Challenges to Income Tax Act Orders Withdrawn With Assurance of No Coercive Recovery

The petitions challenging orders under Section 201(1)/201(1)(A) of the Income Tax Act for Assessment Years 2016-17 and 2017-18, citing breach of natural justice and shortened payment period, were disposed of as withdrawn. The Revenue, represented by Mr. Suresh Kumar, agreed that no coercive recovery actions would be taken if the petitioners filed appeals within two weeks. The petitioners confirmed their intent to appeal, ensuring the orders were stayed, and the Commissioner of Income Tax (Appeals) would review the appeals on their merits. Consequently, the petitions were withdrawn following these developments.

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Issues:
Challenges to orders under Section 201(1)/201(1)(A) of the Income Tax Act, 1961 for Assessment Years 2016-17 and 2017-18 on grounds of breach of natural justice and curtailed statutory period for payment.

Analysis:
The two petitions filed under Article 226 of the Constitution of India challenged the orders dated 7th February, 2018 passed under Section 201(1)/201(1)(A) of the Income Tax Act, 1961 for Assessment Years 2016-17 and 2017-18. The petitioners contended that the assessment orders were passed in violation of principles of natural justice as the show cause notices issued by the Assessing Officer required information/documents by 9th February, 2018, but the impugned orders were issued on 7th February, 2018. Additionally, the demand notices called for payment within seven days, contrary to the statutory 30-day period under Section 220 of the Act.

The Revenue objected to the petitions being entertained, arguing that the impugned orders were appealable to the Commissioner of Income Tax (Appeals) under the Act. However, in a peculiar turn of events, the Revenue, represented by Mr. Suresh Kumar, offered that if the petitioners filed appeals within two weeks, no coercive recovery proceedings would be initiated until the Appeals were disposed of by the Commissioner of Income Tax (Appeals) within 4 months from filing.

In response, Mr. Mistri, representing the petitioners, confirmed their intention to file appeals within two weeks. The impugned orders dated 7th February, 2018 had been stayed by a previous court order, ensuring that the 30-day period for filing appeals had not lapsed. Consequently, the Commissioner of Income Tax (Appeals) agreed to consider the appeals on their merits.

Given the statement made by the Revenue and the petitioner's decision to file appeals, Mr. Mistri sought to withdraw the petitions, which were subsequently disposed of as withdrawn.

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