TMI Blog2022 (5) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... tion Ltd. [ 1991 (9) TMI 72 - SUPREME COURT] This Court considers that in the present case, the respondents have totally ignored the provisions of law, the judicial pronouncements of higher forum and the action of the respondents in not considering the appeal in time and even till date, is against the principles of natural justice, the requirement of law, fair play and therefore, the action of the respondents and the Revenue Authorities is violative of Article 265 of the Constitution of India. Accordingly, on perusal of the case in hand, apart from allowing the writ petition, this court further deems it appropriate to issue strictures to the effect that appropriate departmental action be initiated against the officers and authority concerned of the respodnent-Revenue who are involved in non-consideration of appeal of the petitioner in time as well as for not obeying and considering the judgments of the Apex Court, referred to above as well as the provisions of Section 220(6), 245 and the circulars of the department. The Chief Commissioner of Income Tax, Rajasthan, Jaipur, Udaipur, etc. is directed to apprise about pendency situation and statistics to the Rajasthan State Lega ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d a demand of Rs.2,09,44,100/- was raised under Section 156 of the IT Act as specified vide Annexure-2 3 against which the petitioner-assessee filed an appeal (Annexure-5) under Section 246 of the IT Act on 26/12/2019 in the prescribed form submitting that he has a prima-facie case and the demand raised is not maintainable. 2.1 On 13/01/2020, Income Tax Return for the Assessment Year 2018-2019 processed by the CPC Wing of the respondent-department and a refund of Rs.70,86,950/- due in favour of the petitioner-assessee was adjusted against the balance demand of Assessment Year 2017-18 created on 13/12/2019. The petitioner-assessee filed a Stay Application in response to intimation issued to him on 13/01/2020 under Section 245 of the IT Act in the form of a Note mentioned in the order dated 13/01/2020 (Annexure-6) which is reproduced as under:- 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/- was raised under Section 156 of the IT Act against the addition of Rs.2,51,98,421/- on 13/12/2019. The petitioner-assessee filed an appeal on 26/12/2019 which is pending adjudication with the department. He further submitted that no application for waiver of recovery and stay of demand was filed alongwith appeal. He further submitted that it was only on 22/02/2021 that an application under Section 220(6) of the IT Act for stay of demand was filed by the petitioner-assessee and thereafter, the respondents have passed an order of stay on the balance amount till disposal of the appeal before the Commissioner of Income Tax (Appeals). Therefore, the recovery made is within the four-corners of law and till filing of the stay application on 22/02/2021, the assessee was deemed to be in default and hence the recovery was made. 6. After considering the records of the writ petition, hearing arguments advanced by learned counsel for both the sides and also considering the judgments cited at bar, we observe as under:- (a) The Assessment Order under Section 143(3) of the IT Act was passed and the demand was raised under Section 156 of the IT Act simultaneously qua the Assessment Year 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or stay of demand which is reflected in letter dt. 22/01/2020 (Annexure-7). It is also reflected that the petitioner-assessee, in terms of departmental circulars, has voluntarily requested the department for adjustment of 20% of the demand to the tune of Rs.41,88,620/- from the refund and the balance amount to be refunded but it is analyzed that de-hors the provisions of Sections 245, 220(6) of the IT Act the respondents have suo-motu adjusted the entire amount of refund to the tune of Rs.70,86,950/- qua the Assessment Year 2018-19 on 13/12/2020 making the provisions of Sections 220(6) and 245 of the IT Act, referred to above, as an empty formality. (e) Further, the prejudice against the petitioner has been taken in violation of the principles of natural justice. The high handed action of the respondents is also reflected in bye-passing the said application for the Assessment Year 2019-20 as refund of Rs.32,32,662/- was again suo-motu adjusted on 25/02/2020 by e-passing the fact of filing of appeal as well as the provisions of Section 245 of the IT Act. The petitioner, in support of his erstwhile application for stay dated 22/01/2020, again filed a stay application which a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cise, Range-III, Kota Ors. (DB Civil Writ Petition No.1891/2013) connected matters decided by Rajasthan High Court at Jaipur Bench, Jaipur on 01/03/2013; Skyline Engineering Contracts (India) P. Ltd. Vs. Deputy Commissioner of Income-tax: (2021) 132 taxmann.com 158 (Delhi) and Jet Privilege (P.) Ltd. Vs. Deputy Commissioner of Income-tax: (2021) 131 taxmann.com 119 (Bombay), it is held that under Section 245 of the IT Act, the recovery can only be initiated after giving an intimation in writing to the assessee of the action that he proposes to take under this Section. Not following the mandatory requirement of intimation under Section 245 of the IT Act and also not following the principles of natural justice, is illegal, without authority and unjustified. (h) Further, the series of judgments, referred above, have categorically held that when an appeal of the assessee is pending and the same is not disposed of for the reasons beyond his control, on account of autocratic, lethargy and administrative constraints on the part of the respondents, the recovery of demand pending appeal will be an act in terrorem . (i) Learned counsel for the respondent-Revenue was not able to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e only intended to curb a tendency in revenue matters which, if allowed to become widespread, could result in considerable harassment to the assesses-public without any benefit to the Revenue. We would like to say that the department should take these observations in the proper spirit. The observations of the High Court should be kept in mind in future and the utmost regard should be paid by the adjudicating authorities and the appellate authorities to the requirements of judicial discipline and the need for giving effect to the orders of the higher appellate authorities which are binding on them. 8. In these facts and circumstances, placing reliance upon the judgment rendered by the Apex Court in Kamlakshi Finance Corporation Ltd. (supra), the ratio of which is reproduced herein above, this Court deems it appropriate to allow the present writ petition on account of aforesaid discussion and findings and directs the respondent-Assessing Officer and other respondents to issue a refund to the petitioner-assessee alongwith interest as specified in law adjusted by them in excess of 20% of the disputed demand for Assessment Year 2017-18 within a period of thirty days from the date of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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