NIRAAMAYA RETREATS PVT. LTD., V. ASSISTANT COMMISSIONER OF INCOME TAX,

WP(C)/9426/2020

AI Insights

The case involves Niraamaya Retreats Pvt Ltd, which contested an order of assessment under the Income Tax Act. The petitioner initially appealed to the 2nd respondent, the Commissioner of Income Tax (Appeals), and sought a stay of recovery from the 1st respondent, the Assistant Commissioner of Income Tax, which was partially granted. Dissatisfied with the conditions of the stay, the petitioner filed another petition, which was not favorably resolved. Subsequently, the 1st respondent dismissed a further application based on the earlier decision. Meanwhile, the respondents initiated garnishee proceedings, leading to the attachment of the petitioner's bank accounts and withdrawal of a significant amount towards the tax liability. The High Court's intervention was sought to lift these attachments and stay further recoveries until the appeal was decided.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 691789 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 07-04-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: V V ASOKAN; V V NAMBIAR
• Keywords: Assessment Order; Bank Account Attachment; Garnishee proceedings; Income Tax; Stay of recovery
• Section: 220(6)

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT: THE HONOURABLE MR. JUSTICE A.K. JAYASANKARAN NAMBIAR & THE HONOURABLE MR. JUSTICE SHAJI P. CHALY TUESDAY, THE 7th DAY OF APRIL, 2020/18th CHAITHRA, 1941 W.P.(C). No.9426 OF 2020 PETITIONER: Niraamaya Retreats Pvt Ltd, Pulinkudi Mullur P.O Kovalam, Thiruvananathapuram – 695527, Represented by its Chief Financial Officer - Mohan D Aiyar By Adv. Sri. V. V. Asokan (Sr.) Adv. Sri. V. V. Nandagopal Nambiar RESPONDENTS: 1. Assistant Commissioner of Income Tax, Officer of Assistant Commissioner of Income Tax Aayakar Bhavan, Ist FloorKawdiar P.O, Thiruvananathapuram – 695003 2. Commissioner of Income Tax (Appeals), Office of the Commissioner of Income Tax (Appeals), Aayakar Bhavan, 2nd Floor, Kawdiar P.O, Thiruvananathapuram – 695003 3. Principal Commissioner of Income Tax Office of the Principal Commissioner of Income Tax, Aayakar Bhavan, 3rd Floor, Kawdiar P.O, Thiruvananathapuram – 695003 4. HDFC Bank Limited,Kenton Towers, DPI, Near Kalabhavan Theatre, Vazhuthacaud,Trivandrum, Kerala 695014 Represented by its Branch Manager WP(C). No. 9426 OF 2020 2 5. Andhra Bank RBTowers, Azhakulam,Muttackad, Trivandrum,Kerala 695014 Represented by its Branch Manager 6. State Bank of India Fathima Building, Pachalloor Road, Vizhinjam, Trivandrum,Kerala 695521 Represented by its Branch Manager By Sri. Christopher Abraham, SC, Income Tax Department This Writ Petition having come up for admission on 07/04/2020, the Court on the same day passed the following:- WP(C). No. 9426 OF 2020 3 A.K. JAYASANKARAN NAMBIAR, J. & SHAJI P. CHALY, J. ------------------------------- WP(C). No. 9426 OF 2020 ----------------------------------- Dated this the 7thday of April, 2020 J U D G M E N T A.K. Jayasankaran Nambiar, J. Against an order of assessment under the Income Tax Act, the petitioner preferred an appeal before the First Appellate Authority, the 2nd respondent herein, and during the pendency of the appeal, the petitioner also approached the 1st respondent with a petition under Section 220(6) of the Income Tax Act for a stay of recovery pending disposal of the appeal. It would appear that the 1st respondent, on the application preferred by the petitioner, granted a stay of recovery of the amounts confirmed by the assessment order, on condition that the petitioner paid an amount equal to 20% of the tax demand. Not satisfied with the same, the petitioner preferred a fresh petition under Section 220(6) before the 1st respondent. The said petition however did not result in any favourable order to the petitioner. It is the case of the petitioner that, although he thereafter approached the 2nd respondent with a stay petition seeking for a stay of recovery pending disposal of the appeal, the same was not considered by the 2nd respondent, and instead, the 1st respondent dismissed the said application in the light of the earlier order passed by him. The petitioner would submit that the 2nd respondent Appellate Authority has WP(C). No. 9426 OF 2020 4 since heard the appeal on 5.3.2020, and orders are awaited in the appeal. In the meanwhile, however, the respondents initiated garnishee proceedings and attached the bank accounts of the petitioner maintained with respondents 4 to 6 banks. It is also stated that an amount of Rs.1,51,00357/-was withdrawn from the said accounts towards the tax liability of the petitioner. We are told that the amount of Rs.1,51,00357/-represents approximately 11% of the tax demand confirmed against the petitioner. The prayer in the writ petition, at this stage, is essentially for a lifting of the attachment orders over the bank accounts of the petitioner maintained with respondents 4 to 6 banks, and to stay further recovery proceedings till such time as final orders are passed by the 2nd respondent in the appeal pending before him. 2. We heard Sri.V.V.Asokan, the learned senior counsel duly assisted by Sri.Nandagopal Nambiar, the learned counsel for the petitioner and also Sri.Christopher Abraham, the learned Standing Counsel for the respondents. 3. On a consideration of the facts and circumstances of the case, as also the submissions made across the bar, we find that inasmuch as the respondents have already recovered an amount of Rs.1,51,00357/- from the petitioner through garnishee proceedings, and the appeal preferred by the petitioner against the assessment order has been heard finally by the 2nd respondent Appellate Authority, who is expected to pass orders in the appeal in the near future, there need not be a further recovery effected from the petitioner at this stage. Accordingly, while upholding the recovery already effected by the respondents for the time being, we deem it to be sufficient for safeguarding the interests of the revenue pending disposal of the appeal by the 2nd respondent. WP(C). No. 9426 OF 2020 5 4. Accordingly, the writ petition is disposed, by directing the respondents to lift the attachment over the bank accounts of the petitioner maintained with respondents 4 to 6 banks forthwith, with a further direction to the 2nd respondent to pass final orders in the appeal within an outer time limit of two months from the date of receipt of a copy of this judgment. It is also made clear that till such time as orders are passed by the 2nd respondent, as directed and the order communicated to the petitioner, further proceedings for recovery of amounts confirmed against the petitioner by the assessment order in question shall be kept in abeyance. The petitioner shall also be permitted to operate the bank accounts maintained with respondents 4 to 6 during the said period. The writ petition is disposed as above. (Sd/-) A.K.JAYASANKARAN NAMBIAR JUDGE (Sd/-) SHAJI P. CHALY JUDGE prp/7/4/2020 "