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TMI Blog2019 (9) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... assessing officer was not processing the return of the petitioner, the petitioner had previously approached this Court by filing Writ Petition No.2146 of 2018 which was disposed of by an order dated 1.10.2018. In the context of the grievance of the petitioner that the return was not being processed promptly, the Court made the following observations in the said order: "7. The communication, copy of which is at Annexure-A makes interesting reading with regard to assessment year 2016-2017. It is solemnly stated that the return for this assessment year has been processed but it is pushed to what is stated as and styled as the Centralized Processing Center. That is stated to be forwarded for computation. 8. We fail to understand as to why somebody who is incharge of making and framing assessment, namely, the Assessing Officer can process the return and ordinarily empowered to finalize it as well but must forward it or push it to this center for computation. If computation such a difficult, if not an important task, why it cannot be performed by this Assessing Officer, is not clarified to us at all. It is evident that, after it is pushed to this center, from the centre's communicati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt. However, under section 245 of the Act, the competent authority has right to claim the set-off of such refund against any tax remaining payable even if it arises out of any other assessment year. Under section 281B of the Act, the competent authority subject to following proper procedure also has a power to provisionally attach any property of an assessee to protect the interest of the revenue under certain circumstances. The refund would undoubtedly be covered within the said expression - any property belonging to the assessee. We would take a closer look at those sections later. 5. For the time being, we may record that the respondents while intimating the processing of the return under section 143(1) of the Act, appended a following note to the said communication: "NOTE:- As per the records of CPC, the following demands are outstanding. An intimation under Section 245 of the Income Tax Act, 1961 has been issued separately proposing to adjust the outstanding demands against the refund determined as per this order. Since, the release of the refundable amount will be considered on the basis of your response/compliance to the Intimation U/s 245, you are requested to submit you ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d was not released arising out of intimation on the ground that previous tax demands were outstanding. When it was pointed out that these demands were stayed by the Tribunal, the authorities invoked the power of provisional attachment under section 281B of the Act, without there being any justifiable reason. 11. On the other hand, the learned Counsel Shri Mohanty submitted that when the High Court previously ordered expeditious processing of the petitioner's return under the order dated 19.10.2018, it was clarified that the High Court has not examined the merits of the petitioner's claim of refund. He submitted that the demands are stayed by the Tribunal for various assessment years without entering into the merits of the assessments which were confirmed by the appellate Commissioner. He submitted that a scrutiny assessment of the petitioner's return for AY 2016-2017 would be over shortly. In this year also, there is every likelihood of sizeable tax demands arising in relation to the petitioner's international transactions and other issues which are already examined in the earlier assessment years. The department is, therefore, justified in carrying a bona fide belief that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... und is due and payable. This provision thus, could have been applied if the tax demand was due and recoverable from the petitioner. In the present case, admittedly, all such tax demands were suspended by the Tribunal. Enabling the department to adjust such tax demands against the petitioner's refund would amount to overreaching the interim orders passed by the Income Tax Appellate Tribunal. As long as the stay against the recoveries was in operation issued by the competent appellate authority, Tribunal or Court, it would not be open for the department to enforce the recoveries through the aid of section 245 of the Act. Perhaps, it was not necessary for us to elaborate on this since advisedly, the department has given up this line of action for refusing refund to the petitioner. 15. These brief comments were however, necessary since the department seeks to press in service the power of provisional attachment under section 281B of the Act and in context of which, the Counsel for the department has taken us through the nature of interim orders passed by the Tribunal. Section 281B of the Act pertains to provisional attachment by the revenue in certain cases. Subsection (1) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom carrying out a recovery. He emphasized that what the Tribunal has stayed is recoveries and not the orders. 18. Even if it were to be believed that by going by his previous assessments, the assessing officer is most likely to confirm the demands while carrying out the final assessment of the petitioner's return for the AY 2016-2017, we cannot lose sight of the fact that the demands for the previous assessments have been stayed by the Tribunal. The Tribunal has given reasons why it was persuaded to pass such interim orders. It is not possible for us to dissect the reasons of the Tribunal and come to the conclusion that in the final analysis, such demands would be confirmed. Permitting the department to provisionally attaching the petitioner's refund for the current year on the ground that in the final assessment, the demands are likely to be confirmed, would amount to ignoring the hard fact that for the earlier assessment years, the Tribunal has suspended the recoveries arising out of the demands made by the assessing officer on similar issues. It may be that before doing so, the Tribunal has either put the petitioner to some terms or has found itself satisfied that the deposits ..... X X X X Extracts X X X X X X X X Extracts X X X X
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