M/s. Unique Engineering Enterprises Pvt. Ltd. V. Assistant Commissioner of Income Tax

WP/1728/2025

AI Insights

The case involves a writ petition filed by the petitioner challenging the garnishee notices issued by the Income Tax Department, which attached the petitioner's bank accounts due to alleged dues for the assessment year 2022-23. The petitioner had already filed appeals and a stay application against the assessment and penalty orders, which were still pending. The court considered previous similar cases and the principle that coercive actions should not be taken while appeals and stay applications are pending. The court ruled in favor of the petitioner, emphasizing the need for the authorities to resolve the stay application and appeal expeditiously before taking further coercive actions.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 690517 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 23-01-2025
• Assessment Year: misc
• Other Referred Cases: W.P.No.30496 of 2021, W.P.No.1673 of 2022
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Applicant
• Court: HIGH COURT
• Department Lawyers: MS J SUNITHA JR SC FOR INCOME TAX
• Assessee Lawyers: MS K PRABHABATI ADVOCATE
• Keywords: Bank Account Attachment; Garnishee notice; Income tax assessment; Penalty order; Stay Application
• Section: 226(3)

Judgement Text

"I l l l i I i IN THE HIGH COURT FOR AT HYDERIB1fE OF TELANGANA (Special Originat Jurisaictionl THURSDAY, THE TWENry THIRD DAY OF JANUARY TWO THOUSAND AND _rVrV}rVC ''\"^' PRESENT THE HONOURABLE SRI J-USTICE P. SAM KOSHY THE HoNoURABLE S RI .IusncA[?TvTAvARAP U RAJ ES HWAR RAo [ 34sl J ...PETITlONER WRIT PETIT]ON NO:1728 0F 2025 Between: AND #hT+pffifli jift1[:{f,-Li',n[i;';#ilih::ir,,T\"#{tufrit* 'Sill\"g\"$fl#,1.rrTriill,\".:#I*:*\",m#iltl.n':+.[f lfii{,,.,. , fi;?::ii$r#1, tncome rax Department, Ministry of Finance, Government 3 S8fililnissioner of lncome Tax (Appeats),Nationat Facetess Appeat centre, t H\"'i.? 33J,1; S?lB#': 3rg5g,'%,f# jl?', ra ra d i se c i rc re, s a roj in i De vi 'l?'.?,';,ft \"[?'#;l1nl#s,Jfi:86.;rr*rijl,;,jfl:l,oppJunaNasar, '*i*1\"*,:tif :HH'oT#3',\",IJSbU,t?A,\"1'&:jgl[*iy;=u\",I,,y,ff , ...RESPONDENTS Petition under Articre 226--of the constitution of rndia praying that in the circumsrances stated in tne amJariiJi;;'ftHilh, the High court may be pleased to issue a writ, direction o,. ori\"i ,ioiu\"pl.ti\"rrray in the nature of i writ or mandamus decraring the action or n\"rpo,io!ii''r.ro. r in attaching the bank accounts of the petition\", ly^i..:yin&rr\"i!t.\" ru.trces u/s.226(3) of the Act ail dated 08-0 1 -2025 bearino pLI tq ireA/coiliFlii)Lozo-zs r,, o, 1 e7 536 1 (1 | ( N c Nos' 50200012s80186 ,ia +zzsooob!;;;;;rffi;d with Responoent No.'+1, DIN No. rrBA/coM/F/17t2o24-25t1o71e82e63(1) (A/c No -1?19-9?9.01^6j4 maintained with Respond\".,t- No' 5) and OiU r'to ITBA/COM/F/1 712024- 25t1071g75417(1) (A/c No.. -ozosszo)eql and 33646441970 maintained with n\"rJonJ\"nt ruo. 6) ior t\"\"o,\"|.y of dues forthe1Y' 2022'23 during the pendency oftheappealsandstayrppti\"utlonbeforetheRespondentNo3asbeingillegal' \"roiiirrv,'*iinout authoriif oiiaw, viotative. of Article 14 and 19(1Xg) of the Constitutionoflndia,no,uioruti,\",ofprovisionsof.lncomeTaxAct,l96land' \"*.\"q;Lntrv, direct ResponJ\"nt r.ro. r to unfreeze the bank accounts forthwith. IA NO: 10F 2025 PetitionunderSectionlSlcPCprayingthatinthecircumstancesstatedin the affidavit filed in support of the peiition, ine nign Court may be plea.sed to ;#;;; operation oi earnisf,ee irtotices issued u/s.226(3) of the Act all daled oe-5i-z-gis bearing DtN No. ITBAJC6M/F/1 712024-2511071975361(1) (A/c Nos' iOZOOOrZSaOf86 Jnd 422560005551 maintained with Respondent No.4), DIN r.rl.liarucoN,l tFt1712024-;511071982963(1) (a/9 N9 131805001664 maintained *itr, n.rponaent No. Sl ano orN No. tieA/col/lFt17l2o24-2511071975417(1) (A/c Nos. 62053702847 uno ieo+o++ts70 maintained with Respondent No. 6) for i\"\"or\"ry of dues for the AY. 2022-23 ' Counsel for the Petitioner: Ms. K' PRABHABATI REP' FOR SRI A.V. RAGHU RAM Gounsel forthe Respondent No.1 & 3: Ms' J' SUNITHA' JR. SC FOR INCOME TAX Counsel for the Respondent No.4 to 6: - ''- The Court made the following: ORDER THE HONOURABLE SRTJUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE NAMAVARAPU RAJESHWAR RAO W.P.No.1728 OF 2025 ORDER; @er Hon'ble Sri.Iustice p.Sam Koshy) Heard Ms. K.Prabhabati, learned counsel representing Mr. A. V.Raghu Ram, leamed counsel for the petitioner and Ms. J.Sunitha, learned Junior Standing Counsel for Income Tax for respondents Nos. 1 to 3. Perused the record. 