Dr. Pulla Rao Pentapati V. Income Tax Officer Ward 11(1), Hyderabad and Principal Commissioner of Income Tax-2 and Canara Bank, Khan Market Branch

WP/41271/2022

AI Insights

Dr. Pulla Rao Pentapati filed a writ petition challenging the order dated 27.10.2022 issued by the Income Tax Officer, which revoked a previous stay on a tax demand and froze his bank accounts. The petitioner argued that the order was arbitrary, illegal, and violated principles of natural justice. The court found that the petitioner had complied with the conditions of the stay order by depositing a significant amount and that the continued freezing of his accounts hindered his ability to comply fully. The court's decision to set aside the impugned order was based on the principles of justice and the need to allow the petitioner to access his funds to meet his tax obligations.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 797549 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 26-09-2023
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: K MAMATA; M V KINI
• Assessee Lawyers: D V SRINIVASA RAO
• Keywords: Bank account freeze; Fixed deposits; Income Tax; Jurisdiction; Natural Justice; Writ of Certiorari
• Section: 151 CPC

Judgement Text

"HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY SIXTH DAY OF SEPTEMBER TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE LAXMI NARAYANA ALISHETTY WRIT PETITION NO: 41271 OF 2022 [ 3386 ] Aged Rao Between: Dr. Pulla Rao Pentapati, S/o Late Gangaraju Pentapati, Occ- Business, aboul 74 years, Near Officers Colony, Satya Sadan, HIG A-9 DR AS Nagar, Secunderabad, Hyderabad-500062. ...PETITIONER AND 1 lncome Tax Officer Ward 11(1), Hyderabad Signature Towers, Sy.No.6(P) of Kondapur, Sy.37(P) of Kothaguda, Opp. Botanical Gardens, Serlingampally (M), R.R.District, Hyderabad, Telangana, 500084 Principal Commissioner of lncome Tax-2, Signature Towers, Opp. Botanical Gardens, Kondapur, Hyderabad-500084 Canara Bank, Khan Market Branch, Khan Market, New Delhi. (Respondent No 3 is impleaded as per Court Order dated 04.07.2023 in WP No.41271 of 20221 ...RESPONDENTS Petition under Article 226 of the Constitution of India praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue an appropriate writ, order or direction, preferably in the nature of a Writ of Certiorari calling for the records relating to the impugned letter/order (show cause) bearing DIN and Letter No. lTBAlRCVlFllTl2O22- 2311046490632(1) dated 27.10.2022 issued by the Respondent No.'l , which is without jurisdiction/ power, arbitrary, illegal, against the principles of natural justice and the sarire is liable to be quashed by this Hon'ble Court by further directing the Respondent No.1 to lift the attachment Orders issued to Syndicate Bank (now Canara Bank), Lok Nayak Bhawan, New Delhi-110003 as well as to 2 3 lndian Overseas Bank, Basheerbagh, Hyderabad-500029 in order to enable the Petitioner to immediately break the Fixed Deposits of the required amount of Rs 42,43,836 liable to be paid to The lncome Tax Department towards the 2Ooh of the outstanding demand as directed by the Respondent No.2. lA NO: 1 OF 2022 Petition under Section '1 51 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to stay the operation of the impugned letter/order bearing DIN and Letter No. ITBA/RCV/F/1712022-2311046490632(1) dated 27.1O.2022 issued by the Respondent No.1, pending the disposal of the main writ petition. Counsel for the Petitioner: SRI D.V.SRINIVASA RAO Counsel for the Respondent No.1 & 2: M/s. K.MAMATA, SC FOR IT DEPT. Counsel for the Respondent No.3: M/s. M.V.KlNl The Court made the following: ORDER TH[], HON'Bt,E SItI JUSTICE P.SAM KOSHY AND THE HON'I}LE SRIJUSTICB LAXMI NARAYANA AT,ISHETTY WRIT PETITION No.41271 of2O22 OR-DER:tpcr llon ble Sri ,.lustrtc P.SAM KOSHY) [{eard Mr.D.V.Srinivasa Rao, leamed counsel for the petitioner and Ms.K.Mamata, learned counsel, leamed Standing Counsel for the respondents. Perused the matcrial on record. 2. 'l'he instant writ perition has becn filed assaiting the order dated 27.10.2022, rvhercbl. the I'r respondent has revoked the stay order earlier grantcd on 10.02.2()?l by the 2n'j respondent. .1. 