Partnership Firm ordered to remit sum to halt recovery actions under Income Tax Act

The Court directed the petitioner, a Partnership Firm, to remit a specific amount to halt coercive recovery actions resulting from the revision of assessment under Section 263 of the Income Tax Act, 1961. The Court ordered the assessing officer to decide on the stay application within two weeks and suspended further recovery proceedings for three weeks. No costs were imposed on either party, and the case was closed.

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Issues:
1. Revision of assessment under Section 263 of the Income Tax Act, 1961
2. Denial of deduction under Section 80IB (10) of the Act
3. Application for stay of recovery of demand
4. Issuance of garnishee notices under Section 226 (3) of the Act
5. Interim stay of recovery proceedings

Revision of Assessment under Section 263:
The petitioner, a Partnership Firm, was initially assessed by the Assistant Commissioner of Income Tax, Non-Corporate Circle - 3, for the assessment year 2012-13. Subsequently, the Principal Commissioner revised the assessment under Section 263 of the Income Tax Act, 1961, on 21.12.2016. The revised assessment resulted in various additions and adjustments, including the denial of the benefit of deduction under Section 80IB (10) claimed by the petitioner. This revision led to a demand of Rs. 2,14,09,400/-.

Application for Stay of Recovery:
The petitioner filed an application seeking a stay of recovery of the demand, which was pending before the first respondent. Despite the pending stay application, garnishee notices under Section 226 (3) of the Act were issued to the South Indian Bank, Triplicane Branch, and State Bank of India, Kilpauk Branch. The petitioner approached the Court seeking relief from the coercive recovery proceedings.

Interim Stay of Recovery Proceedings:
During the proceedings, the Senior Standing Counsel for respondents 1 to 3 acknowledged the pendency of the appeal and stay petition before the Commissioner of Income Tax (Appeals) and the assessing officer. The Court, considering the interests of both parties, directed the petitioner to remit Rs. 25,00,000/- either from the credit in the South Indian Bank or through fresh remittance. Upon proof of remittance, the attachment of the petitioner's bank account in the South Indian Bank would be lifted. The Court also instructed the assessing officer to dispose of the stay application within two weeks and ordered no further recovery proceedings for three weeks.

Conclusion:
The Court disposed of the writ petition by directing the petitioner to remit a specific amount and providing relief from coercive recovery actions. The stay application was to be decided within two weeks, and no recovery proceedings were to take place for three weeks. The judgment concluded without any costs imposed on either party, and the connected matters were closed.

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