2016 (8) TMI 269 - HC - Income Tax

Court dismisses petition challenging Tax Recovery Officer's notice under Income Tax Act, imposes costs.

The court dismissed the petition challenging a notice by the Tax Recovery Officer certifying a due amount under the Income Tax Act, 1961. The petitioner's ... Recovery proceedings - petition for early hearing - Held that:- Conduct on part of the petitioner filing the petition interalia seeking early hearing of its appeal before the CIT (A) and at the same time when the appeal is fixed for hearing by the CIT (A), the petitioner is seeking adjournment on frivolous grounds indicating that the petitioner is not serious about attending the hearing. It appears to be time delaying tactics and abuse of the legal process. In fact on 11th July, 2016 the last adjournment sought by the petitioner was to fix the hearing of the appeal in August 2016. The very fact that the petitioner has been seeking adjournment time and again before the CIT (A) and filing the petition in this Court seeking early hearing of its appeal is an abuse of the process of law. In the above view the petitioner is directed to pay costs of ₹ 20,000/- by Pay Order to “the Principal Commissioner of Income Tax-13, Mumbai” on or before 4th August, 2016. This payment of cost on or before 4th August, 2016 is a condition precedent for the CIT (A) hearing the petitioner's appeal. The petitioner would satisfy the CIT (A) that the above cost of ₹ 20,000/- has been paid. Issues:Challenge to notice by Tax Recovery Officer certifying due amount under Income Tax Act, 1961; Seeking early hearing of appeal before Commissioner of Income Tax (Appeals) (CIT (A)); Abuse of legal process through repeated adjournments.Analysis:The petitioner filed a petition under Article 226 challenging the notice issued by the Tax Recovery Officer certifying a due amount of Rs. 7.19 crores plus interest under Section 220(2) of the Income Tax Act, 1961. The petitioner also sought a direction for an early hearing of the appeal before the CIT (A). However, it was noted that the impugned notice was issued after the Assessing Officer had rejected the petitioner's stay application under Section 220(6) of the Act. The petitioner then sought time to amend the petition to challenge the Assessing Officer's order dated 11th May, 2015, which was not initially challenged.During the proceedings, it was highlighted that the petitioner's conduct was questionable. While the petitioner requested an early hearing of the appeal before the CIT (A), it repeatedly sought adjournments when the hearing dates were scheduled. The petitioner's reasons for adjournment, such as the Director being out of town or the Chartered Accountant being on vacation, were deemed frivolous. This behavior was viewed as an abuse of the legal process, indicating a lack of seriousness about attending the scheduled hearings. The court considered these actions as time-delaying tactics and an abuse of the legal system.Consequently, the court directed the petitioner to pay costs of Rs. 20,000 to the Principal Commissioner of Income Tax-13, Mumbai, by a specified date as a condition for the CIT (A) to hear the petitioner's appeal. Failure to make this payment within the stipulated time would prevent the appeal from being heard. The court dismissed the petition, emphasizing the need for the petitioner to comply with the cost requirement for the appeal to proceed.