2018 (3) TMI 1531 - HC - Income Tax

Successful Petition Challenges Improper Revenue Actions, Orders Reconsideration

White Pay LLP Versus The Income-Tax Officer 30 (3) (5) and 3 Ors.

White Pay LLP Versus The Income-Tax Officer 30 (3) (5) and 3 Ors. - TMI Issues:1. Rejection of application for stay of demand2. Commencement of coercive proceedings by Revenue before appeal time expired3. Attachment and withdrawal of amounts from petitioner's bank accounts without noticeAnalysis:1. The petition challenged the order rejecting the petitioner's application for stay of demand following penalty proceedings. The rejection was based on the condition of paying 20% of the demand raised, contrary to established court decisions on the procedure for stay applications under Section 220(6) of the Income-Tax Act, 1961.2. The Revenue initiated coercive proceedings even before the appeal time from the penalty proceedings order had lapsed. The petitioner's bank accounts were attached by the Assessing Officer, and the entire available amount of Rs. 9.88 lacs was withdrawn without prior notice, which was deemed contrary to the court's precedent in UTI Mutual Funds vs. Income-Tax Officer.3. The court directed the petitioners to re-serve the Commissioner of Income-Tax for consideration. The Revenue was granted time to examine the case, and the petition was scheduled for a later date. However, the Revenue was instructed to deposit the withdrawn amounts back into the bank accounts on the next working day, emphasizing the necessity of providing reasonable notice before withdrawing funds from attached bank accounts as per court guidelines.This comprehensive analysis covers the issues of rejection of stay application, premature commencement of coercive proceedings, and unauthorized attachment and withdrawal of funds from the petitioner's bank accounts, highlighting the legal discrepancies and court directives in the judgment delivered by the Bombay High Court.