which was due for the Assessment Years 2012 13 and 2014 15 against the demand for Assessment Year 2016 17 was again in defiance of the law laid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rit jurisdiction. It is submitted that the petitioner's contention on merits would be dealt with by the CIT(A) in accordance with law. 7 We have considered the rival submissions. The manner in which the Revenue has dealt the petitioner in respect of subject Assessment Year 2016 17 leaves much to be desired. We shall first address ourselves to the petitioner's grievance that in the facts and circumstances of the present case, an unconditional stay of the entire demand ought to have been granted as the issue of petitioner's claim for eligibility under Section 10(23FB) of the Act was already upheld by the CIT(A) for the Assessment Year 2014 15 and by the Tribunal for Assessment Year 201314. It is the submission on behalf of the petitioner that if the parameters laid down by this Court in numerous decisions beginning with KEC International Ltd. Vs. B.R. Balkrishnan, 251 ITR 158 were followed by the Assessing Officer and the Pr. CIT while 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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e authority concerned comes to the conclusion that the assessee is likely to defeat the demand, it may take recourse to coercive action for which brief reasons may be indicated in the order. (e) In exercising the powers of stay, the Authority should always bear in mind that as a quasi judicial authority it is vested with the public duty of protecting the interest of the Revenue while at the same time balancing the need to mitigate hardship to the assessee. Though the assessing officer has made an assessment, he must objectively decide the application for stay considering that an appeal lies against his order; the application for stay must be considered from all its facets and the order should be passed, balancing the interest of the assessee with the protection of the Revenue. The above guidelines are only illustrative and the authority concerned would have to have exercise his discretion in matters of stay on the facts of the case before him. (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contrary to the orders of appellate authorities ought to be stayed for the mere asking. Notwithstanding the above settled position in law, both the Assessing Officer in his order dated 29th January, 2019 and the Pr. CIT in his order dated 14th February, 2019 while rejecting the stay, choose not to deal/consider the submission on the above account made by the petitioner. However, Mr. Walve, learned Counsel appearing for the Revenue relies upon stand taken in the affidavit in reply filed by the Assessing Officer in the month of March, 2019 that the CIT(A) in the case of HDFC Property Fund has departed from the view taken by him in the petitioner's case on similar facts to hold that HDFC Property Fund is not entitled to the benefit of Section 10(23FB) of the Act. Thus, the issue is now open and not concluded in petitioner's favour. Therefore, the need to protect the Revenue. However, the above submissions ignores the fact that on 20th February, 2019 the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no response when confronted by the order of this Court in UTI Mutual Fund (supra) where the Officers of the Revenue have been directed that where the bank accounts have been attached, the recovery / withdrawal of the amounts from the such bank account should be done only after giving a reasonable notice to the party of the proposed withdrawal of the amounts from the attached bank accounts. Following the above course would cause no prejudice to the Revenue as the amounts continue to be attached and the assessee will not be able to withdraw the same. However, at the same time it gives an opportunity to the party to seek redressal, if any, available in law. In this case, the petitioner could have moved the Respondent No.2 Pr. CIT or the CIT for appropriate relief. Thereafter, during the hearing on 13th February, 2019 before the Pr. CIT, the petitioner is informed that the Assessing Officer has already issued a letter dated 12th February, 2019 to the 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 recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tances we pass the following order : ORDER (a) We set aside the order dated 29th January, 2019 of the Assessing Officer and order dated 14th February, 2019 of the Principal Commissioner of Income Tax. As the issue stands concluded in favour of the petitioner by the orders of the appellate authorities as existing today in the petitioner's own case, we grant an unconditional stay of the demand for Assessment Year 2015 16 under Section 220(6) of the Act till the petitioner's appeal against the order dated 20th December, 2018 before the CIT(A) is disposed of and for a period of two weeks from the communication of the order to the petitioner; (b) We set aside the notice dated 19th December, 2018 issued under Section 226(3) of the Act by the Assessing Officer to the petitioner's bankers and direct the Revenue to deposit the amount of ₹ 14.62 croers (in respect of Assessment year 2016 17) withdrawn from the petitioner's 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 t ..... 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