Bank account freezing during tax appeal must consider recovered demand and be decided promptly under CBDT circulars.

A writ petition concerned freezing of a co-operative society's bank accounts while its income-tax appeal remained pending and the prescribed appeal deposit had allegedly already been substantially recovered by the Department. The petitioner contended that further freezing was unnecessary in light of the amount already recovered, and sought consideration of applications placed before the appellate authority. The Department sought time to examine those applications. The Court directed the Commissioner to decide the applications within three days of receiving a certified copy of the order, taking into account the amount recovered and the remaining outstanding demand, and to act in accordance with the relevant CBDT circulars.

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Issues: Whether the Department should be directed to reconsider the freezing of the assessee's bank accounts in light of the amount already recovered and the balance outstanding demand.

Analysis: The assessee's appeal was pending and 20% of the outstanding demand had already been recovered. In these circumstances, the Court found it appropriate to require the Department to decide the pending applications afresh, taking into account the amount already recovered, the balance outstanding, and the relevant CBDT circulars governing recovery measures.

Conclusion: The matter was directed to be reconsidered by the Department within a short time frame, after taking into account the recovered amount and the outstanding demand.

Final Conclusion: The writ petition did not result in an adjudication on the merits of the recovery action, but the assessee obtained a direction for timely administrative reconsideration of its request against continuation of the bank account freeze.

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