SMT.MANJU W/O ANILKUMAR BHURAT V. INCOME TAX OFFICER W 1 (1)

WA/100281/2019

AI Insights

The case involves Smt. Manjula, the appellant, who challenged the order of the Income Tax Officer (ITO) regarding the attachment and extraction of money from her bank account due to tax dues. The appellant argued that the ITO's actions were taken without proper hearing and were thus against the principles of natural justice. The High Court of Karnataka examined whether the ITO's actions were legally justified and whether the appellant was given a fair opportunity to contest the actions taken against her. The court found procedural irregularities in how the stay application was handled and ruled in favor of the appellant by restoring the extracted amount and directing further proceedings to be conducted fairly.

• Counselvise Citation: [2020] 140 COUNSELVISE.COM (IT) 754900 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 29-01-2020
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: Y V RAVIRAJ; B MUHAMMED ALI
• Assessee Lawyers: MANOJ PUKALE; H R KAMBIYAVAR; PRAKAS BADIGER
• Keywords: Assessee in default; Bank attachment; Natural Justice; Stay Application; Tax Collection
• Section: 156; 220

Judgement Text

" : 1 : IN THE HIGH COURT OF KARNATAKA DHARWAD BENCH ON THE 29TH DAY OF JANUARY 2020 PRESENT THE HON’BLE MR. JUSTICE K.N. PHANEENDRA AND THE HON’BLE MR. JUSTICE PRADEEP SINGH YERUR W.A. NO.100281/2019 & W.A. NO.100491/2019 (T-IT) BETWEEN: SMT.MANJULA W/O ANILKUMAR BHURAT, AGE: 50 YEARS, OCC: HOUSEHOLD, BHURAT BUILDING, SHETTAR CHAWL, HIREPETH, HUBBALLI-580028, AADHAR NO.294574699039, PAN: ABRPB4398J. ... APPELLANT (BY SRI.MANOJ D. PUKALE, SRI.H.R.KAMBIYAVAR & SRI.PRAKAS R. BADIGER, ADVS.) AND: 1. INCOME TAX OFFICER W1(1), 1ST FLOOR, INCOME TAX OFFICE, CENTRAL REVENUE BUILDING, P.B. ROAD, NAVANAGAR, HUBBALLI-580025, EMAIL-HUBLI.ITO1.1@INCOME TAX.GOV.IN> : 2 : 2. BRANCH MANAGER STATE BANK OF INDIA, PRESENT ADDRESS: JAVALI CHAMBERS, DAJIBANPETH, HUBBALLI-580028. ... RESPONDENTS (BY SRI.Y.V.RAVIRAJ, ADV. FOR R1 & SRI.B.MUHAMMED ALI, ADV. FOR R2) THESE WRIT APPEALS ARE FILED UNDER SECTION 4 OF THE HIGH COURT ACT, 1961, PRAYING THIS HON’BLE COURT THAT THE APPEAL BE ALLOWED BY SETTING ASIDE THE ORDER DATED 25.03.2019 PASSED BY THE LEARNED SINGLE JUDGE IN WRIT PETITION NO.106708 OF 2019 AND WRIT PETITION NO.106849 OF 2019 (T-IT) AND ASCERTAIN THE VARACITY OF DATE, TIME AND MODE OF BANK ATTACHMENT, TAX COLLECTION AND LIFTING THE ATTACHMENT: A) AS AVERRED BY R1 IN STATEMENT OF OBJECTIONS DATED 25.03.2019 IN WP AND ETC. THESE WRIT APPEALS COMING ON FOR ORDERS, THIS DAY, K.N.PHANEENDRA J., DELIVERED THE FOLLOWING: : 3 : JUDGMENT The appellant has called in question the order passed by the learned Single Judge in Writ Petition No.106708/2019 and Writ Petition No.106849/2019 (T-IT) on 25.03.2019, (questioning the impugned order dated 13.02.2019 passed by the respondent as per Annexure – D) in not directing the respondent to transfer the amount back to the account of the petitioner, and thereafter consider the stay application submitted by the respondent. 2. The short question that arise for consideration is that, the writ Court has come to the conclusion that the order passed by the respondent on 13.02.2019 was against the principles of natural justice in extracting the money from the account of the petitioner before the writ Court, without providing any opportunity to the writ petitioner to submit with reference to : 4 : his stay application and also disposing of the stay application without hearing the writ petitioner. 3. The learned counsel for the respondent strenuously contends that, the demand notice was issued to the writ petitioner by the respondent on 28.12.2018 under Section 156 of the Income Tax Act, 1961 (hereinafter referred to as ‘Act’ for short). He filed stay application on 15.01.2019 and the stay application was disposed of on 13.02.2019. Thereafter, on 18.02.2019, the attachment of the amount in the account of the petitioner was made particularly after issuance of notice by the writ Court. The said amount was actually extracted on 19.03.2019. The learned counsel for the respondent submits that after lapse of 30 days from 28.12.2018, the appellant becomes assessee in default under Section 220 of the Act. Therefore, the extraction of the money by the respondent is not illegal, but disposal of the : 5 : stay application without hearing him may be an irregularity committed by the Officer. The learned counsel for the respondent further submits that, mere filing of the stay application will not in any manner extend the period fixed under Section 220 of the Act. 4. Having heard the learned counsels, though the writ Court has disposed of the matter setting aside the order dated 13.02.2019, no order has been passed with reference to the irregularity or the illegality committed by the respondent. Of course, though it may not extend the time more than 30 days according to Section 220 of the Act, but the conduct of the respondent shows that though stay application was filed on 15.01.2019 till 13.02.2019 no orders have been passed, no documents were furnished as sought for by the petitioner. Therefore, virtually it is the conduct of : 6 : the Officer which made the petitioner as an assessee in default. Therefore, under the above said circumstances, in our opinion, the amount whatever extracted by the respondent from the account of the petitioner is to be restored, however in order to protect the interest of the respondent also, we put a rider on the appellant that after the said amount is reversed to the account of the petitioner, he should not transfer or withdraw the said amount pending disposal of the proceedings before the respondent. The said amount shall be kept in No Lien Account by the respondent No.2 Bank. With these observations, the respondent No.1 is hereby directed to furnish the documents as sought for by the petitioner and also pass : 7 : appropriate orders after hearing the petitioner in accordance with law. In view of disposal of these appeals on merits, I.A. No.1/2019 does not survive for consideration. Sd/- JUDGE Sd/- JUDGE Rsh "