2020 (2) TMI 619 - HC - Income Tax

High Court directs stay application filing before CIT (Appeals) for bank account attachment, speedy review.

M/s. Essjay Ericsson Private Limited Versus Commissioner of Income Tax, New Delhi & Ors.

The High Court addressed the rejection of the petitioner's application under Section 220(6) by the Assessing Officer, leading to bank account attachment. ... Stay application - rejection of the petitioner’s application u/s 220(6) and the consequent attachment of the bank accounts of the petitioner - HELD THAT:- We are informed that the petitioner’s appeal is already pending before the CIT (Appeals). We permit the petitioner to immediately file the stay application before the CIT (Appeals). The CIT (Appeals) shall consider the same and pass an order thereon within two weeks without being influenced by the order dated 23.01.2020 passed by the Assessing Officer on the stay application under Section 220(6). The bank accounts of the petitioner already stand attached and the amounts recovered. In case, the CIT (Appeals) grants relief after hearing the assessee, to the extent that any amount may have been recovered in excess of the amount in respect of which stay is not granted, the same shall be restituted to the petitioner by the respondent. Issues:1. Rejection of application under Section 220(6) by the Assessing Officer and consequent attachment of bank accounts.2. Grievance of the petitioner regarding the rejection and attachment.3. Permission granted to file a stay application before the CIT (Appeals).4. Directions given to CIT (Appeals) to consider the stay application and pass an order within two weeks.5. Restitution of any excess amount recovered if relief is granted by CIT (Appeals).6. Requirement for CIT (Appeals) to pass a reasoned order on the stay application.Analysis:1. The High Court addressed the issue of the rejection of the petitioner's application under Section 220(6) by the Assessing Officer, which led to the attachment of the petitioner's bank accounts. The court noted that the petitioner's appeal was pending before the CIT (Appeals), indicating a legal recourse already in progress.2. The court acknowledged the petitioner's grievance concerning the rejection and attachment, prompting the court to permit the petitioner to file a stay application before the CIT (Appeals) immediately. This step aimed to provide the petitioner with an opportunity to seek relief through the appropriate legal channel.3. Upon granting permission to file the stay application, the High Court directed the CIT (Appeals) to consider the application promptly and issue an order within two weeks. This directive emphasized the importance of timely resolution and indicated the court's expectation for expeditious decision-making by the CIT (Appeals).4. In the event that the CIT (Appeals) granted relief to the petitioner after due consideration, the High Court ordered the restitution of any excess amount that may have been recovered beyond the granted relief. This instruction ensured fairness and protection of the petitioner's financial interests in case of a favorable outcome.5. Furthermore, the High Court emphasized the necessity for the CIT (Appeals) to pass a reasoned order on the stay application filed by the petitioner. This requirement aimed to promote transparency, accountability, and legal soundness in the decision-making process, ensuring that all aspects of the case were duly considered and documented.6. Ultimately, the High Court disposed of the petition based on the terms outlined in the judgment, providing clarity on the actions to be taken by the petitioner, the CIT (Appeals), and the respondent. The court's decision sought to uphold procedural fairness, legal compliance, and the protection of the petitioner's rights within the framework of the law.