'Ihe 2nd responilent rvhilc grantillg stay on the clemand of- Rs.43,40,,5771- had orclcied rlre asscssee to pay an amount of rupees 20%o of the demarrci i.e.. arr amount of Rs.l ,08,68,1 i 5/- on or before ?5.03.2022- The itetitioner seems ro have f-ailed to deposit the saici amount of Rs.1,08,68,1 l 5/- i.e., 20oto of the total demand raised, which was rhe pre-condition while gr.anting stay by the 2\"r respondent. 4- It is pertinent to tal(e note of tl-re fact that when the stay w,as granted, the respondenr aulhorities have already recovel.ed Its.61.77,309/- lrom the bank account of tlrc :r:;:;cssec, l-hcrc was onh a balance amount of Rs.46,90,t106r' u,hich r,vas lcti ro hc dcposired b.r, .r 2 the assessee towards the compliance of the stay order on or before 25.03,2022. The petitioner since he could not deposit the balance of Rs.1,08,68,115/- on or before 25.03.2022, he immediately entered appearance before the respondent authorities vide correspotrdence dated 26.03.2022, wherein he sought lor additional time for depositing of the balance amount and requested to un-freeze the fixed deposits which was freezed by the respondents, enabling him to comply with the condition put by the 2nd respondent while granting stay. 5. The petitioner reiterated the said request again vide conespondence dated 16.08.2022, wherein he has given an undertaking that subject to the respondents un-freezing the bank account, he would deposit the balance amount towards compliance of the stay order within seven days. There was no respollse to the said corespondence by the authorities nor was the bank account un- freezed. The bank account still stands frozen and the petitioner is not in a position to utilize the same. 6. Today, leamed counsel for the petitioner further makes a statement that subject to the respondents un-freezing the bank account and the fixed deposits which are lying in the name of the petitioner, he shall ensure that the balance of amount towards compliance of the interim order granted by the 2\"d respondent on 10.02.2022 shall be complied 3 , l I I with within seven days. In addition, the leamed counsel for the petitioner also submits that at the time of un-freezing the bank account, the respondents itself may en-cash the fixed deposits to the extent of the balance of payment towards the compliance of the interim order is concemed and release the remaining amount and further permit the bank account to be operated by the petitioner. 7. The leamed counsel for the petitioner submits that though the appeal has been filed on27.10.2021 no further progress has been made on the said appeal. 'l-ilt date he has not received any notice by the appellate authority in respect of the hearing on the appeal is concerned. However, we are of thc consiCered opinion that enrjs of justice would meet if the impugned order passed by the l't respondent on21 .10.2022 is set asidelquashed. 8. Accordingly, this writ petition stands allowed by setting aside the impugned order dated 27.10.2022 issued by the l.trespondent. The lsl and 2\"d respondents are directecl to instruct. the 3d respondent bank to permit the petitioner to operate the said bank account of the assessee with a fuither direction that the respondents would be permitted to en_ cash the balance .f amount payable by the petitioner towards the compliance of the interim order granted on 10.02.2022 and further ( {' I 4 release the balance of amount to be operated bi, 16\" petitioner including the fixed deposits. 9. The 1't respondent is directed to communicate the order of this Court to 3'd respondent - bank. Meanwhile, we are also of the considered opinion that since the appeal of the petitioner is pending before the National Faceless Assessment Center (for shorl NFAC) since 27.10.2021, with no furlher progress, it is expected that the appeal of the appellant shall be taken up and decided at the earliest. The petitioner is also directed to ensure that the order passed by this Court in the present writ petition is uploaded in the petitioner's portal of NFAC in whichthe appeal has been filed and which, the petitioner alone has access. 10. As a sequel, miscellaneous applications pending if any in this writ petition also shall stand closed. No order as to costs. SD/. K. VENKAIAH //TRUE copy, ASSISTANT REGIqTRAR ro, sEcfloN oFFIEER 1 . The Income Tax Officer Ward 1 1(.1 ), Hyderabad Signature Towers, QV.No.6(P) o_f t^