Thrissur Expressway Limited V. The Income Tax Officer

WP/4896/2023

AI Insights

The case involves Thrissur Expressway Limited, represented by its director, Prudhvi Kumar Reddy, who filed a writ petition against multiple respondents including the Income Tax Department and Axis Bank Limited. The petitioner challenged a garnishee notice issued by the Income Tax Officer, which directed Axis Bank to attach the petitioner's bank account for non-payment of assessed dues for the assessment years 2019-20 and 2020-21. The petitioner argued that the notice was issued during the pendency of an appeal and was thus arbitrary and violative of the principles of natural justice. The court heard arguments from both sides and directed the appellate authority to decide on the stay petition filed by the petitioner.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 760758 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 21-02-2023
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: K CHOUDARY; GADI KUMAR
• Assessee Lawyers: RAJA RAO SALVAJI
• Keywords: Garnishee notice; Income Tax; Mandamus; Natural Justice; Stay of demand
• Section: 154; 143(1); 220(6); 226(3)

Judgement Text

"[ 3311 ] THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY,THE TWENTY FIRST DAY OF FEBRUARY TWO THOUSAND AND TWENTY THREE PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE N.TUKARAMJI WRIT PETITION NO:4896 OF 2023 Between: Thrissur Expressway Limited, Rep. by its Director t / Prudhvi Kumar Reddy, S/o. Raja Mohan Reddy, aged about 46 years, Registered Off - 1- 80/40/5P/58-65, Shilpa Homes Layout, Gachibowli, Hyderabad-32 ...PETITIONER AND 1 The lncome Tax Officer, Centralized Processing Centre, lncome Tax Department, Bangalore. The lncome Tax Officer, Ward 2(1), sth Floor, Signature Towers, Sy.No.6(P) of Kondapur, Opp- Botanical Gardens, Serlingampally(M), RR District, Hyderabad 3. The Principal Commissioner of lncome Tax Range 2, 6th Floor, Signature Towers, Sy.No.6(P) of Kondapur, Opp- Botanical Gardens, Sedingampally( M), RR District, Hyderabad 4. The Commissioner of lncome Tax (Appeals), -lncome Tax Department National Faceless Appeal Centre ( NaFAC) 5. Union of lndia, Department of Revenue, Represented by its Secretary (Revenue), North Block, New Delhi. 6. Axis Bank Limited, Rep.by the Branch Manager, Hyderabad ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ of mandamus or any other appropriate writ, order or direction declaring the action of the 2nd Respondent in issuing garnishee notice ITBA/RCV/S/2 26(3)1 I 2022-23 I 1 O 47 47 5593( 1 ) d ated 1 7 I 1 1 I 2022 a nd amend m ent letter F.No.lTO, W-2(1|AADCf17O3H|2O22-23 dated 1211212022 during the pendency of appeal dated 2BlO2l2O22 before the 4th Respondent as arbitrary, illegal and violative of principles of natural justice and consequently i) grant stay of garnishee notice IrBA/RCV/S/226(3) 112022-2311047475593(1) dated 2 1711112022 and amendment letter F.No.lTO, W-2(1yAADCT17O3H|2O22-23 dated 1211212022 to the extent of A.Y. 2019-20 until disposal of the appeal or stay petition pending before the 4th Respondent ii) further not take any coercive action until disposal of the appeal or stay petition pending before the 4th Respondent. Counsel forthe Respondents 1 TO 4: M/S. K. MAMATA , SC FOR INCOME TAX Counsel for the Respondent 5: SRI GADI PRAVEEN KUMAR, SC FOR CENTRAL GOVERNMENT Counsel forthe Respondent 6: NONE APPEARED The Goud made the following: ORDER lA NO: 1 OF 2023 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to grant stay of garnishee notice ITBA/RCV|SI226(3)_112022-2311047475593(1) dated 17 I 1 1 12022 and amendment letter F. No. lTO, W-2( I yAADCT 1 7 03H12O22- 23 dated 1211212022 to the extent of 4.Y.2019-20 passed by 2nd Respondent pending disposal of the writ petition. Counsel for the Petitioner : SRI RAJA SHEKAR RAO SALVAJI I THE HON'BLE THE CHIEF JUSTICE UJJAL BHIIYAN AND THE HON'BLE SRI JUSTICE N. TUKARAMJI WRIT PETITION No.4896 of 2023 ORDER: (Per the Hon'ble the Chief Justtce Ujjal Bhugan) Heard Mr. Raja Shekar Rao Salvaji, learned counsel for the petitioner arld Ms. K. Mamata Choudary, learned Senior Standing Counsel, Income Tax Department lor respondent Nos.1 to 4. We have also heard Mr. G.Praveen Kumar, learned Deputy Solicitor General of India lor respondent No.5. 