P. Bhaskara Rao V. The Asst. Commissioner of Income Tax, Circle 10(1) Hyderabad and others

WP/7731/2010

AI Insights

The case involves P. Bhaskara Rao, the petitioner, who challenged the legality of a notice issued by the Assistant Commissioner of Income Tax, Circle 10(1), Hyderabad, which attached his bank accounts for recovery of disputed tax arrears amounting to Rs. 22,41,980 for the assessment year 2007-2008. The petitioner had previously appealed the tax assessment, which was pending, and had also requested a stay on the collection of the disputed tax, which was denied. The court's decision to suspend the demand notice was based on the ongoing appeal and the partial payment of the disputed tax by the petitioner.

• Counselvise Citation: [2010] 140 COUNSELVISE.COM (IT) 808234 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 08-04-2010
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Bank Account Attachment; Income tax assessee; Stay of collection; Writ of Mandamus; Disputed tax arrears
• Section: 226(3)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD (Special Original Jurisdiction) THURSDAY, THE EIGHTH DAY OF APRIL TWO THOUSAND AND TEN PRESENT THE HON'BLE MRS. JUSTICE T.MEENA KUMARI AND THE HON'BLE MR JUSTICE NOOTY RAMAMOHANA RAO WRIT PETITION NO : 7731 OF 2010 Between: P.Bhaskara Rao ..... PETITIONER AND The Asst. Commissioner of Income Tax, Circle 10(1) Hyderabad and others .....RESPONDENTS The Court made the following : ORAL ORDER: (per THE HON’BLE MRS. JUSTICE T.MEENA KUMARI) Seeking a writ of mandamus declaring the notice dated 10.3.2010 issued by the first respondent to respondents 4 and 5 attaching the bank accounts of the petitioner for recovery of the disputed tax arrears to the tune of Rs.22,41,980/- for the assessment years 2007- 2008 as illegal, arbitrary and unreasonable and to hold that the petitioner is not in default of tax, pending appeal before the third respondent petitioner filed this writ petition. The petitioner is an income tax assessee on the rolls of first respondent. For the assessment year 2007-2008 the first respondent has completed the assessment by order dated 29.10.2009 taxing the short term capital gain at 33% treating the same to be business income. The petitioner, aggrieved thereby preferred an appeal before the third respondent bearing No.0184/09-10, which is pending. The petitioner also filed applications seeking stay of collection of the disputed tax of Rs.22,41,980/- before respondent 1 and also respondent No.3, before whom appeal is pending. The petitioner further informed respondent No.1 that the third respondent has posted the appeal for hearing in the month of March, 2010 and requested not to take coercive steps, for recovery of the disputed amount. The respondent No.1 by letters dated 18.11.2009 and 23.2.2010 which, the petitioner contends, are anti-dated, informed the petitioner that the stay petition filed by him is rejected. According to the petitioner, immediately after issuing the above letter, notice under Sec. 226(3) of the Income Tax Act dated 10.3.2010 was addressed to the respondents 3 and 4 attaching the bank accounts for collection of the arrears of disputed taxes and the accounts were frozen. Hence, the present writ petition is filed. Heard the learned counsel for the petitioner and Mr.B.Narasimha Sarma, the learned Standing Counsel for Respondents 1 to 3. It is contended on behalf of the petitioner that in view of this backdrop and factual position of the case, issuance of notice under Sec.226 (3) by the Assessing Officer and attaching the bank accounts for recovery of the disputed tax demand is arbitrary and to substantiate this submission, several contentions are raised, which we do not propose to delve for the present. In the facts and circumstances of the case, as the matter relates to stay pending appeal and it is represented that the petitioner has already paid 10% of the tax due as claimed by the respondents, we are of the considered opinion that the impugned demand notice can be suspended subject to certain conditions, without adverting to the merits sought to be contended by the learned counsel for the petitioner. Accordingly, the impugned demand notice is suspended subject to the condition of the petitioner paying a further sum of Rs.2.00 lakhs (Rupees two lakhs) within a period of four weeks from today and the respondents are directed not to take coercive steps for recovery of the balance disputed tax, pending appeal before the Appellate Authority. The Appellate Authority is directed to dispose of the appeal as expeditiously as possible not later than 31.07.2010. With these directions, the writ petition is disposed of. No order as to costs. ____________________ Justice T.Meena Kumari __________________________ Justice Nooty Ramamohana Rao April 08, 2010 MAS "