null V. Income Tax Department and Axis Bank

WP/30780/2022

AI Insights

The writ petition was filed under Article 226 of the Constitution of India, challenging the inaction of the Income Tax Department in not adjudicating upon a condonation of delay petition and the subsequent freezing of the petitioner's bank account. The petitioner had initially filed an Income Tax Return for the assessment year 2018-2019, which was subjected to scrutiny and resulted in a demand for payment. An appeal against this demand was filed with a delay, and during this period, the bank account of the petitioner was frozen under Section 226 of the Income Tax Act. The petitioner argued that the freezing of the account without adjudicating the delay condonation petition was arbitrary and illegal. The court, considering the time required to process the condonation application, decided to defreeze the account on the condition of a partial tax deposit.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 795476 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 21-09-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: M KIRANMAYEE
• Assessee Lawyers: JAVVAJI CHANDRA
• Keywords: Condonation of delay; Faceless Assessment Scheme; Writ of Mandamus; Freezing of Bank Account
• Section: 143(3); 143(2); 144B; 226

Judgement Text

"THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE A.V.RAVINDRA BABU WRIT PETITION No.30780 of 2022 ORDER:- (Per Hon’ble Sri Justice C.Praveen Kumar) Heard Sri Javvaji Sarath Chandra, learned counsel for the petitioner, and Smt. M. Kiranmayee, learned Standing Counsel for Income Tax appearing for the respondents, and with their consent, the present writ petition is disposed of at the stage of admission. 2. The present writ petition came to be filed under Article 226 of the Constitution of India seeking the following relief:- “…… to issue a writ, order or directions more particularly one in the nature of a writ of mandamus to declare the inaction of Respondents, more particularly, Respondent No.1 in not adjudicating upon the condonation of delay petition dt.26.05.2022 filed by the Petitioner and subsequent issuance of notice dt.22.08.2022 in proceedings initiated under Section 226 and freezing the bank account of the Petitioner by Respondent no.3, as arbitrary, illegal and violative of rights of petitioner enumerated under provisions of Income Tax Act, 1961 and consequently to direct the Respondent No.1 to adjudicate the condonation petition dt.26.05.2022 in the appeal expeditiously and further defreeze the bank account bearing A/c no.917020065627270 of the petitioner firm till the condonation of delay petition dt.26.05.2022 is adjudicated by Respondent No.1 ………” 2 3. As seen from the record, the petitioner herein filed his first Income Tax Return for the assessment year 2018-2019 in Form No.5 on 30.10.2018 reporting total income at Rs.14,89,910/-. The ITR filed by the petitioner was selected for complete scrutiny assessment through Computer Aided Scrutiny Selection. Accordingly, a statutory notice under Section 143(2) of the Income Tax Act, 1961 (for short, “the Act”) was issued on 23.09.2019, which was served on the petitioner through e-mail. Subsequently, it was transferred from the Jurisdictional Assessing Officer to the National/Regional e-Assessment Centre on 13.10.2021 for completing the assessment under the newly introduced Faceless Assessment Scheme, 2019. Initially, the petitioner failed to respond to the notice issued but subsequently, an e-mail was issued on 29.03.2021 for best judgment assessment. On receiving the same, the petitioner submitted his objections on 05.04.2021. A final assessment order came to be passed by respondent No.2 on 01.09.2021 under Section 143(3) read with Section 144B of the Act, demanding payment of Rs.7,09,10,754/- for the assessment year 2018-2019. An appeal against the said order was filed before respondent No.1 with a delay. While things stood thus, proceedings under Section 226 of the Act came to be 3 initiated against the petitioner freezing his bank account maintained at Axis Bank, R.S. Road, Kothapeta, Kurnool. As stated earlier, the present writ petition is filed challenging the action of respondent No.1 in not passing any orders on the delay condonation petition and the orders passed freezing the account of the petitioner. 4. Learned counsel for the petitioner mainly submits that without passing any orders in the application seeking condonation of delay, the authorities have freezed the account of the petitioner, which is illegal and arbitrary. In other words, his argument would be that even if the delay in filing the appeal is condoned, the petitioner will not be in a position to obtain any interim order from the assessing authority. 5. Smt M. Kiranmayee, learned Standing Counsel, would contend that it will take sufficiently long time to deal with the applications filed by the petitioner seeking condonation of delay. 6. Having regard to the facts and circumstances of the case and taking into consideration the fact that it will take sufficient time to deal with the application filed by the petitioner, the account of the petitioner, which is subject matter of dispute in the present writ petition, shall be defreezed subject to condition 4 that the petitioner deposits 20% of the disputed tax in terms of the circular issued within a period of four (4) weeks from the date of receipt of a copy of this order, in default, the original order shall stand restored. 7. With the above direction, the present Writ Petition is disposed of. There shall be no order as to costs. Miscellaneous petitions pending, if any, in this Writ Petition shall stand closed. _______________________________ JUSTICE C.PRAVEEN KUMAR ________________________________ JUSTICE A.V.RAVINDRA BABU Date :21.09.2022 AMD 5 175 THE HONOURABLE SRI JUSTICE C.PRAVEEN KUMAR AND THE HONOURABLE SRI JUSTICE A.V.RAVINDRA BABU WRIT PETITION No.30780 of 2022 Date : 21.09.2022 AMD "