2. By Iiling this petition under Article 226 of the Constitution of India, petitioner has assailed garnishee notice dated 17.L1.2O22 issued by the 2\"d respondent under Section 226(3) of the Income Tax Act, 1961 (briefly referred to hereinafter as the ActJ and addressed to the 6th respondent i.e., Axis Bank Limited, Hyderabad for /attachment of bank account of the petitioner. HCJ & NTRJ W.P.No.4896 of 2023 3. We may mention that subsequent to issuance of the aforesaid notice dated 17.11.2022, 2nd respondent had issued a Corrigendum dated 12.12.2C22 stating that there was a typographical error in the notice dated 17.11.2022. Instead of assessment years 2017-78,20lB-19 and 2O19- 20 for a sum of Rs.73,25,51,250.00 due from the petitioner, it should be assessment years 2Ol9-2O and 2O2O-21 for a sum of Rs.31,65,81,430.00. 4. Be it stated that for the assessment year 2019 20, petitioner had submitted its return of income on 29.1O.2019. Ultimately intimation under Section 143(1) of the Act was issued by the Centralized Processing Centre to the petitioner on lO.ll.2O2O. As per the aforesaid intimation, net amount payable by the petitioner for the aforesaid assessment year: was quantified at Rs.27,7O,9O,200.O0. However, an order of rectification was passed under Section 154 of the Act. ThereaJter, petitioner preferred appeal. 2 - H(J & NTRJ W.P.No.4896 of 2023 5. On a query by the Court, learned counsel for the petitioner submits that the appeal was filed on 28.02.2022. As a matter of fact, two appeals have been preferred by the petitioner, one against the intimation under Section 1a3(1) of the Act and the second one against the order passed under Section 154 of the Act. However, petitioner has not paid the outstanding dues as per the intimation as rectified. Therefore, 2\"d respondent has 6. Faced with such a situation, petitioner has filed stay petition on 03.01.2023 before the appellate authority i.e., respondent No.4 for stay of demand. 7. With the grievance that no decision has been taken by the appellate authority while the petitioner continues to face garnishee proceeding, the present writ petition has been filed. 8. On a perusal of the stay petition, we find that the same has been liled under Section 220(6) of the Act, as 3 / I issued the impugned garnishee notice dated 17 .1I.2022. - HCJ & NrRJ W.P.No-4896 of 2023 per which provision such a petition is required to be filed before the assessing ofhcer. 9 . Be that as it may, it is trite law that an appellate authority which is competent to hear an appeal has aiso the power to grant interim relief relatable to the appeal. Power to grant stay is incidental and ancil1ary to t}-re pos'er to entertain an appeal. 10. Notwithstanding wrong mentioning of the provision, we are of the view that since an application has been filed by the petitioner before the 4th respondent appellate authority, the said authority should consider the stay prayer of the petitioner one way or the other within a reasonable time. 1 i. Accordingly, we direct the 4th respondent to after giving arr opportunity of hearing to the petitioner arrd thereafter pass an appropriate order in accordance with I law. consider the stay prayer of the petitioner dated 31.O1.2023 HCJ & NTRJ W.P.No.4896 of 2023 12. Let the above exercise be carried out and concluded within a period ol four (04) weeks from the date of receipt of a copy of this order. 13. We make it clear that the garnishee notice dated 17.11.2022, as modilied on 12.12.2022, n,ill be subject to such order that may be passed by the 4th 14. This disposes of the Writ Petition. However, there shall be no order as to costs. 15. Miscellaneous applications pending, if any, 1n this Writ Petition shall stand closed. 16. Petitioner to communicate a copy of this order to the 4tl, respondent within seven days lrom receipt of a copy of this order. //TRUE COPY// ) SD/. K.SREERAMA MURTHY ASSTSTANT REGISTRAR SECTION OFFICER to',. ,n\" lncome Tax officer' Centralized Processing Centre' lncome Tax Deoartment, Bangalore' 2. Th6 lncome Tax Ottiie'r, Ward 2(1), 5thf loor, Signature To-w-erp, Sy No 6(P) of Kondapur, opp- aoi'ni\";l 6uio6''l' Serlinganipallv(M)' RR District' Hyderabad respondent on the stay petition of the petitioner. J. 4. 5. 6. 7. B. 9. 10 EDS GJP The Principal Commissioner of lncome Tax Range 2, 6th Floor, Signature Towers, Sy.No.6(P) of Kondapur, Opp- Botanical Gardens, Serlingampally([,4), RR District, Hyderabad The Commissioner of lncome Tax (Appeals), lncome Tax Department National Faceless Appeal Centre ( NaFAC) Union of lndia, Department of Revenue, Represented by its Secretary (Revenue), North Block, New Delhi. Axis Bank Llmited, Rep.by the Branch Manager, Hyderabad One CC to SRl. RAJA SHEKAR RAO SALVAJI Advocate [OPUC] One CC to SRl. K IVIAMATA, SC FOR INCOME TAX, Advocate [OPUC] One CC to SRI DEPUTY SOLICITOR GENERAL OF lNDlA,[OPUC] Two CD Copies HIGH COURT DATED:21 10212023 11rtr STAT. ( s s u[t ?r.'1i ORDER WP.No.4896 of 2023 DISPOSING 5 o Ll :i .:..,,,2' ;t E WRIT PETITION WITHOUT COSTS "