2. The challenge in the present writ petition is to the action on the part of respondent No.I in using gamishee notices dated 08.01.2025 attaching the bank accounts of the petitioner bearing DIN No.ITBA/COM/Ftt7/2024-25/tO7Igt536t(t) (Nc Nos. 50200012980186 and 422560005551 maintained with respondent No. 4), DIN No. ITBA/COM/F|I7|2O24- 2511071982963(l) (Nc No.131805001664 mainrained with respondent No. 5) and DIN No.ITBA/COM/F/1712024- 25/1071975417(l) (Nc Nos. 62053702847 and, 3364644t970 maintained with respondent No.6). The said garnishee notices seems to have been issued pursuant to an assessment order for the 2 assessment year 2022-23 and the order of assessment is dated 27.03.2024 and a subsequent penalty order dated 17'09'2024 has been passed. Being aggrieved by the assessment order and the order of penatty passed by respondent No'2' the petitioner herein had preferred two appeals before respondent No'3 on 18'04'2024 atong with a smy application' Both the appeal as well as the stay application is stitl pending consideration before respondent No'3' Meanwhili, the respondents have now issued the said impugned garnishee notlces. 3. The learned counsel for the petitioner submits that in the event if the garnishee notices are not set aside at this juncture' the petitioner would be put to substantial inconvenience so far as operating the business is concerned' Further' the fact that the right to appeal having been availed by the petitioner' the respondents should not have invoked coercive steps in between' 4. The leanled counsel for the petitioner relied upon a couple of decisions of the Division Bench of this High court decided in the recent past i.e., order passed in W'P'No'30496 of 2021 decided on 03.01.2022 and also the order passed in W'P'No 1673 of 2022 3 decided on 17.01 .2022 wherein under similar set of circumstances, the Division Bench had granted interim protection while disposing of the writ petitions directing the respondent-authorities to decide the appeal and stay application first before initiating proceedings issuing gamishee notice. 5. l{aving heard the contentions put-forth on either side and the facts and circumstances of the case, particularly taking note of the fact that challenging the order of assessment dated 27.03.2024 as also rhe order of penalty dated. 17.09.2024, the petitioner had irnmediately preferred appeal along with the stay application. Both the appeal as well as the stay application is still pending consideration before respondent No.3. Even in the stay petition, more than I 0 months have passed, till date the same has not been decided neither is there any progress in the appeal. 6. In the said circumstances, when the petitioner has availed his right of appeal along with the petition for grant of stay, it was incumbent upon the authorities to take up the stay application and decide the same at the first instance or decide the appeal itself as expeditiousty as possible rather than sitting over the appeal on the 4 one hand and at the same time initiating steps for getting the order of assessment and the order of penalty being executed by resorling to coerclve steps. 7. For the said reason, we are the considered opinion that the impugned garnish notice dated 08.01 .2025 to the aforesaid extent is not sustainable and the same deserves to be and is, accordingly' set aside. The respondents are directed to take up the appeal as well as the stay application at the first stance and thereafter proceed in accordance with law. 8. The writ petition is, accordingly, disposed of. There shall be no order as to costs. Consequentll,, miscellaneous petitions pending, if any, shall stand closed. SD/-A.V,S. PRASAD ASSISTANT REGISTRAR //TRUE COPY// \"t TtON OFFICER To,1. Assistant Commissioner of lncome Tax, Circle B(1)' Signature Tg*gE' ' $.N;sii'l of Kondapur, Sv.No.37(P) of Kothaguda, opp' B-otanical Gardens' 6liiri\"b:i*oiitv iut- h.n. Distrlct, Hvilerabad' Telangana - 500084' 2. X;;\"];;[iu'nii, i'ncom. Tax Depdrtment, Ministry of Finance' Govemment of lndia, New Delhi c#;G;i;.;oi tn\"om\" Tax (Appeals),National Faceless Appeal Centre' Delhi, [b-Fb ernk, Usha Kiran Complex, GR Floor, Paradise Circle, Sarojini Devi Road, Secunderabad - 500003, Telangana. iCtCt 'eink, plot No.13, H.No.10-29/15Subhash Nagar, Opp. Juna Nagar, Kushaiouda. Kapra, R.R. District - 500062' Telangana. SA; g\"\";fti inEii, uoAi square, Plot No.3tu3B:cFC Phase V, EC Nasar X Roads, Cherlapally, R.R. District - 50005't ' one Cb to SRi R.V. RAGHU RAM, Advocate [oPUC] One CC to Ms. J. SUNITHA, JR. SC FOR INCOME TAX [OPUC] 3 4 5 6 7 I I Two CD Copies BN BS FT HIGH COURT DATED:2310112025 ORDER WP.No.1728 ot 2025 DISPOSING OF THE WRIT PETITION WITHOUT COSTS :-:_-:: t i-. -'l' u--i ,:i i.,, lr.l, l. ' , u3 i ::SPI c{,?'b Y4. 1.w $ "