Nabajuga Educational and Charitable Trust, Khorda V. Union of India and others

WP(C)/9128/2025

AI Insights

The case involves M/s. Nabajuga Educational and Charitable Trust challenging a notice issued by the Department under Section 226(3) of the Income Tax Act, 1961, which froze the petitioner's bank accounts to recover a demanded amount. The dispute originated from the disallowance of certain depreciation claims by the petitioner, an organization benefiting from tax exemption under Section 11 of the Income Tax Act. The Assessing Officer's decision, which was contested at the Appellate Authority, led to the issuance of the notice for account attachment. The petitioner argued that the Assistant Commissioner lacked jurisdiction over the assessment order. The High Court refrained from addressing the jurisdictional issue due to the ongoing appeal and focused on whether the freezing of all bank accounts was justified.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 811205 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 30-04-2025
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S C MOHANTY
• Assessee Lawyers: JAGABANDHU SAHOO; KAJAL SAHOO
• Keywords: Appellate Authority; Assessment Order; Bank account freeze; Depreciation disallowance; Jurisdiction; Notice; Writ petition; Exemption provision
• Section: 11; 226(3)

Judgement Text

" Page 1 of 5 IN THE HIGH COURT OF ORISSA AT CUTTACK W.P.(C) No. 9128 of 2025 M/s. Nabajuga Educational and Charitable Trust, Khorda …. Petitioner -versus- Union of India and others …. Opposite Parties Advocates appeared in this case: For Petitioner : Mr. Jagabandhu Sahoo, Senior Advocate Ms. Kajal Sahoo, Advocate For Opposite Parties : Mr. S.C. Mohanty Senior Standing Counsel CORAM: HON’BLE THE CHIEF JUSTICE AND HON’BLE MR JUSTICE MURAHARI SRI RAMAN J U D G M E N T ------------------------------------------------------------------------------- Date of hearing and Judgment: 30th April, 2025 ------------------------------------------------------------------------------- HARISH TANDON, CJ. 1. The subject matter of challenge in the instant writ petition is the notice issued by the Department under Section 226(3) of the Income Tax Act, 1961, whereby and whereunder the amounts held Page 2 of 5 by the petitioner with several banks were freezed obviously in contemplation to recover and/or relax the amount quantified in the said notice. 2. Shorn of unnecessary details, the proceeding was initiated by the Department against the petitioner upon disallowing certain depreciation which it claimed as an organization who avails the benefit of the provision of exemption provided under Section 11 of the said Act. The proceeding ended at the domain of the Assessing Officer (AO) and the order is assailed by the petitioner before the Appellate Authority (AA). Undeniably, the said appeal is pending, meaning thereby the final adjudication has not been taken as of now. Amidst the pendency of the aforesaid proceedings, the notice of attachment to recover 20% of the total demand is issued, which according to the petitioner, is in excess of the powers conferred upon the authorities. 3. It is a specific stand taken by the petitioner in the instant writ petition that the Assistant Commissioner lags complete jurisdiction and powers to adjudicate upon the assessment order which is per se illegal, akin to a nullity. Page 3 of 5 4. We do not venture to enter into such arena as the statutory appeal filed by the petitioner is pending before the Appellate Authority and all such plea, which is either raised in the instant writ petition or otherwise available, both on facts and law, if agitated before the Appellate Authority, shall be considered and decided on its own merits. 5. We restrict our consideration in the instant writ petition on the amount of demand quantified in the said notice and whether such quantified amount can be sufficiently protected by interfering with the steps having been taken by the Department in freezing all the bank accounts of the petitioner. 6. We have been given a chart in course of the hearing at the behest of the petitioner, indicating the amount available in different bank accounts maintained by the petitioner in several banks. It admits no ambiguity in law that the authority cannot proceed to take action in excess of the demand by freezing all the bank accounts. The demand is already quantified in the said notice and, therefore, it is inconceivable that the authorities would attach the bank accounts which contain the balance much above the quantified amount covered under the said notice. We have given to understand that two Page 4 of 5 bank accounts, where the fixed deposits are maintained, would cater the said quantified amount demanded in the said notice and, therefore, there is no justification in attaching or freezing the operation of the other bank accounts. 7. We found that the fixed deposits with the Union Bank of India under the FD Nos.149613030000281 and 149613030000287 covering an amount of Rs.11,58,414.00 and Rs.14,54,146.00 as on 31st March, 2024 are sufficient enough to cater the quantified demand under the said notice. 8. Mr. Jagabandhu Sahoo, learned Senior Counsel on instruction from the learned Advocate on record for the petitioner submits that though the maturity amount of the aforesaid fixed deposits is shown as 31st March, 2024 but under the instruction of auto renewal, the same has been renewed and is still lying with the bank. 9. Going by the submissions advanced before us and believing the same to be correct and true instructions received by learned counsel for the petitioner, we therefore, direct the Department to issue instructions to the respective banks, where the accounts held by Page 5 of 5 the petitioner have been attached, to remove such attachments except to the extent that the aforesaid fixed deposits, mentioned hereinabove, shall remain attached and shall not be permitted to be withdrawn, until a specific order is passed by the Appellate Authority in the pending appeal. 10. With the above directions, the writ petition is disposed of. There shall be no order as to costs. (Harish Tandon) Chief Justice (M.S. Raman) Judge S. Behera Digitally Signed Signed by: SUMANTA BEHERA Designation: Senior Stenographer Reason: Authentication Location: High Court of Orissa, Cuttack Date: 01-May-2025 18:20:31 Signature Not Verified "