High Court reduces petitioner's tax liability, instructs prompt refund, sets deadline for appeals

The High Court directed the petitioner to pay a reduced amount of Rs. 15,00,000 in lieu of the balance owed for tax liabilities. Upon payment, the Income Tax Department was instructed to promptly re-credit the remaining balance to the petitioner's bank account. The Court also mandated the Appellate Authority to finalize the appeals within six months and ordered the Department to refrain from coercive recovery measures until the appellate orders are communicated. The Court balanced the petitioner's financial hardship plea with the default in payment, providing specific instructions for the resolution of the matter.

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Issues:
Recovery of tax liability from petitioner's savings account, default in payment leading to loss of stay order benefit, financial hardship plea, appropriateness of recovery action by Income Tax Department.

Analysis:
The petitioner approached the High Court aggrieved by the Income Tax Department's action of recovering Rs. 39,35,313 from their savings account towards a tax liability for the assessment years 2011-2012 and 2012-2013. The petitioner had appealed the assessments before the Appellate Authority and had been directed to pay specific amounts as confirmed demands. However, the petitioner defaulted on the payments, leading to the Department proceeding with the full recovery. The petitioner argued financial hardship, stating they could have paid a lesser amount if they had effectively complied with the directions given. The Court noted a previous judgment directing the Department to consider an extension of time for compliance, which the Department had not acted upon before initiating recovery.

The Court considered the plea of financial hardship and the fact that the petitioner could have paid a lesser amount if they had complied with the directions. The Court disposed of the Writ Petition with specific directions. The petitioner was directed to pay Rs. 15,00,000 in lieu of the balance they were required to pay. Upon payment, the Department was instructed to re-credit the balance amount to the petitioner's bank account promptly. The Appellate Authority was directed to hear the petitioner and pass final orders on the appeals within six months. It was clarified that the Department should refrain from coercive recovery steps until the appellate orders are communicated to the petitioner.

In conclusion, the Court acknowledged the default in payment by the petitioner but considered the financial hardship plea. The Court provided specific directions for partial re-crediting of the recovered amount, continuation of the appeal process, and a stay on further recovery actions by the Department.

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