Appellate order must be implemented despite pending rectification; attachment and recovery notices based on non-compliance were unsustainable.

An assessing authority must give effect to an appellate order once it has modified the assessment, and cannot refuse implementation merely because a rectification application under section 154 is pending. Recovery action under section 226(3) based on that refusal is not sustainable. Where attachment notices and the underlying assessment are founded on non-compliance with the appellate order, they are liable to be quashed, and the tax liability must instead be recomputed in accordance with the appellate order.

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Issues: Whether the Assessing Officer could refuse to give effect to the appellate order and proceed with attachment proceedings merely because a rectification application was pending, and whether the recovery notices issued in that situation were sustainable.

Analysis: The appellate order had already modified the assessment and the Assessing Officer was bound to give effect to it. Pendency of an application under section 154 of the Income-tax Act, 1961 did not justify withholding implementation of the appellate order. In the circumstances, the recovery action under section 226(3) of the Income-tax Act, 1961 could not be sustained on the basis adopted by the Assessing Officer.

Conclusion: The impugned refusal to implement the appellate order and the consequential attachment notices were unsustainable, and the petitioner obtained relief, though with directions to recompute and pay the tax found due.

Final Conclusion: The writ petition was disposed of with directions for fresh computation of tax liability in accordance with the appellate order, while the recovery notices and the affected assessment order were quashed.

Ratio Decidendi: An assessing authority must give effect to an appellate order and cannot withhold implementation merely because rectification proceedings are pending; consequential recovery action founded on such non-compliance is not sustainable.

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