NTPC LIMITED V. COMMISSIONER OF INCOME TAXTDS

CWJC/19071/2010

AI Insights

The case involves NTPC Limited, a public sector undertaking, which challenged the coercive recovery actions and bank account attachment by the Assessing Officer under the Income Tax Act. The dispute arose from assessments for the financial years 2004-2005 and 2008-09, where NTPC appealed the assessments but sought a stay on recovery under Section 220(6) of the Income Tax Act, pending the appeal's outcome. The Assessing Officer's failure to decide on the stay application before proceeding with recovery actions led NTPC to file this writ petition under Article 226 of the Constitution.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 686789 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 01-12-2010
• Assessment Year: misc
• Other Referred Cases: R.P.David v. Agri. I.T.O., Seth Gopaldas Paliwal v. W.T.O., Pawan Kumar v. I.T.O., Dr. T.K.Shanmugasundaram v. CIT, Valvoline Cummins Ltd. v. Deputy CIT, Hotel Raj Palace v. Commissioner of Income Tax, Bhagalpur, Dunlop India Limited (No.1) v. Asstt. Commr. of I.T., K.M. Rahmath Bibi v. First Inc.-Tax Officer, Paulsons Litho Works v. I.T.O.
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: ARCHANA SINHA; HARSHWARDHAN PRASAD
• Assessee Lawyers: VIKASH JAIN; RAKESH SINGH
• Keywords: Assessment Order; Attachment of bank account; Coercive Recovery; Income Tax; Stay of recovery
• Section: 220(6)

Judgement Text

" IN THE HIGH COURT OF JUDICATURE AT PATNA CIVIL WRIT JURISDICTION CASE No.19071 of 2010 ==================================================== NTPC Limited, a Government of India Undertaking having its Power Project at Barh known as Barh Super Thermal Power Project, P.O. NTPC Campus, Barh, P.S. Pandarak in the town of Barh in the District of Patna through its Executive Director Sri Janardhan Kar, son of Sri Niranjan Chandra Kar, aged about 54 years, residing at Field Hostel, NTPC Campus, Barh STPP, P.O. NTPC Campus, P.S. Pandarak in the town of Barh in the District of Patna. …. …. Petitioner Versus 1. Commissioner of Income Tax (TDS), Patna. 2. Commissioner of Income Tax (Appeals)-II, Patna. 3. Assistant Commissioner of Income Tax, TDS Circle, Patna. 4. The Branch Manager, State Bank of India, Boring Road Branch, Patna. 5. Union of India through the Secretary, Department of Revenue, Ministry of Finance, Government of India, Central Secretariat, North Block, New Delhi- 110 001. …. …. Respondents ==================================================== Appearance : For the Petitioner: Mr. Vikash Jain, Senior Advocate with Mr. Rakesh Kumar Singh, Advocate For the Respondent: Mrs. Archana Sinha, Advocate with Mr. Harshwardhan Prasad, Advocate ==================================================== CORAM: HONOURABLE THE CHIEF JUSTICE and HONOURABLE MR. JUSTICE JYOTI SARAN ORAL ORDER (Per: HONOURABLE THE CHIEF JUSTICE) 3. 1.12.2010. With the consent of the learned Advocates the petition is heard and finally decided today. The petitioner, NTPC is a public Sector Undertaking of the Union of India. Feeling aggrieved by the order of attachment of the bank account made by the Assessing Officer, the petitioner-the assessee has preferred this petition under Article 226 of the - 2 - Constitution. The subject matter of dispute is the assessment made by the Assessing Officer, the Assistant Commissioner of Income Tax for the financial years 2004-2005 and 2008-09. Against the order of assessment made by the Assessing Officer the petitioner has preferred appeals before the Commissioner of Income Tax (Appeals). Pending the appeals, the petitioner made application under Section 220(6) of the Income Tax Act to the Assessing Officer to stay the recovery till the appeals pending before the Commissioner of Income Tax (Appeals) are heard and decided. It is the grievance of the petitioner that while the application made under Section 220(6) of the Act was pending before the Assessing Officer, without awaiting for the appeals to be heard and decided, the Assessing Officer proceeded further to make coercive recovery of the demands raised by him. The petitioner has filed this petition to challenge the action of coercive recovery and attachment of bank account by the Assessing Officer. Learned Advocate Mr. Vikash Jain has appeared for the petitioner. He has submitted that Section 220(6) of the Act is a statutory remedy available to an assessee to seek stay of the order of assessment pending the appeals before the appellate authority. It is the statutory duty of the Assessing Officer to hear the assessee and decide the application made under Section 220(6) of the Act. In the present case though the applications are pending, repeated reminders are given to the Assessing Officer, without deciding the applications pending before him the Assessing Officer has resorted to - 3 - coercive recovery. In support of his arguments Mr. Jain has relied upon Section 220(6) of the Act and the judgments in the matters of R.P.David v. Agri. I.T.O. [[1972] 86 ITR 699 (Mad)]; of Seth Gopaldas Paliwal v. W.T.O. [[1983] 139 ITR 900 (M.P.)]; of Pawan Kumar v. I.T.O. [[1998] 233 ITR 27 (P&H.)]; of Dr. T.K.Shanmugasundaram v. CIT [[2008] 303 ITR 387(Mad.)] and of Valvoline Cummins Ltd. v. Deputy CIT [[2008] 307 ITR 103 (Delhi)]. He has also relied upon our order dated 29th September 2010 made in C.W.J.C. No. 12003 of 2010 (Hotel Raj Palace v. Commissioner of Income Tax, Bhagalpur). The petition is contested by learned Advocate Mrs. Archana Sinha. She has submitted that as the appeals are pending before the appellate authority the petitioner ought to have made application for stay before the appellate authority. Such application having not been made the Assessing Officer was justified in taking coercive steps for recovery of the demands raised by him. She has submitted that the power conferred upon the Assessing Officer under Section 220(6) is a discretionary power and once the discretion has been exercised the Court should not interfere with the same. In support thereof she has relied upon the judgments in the matters of Dunlop India Limited (No.1) v. Asstt. Commr. of I.T. [[1990] 183 ITR 528(Cal.)]; of K.M. Rahmath Bibi v. First Inc.-Tax Officer [[1969] 72 ITR 73] and of Paulsons Litho Works v. I.T.O. [[1994] 208 ITR 676 (Mad.)]. We are unable to comprehend the - 4 - submissions made by Mrs. Sinha. It is undisputed that the Assessing Officer has not considered or decided the applications for stay made under Section 220(6) of the Act. Question of exercising discretion or not interfering with the discretionary order made by the Assessing Officer, therefore, shall not arise. In absence of any contest that the application under Section 220(6) has been made by the petitioner and is pending before the Assessing Officer for hearing and decision, in our opinion, the petition deserves to be allowed. For the aforesaid reasons the Petition is allowed. Impugned notice of attachment of bank account dated 29th October 2010 is quashed and set aside. The legal consequences will follow. The Assessing Officer will not make coercive recovery until the applications made by the petitioner under Section 220(6) of the Act are heard and decided. Pawan/- (R.M. Doshit, CJ) (Jyoti Saran, J) "