Court Grants Stay on Tax Recovery, Orders Appeal Process under Section 246A of the Act

The court granted the respondent time to file a reply and stayed tax recovery proceedings until further proceedings on 12/04/2019. It noted the absence of an efficacious alternate remedy through statutory appeal but highlighted the availability of an appeal to the Commissioner of Income Tax (Appeals) under section 246A of the Act. The petitioner was directed to file an appeal within three weeks, with the Commissioner tasked to decide on its maintainability within another three weeks. If the appeal is deemed maintainable, the petitioner would withdraw the petition, preserving the right to challenge other orders under the Act. Further directions were set for 1 October 2019.

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Issues involved:
1. Challenge to tax demand and direction to pay without allowing time for appeal.
2. Invocation of extraordinary jurisdiction to challenge the impugned order under the Income Tax Act.
3. Availability of efficacious alternate remedy through statutory appeal under section 246A of the Act.
4. Jurisdiction of the Commissioner of Income Tax (Appeals) to decide on the maintainability of the appeal.

Analysis:

1. The petitioner challenged the Assessing Officer's action in raising a tax demand of INR 5,872.13 Crores without allowing time for appeal. The counsel argued that the order was unsustainable in law and the petitioner should have been given the opportunity to approach the Appellate Authority before being directed to pay the amount. The court acknowledged the peculiar facts of the case and granted time for the respondent to file a reply, staying the tax recovery in the meantime until further proceedings scheduled for 12/04/2019.

2. The petitioner invoked the extraordinary jurisdiction of the court to challenge the order passed by the Respondent under sections 115Q and 115O of the Income Tax Act, citing the absence of an efficacious alternate remedy through statutory appeal. The court noted that the impugned order mentioned only a revision under section 264 of the Act as an available remedy, leading to the contention that no statutory appeal was provided for.

3. The Additional Solicitor General informed the court that an alternate remedy was available under section 246A of the Act, allowing an appeal to the Commissioner of Income Tax (Appeals) from the impugned order. The court emphasized that it was for the Commissioner of Income Tax (Appeals) to determine the appeal's maintainability in accordance with the law. The petitioner was directed to file an appeal within three weeks, with the Commissioner required to decide on the appeal's maintainability within a further three-week period.

4. The court clarified that if the Commissioner of Income Tax (Appeals) deemed the appeal maintainable, the petitioner would withdraw the petition as an effective alternate remedy would be available. However, withdrawing the petition would not prevent the petitioner from challenging other orders passed by the Authorities under the Act if entitled to do so. The matter was scheduled for further direction on 1 October 2019, with the interim stay granted earlier to continue until the next date.

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