Income Tax Appellate Tribunal - Mumbai
Fractal Analytics P.Ltd, vs Asst Cit Cir 9(3)(2), on 15 March, 2017
आयकर अपीलीय अधिकरण " के " न्यायपीठ मुंबई में।
IN THE INCOME TAX APPELLATE TRIBUNAL
MUMBAI BENCH "K", MUMBAI
BEFORE SHRI C.N. PRASAD, JUDICIAL MEMBER AND
SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER
STAY APPLICATION NO.73/Mum/ 2017
arising out of ITA NO. 1024/MUM/2017
(A.Y : 2012-13)
M/s Fractal Analytics Pvt. Ltd. Vs. ACIT - 9(3)(2)
Level 7, Silver Metropolis Mumbai
Western Express Highway
Goregaon (East)
Mumbai - 400 063
PAN : AAACF4502D
(अपीलार्थी / Appellant) (प्रत्यर्थी / Respondent)
अपीलार्थी की ओर से / Appellant by : Shri JD Mistry
प्रत्यर्थी की ओर से Revenue by : Shri MV Rajguru
सुनवाई की तारीख / Date of Hearing : 10/03/2017
घोषणा की तारीख Date of Pronouncement : 15/03/2017
ORDER
PER C.N.PRASAD (J.M.) :
This stay application is filed by the Assessee on 15.02.2017 requesting for stay of outstanding demand of Rs.2,92,73,682/- for the Assessment year 2012-13.2
M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017
2. At the outset the Ld. Counsel for the Assessee submits that when the stay petition was heard on 17.2.2017, the Hon'ble Bench inquired about the rejection of stay petition by the Assessing Officer and since no written order was passed by the Assessing Officer, the matter was adjourned to 10.03.2017 with a direction to the Ld. DR to communicate to the Assessing Officer to pass order in writing disposing off the stay petition and meanwhile not to take any coercive action for recovery.
3. The Ld. Counsel for the Assessee submits that in complete disregard to the directions of the Tribunal, the Assessing Officer attached all the bank accounts of the Assessee in HDFC Bank and recovered the dues to the extent of Rs.1.67 crores by passing order u/s 226(3) dated 22.02.2017 and rejected the stay petition by order dated 23.02.2017 after attaching the Bank accounts. He submits that when Assessee approached the Ld. CIT, the Ld. CIT required the Assessee to accept for paying instalments. Since bank accounts were attached, the Assessee was not in a position to carry on business and he was forced to accept for payment of Rs.15 lakhs per month starting from April 2017. Therefore, the Ld. Counsel requested that the attachments may be lifted and the outstanding demand may be stayed. He further submits that the Revenue may be directed to return the amounts recovered from the Assessee from its bank accounts. He submits that without giving sufficient time and without rejecting the stay petition with reasons amounts were recovered, therefore a direction be given to redeposit the amounts into Bank accounts. The Ld. Counsel placing reliance on the following decisions submits that the Tribunal in these decisions directed the Assessing Office to return the monies collected in an arbitrary 3 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 manner and without giving sufficient time for the Assessee to make a representation or seek recourse to a remedy in law.
1. UTI Mutual Fund Vs. ITO WP No. 606 of 2012 dated 14.03.2012 Bombay High Court
2. Maharashtra State Electricity Board Vs. JCIT 81 ITD 299 (Mum)
3. Maharashtra Housing & Area Development Authority Vs. Addl.DIT(E) SP No. 293/Mum/2013 dt.25.11.2013
4. The Ld. DR submits that the oral directions of the Tribunal to dispose off the stay petition has been communicated to the Assessing Officer by the Ld.DR on 21.02.2017. On a query from the Bench why revenue should not be directed to return the amounts collected from the revenue, the Ld. DR submits that the Assessee may be directed to pay reasonable amount towards the demand and he suggested that 10% of the demand be directed to be paid. The Ld. Counsel for the Assessee submits that the Revenue may retain Rs.30 lakhs towards demand for this assessment year and the remaining may be redeposited into the accounts. He further submits that the attachment of bank account be removed and the Assessee be allowed to conduct the business normally. He also requested for taking up the appeal on out of turn basis and fix the appeal for early hearing.
4M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017
5. We have heard the rival submissions, perused the orders of the authorities below. The stay petition was posted for hearing on 17.02.2017 and on that day on the inquiry by the Bench, whether any stay petition is moved before the Assessing Officer or the Commissioner, the Ld. Counsel for the Assessee submitted that the Assessee filed stay petition before the Assessing Officer on 14.02.2017 by letter dated 03.02.2017 requesting for stay of the demand of Rs.2,92,73,682/- determined for the assessment year 2012-13 as per the notice issued u/s 156 or the Act. The Counsel further submitted that the stay petition was rejected by the Assessing Officer as per the order sheet notings and no written order was given to the Assessee. As there was no written order passed by the Assessing Officer, we have adjourned the hearing of stay petition to 10.03.2017 and directed the Assessee's counsel to obtain written order from the Assessing Officer. We also directed the Ld. DR, Mr Saurabh Kumar Rai to communicate the Assessing Officer that the rejection order of the stay application filed before him be given to the Assessee. We also directed the Ld. DR Mr. Saurabh Kumar Rai to inform the Assessing Officer not to take coercive action for recovery of demand till 10.03.2017 i.e. the date of hearing fixed for hearing the stay petition of the Assessee. The Assessee on 20.02.2017 approached the Assessing Officer, narrated the events happened before the Tribunal when the stay petition came up for hearing on 17.02.2017 and requested the Assessing Officer to provide letter rejecting the stay application and not to take any coercive action till the disposal of stay application filed before this Tribunal. On 22.02.2017, the Assessee before the Ld. CIT-9 filed a copy of the stay petition which was filed before the Assessing Officer earlier. The Assessing Officer on 22.02.2017 issued notice u/s 226(3) of 5 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 the IT Act to the Chief Manager, HDFC, Fort, Mumbai stating that a sum of Rs.3,26,24,530/- is due from the Assessee and therefore he directed the bank to pay this amount from various accounts maintained by the Assessee in the bank i.e. SB, CA, FDR, TDR etc and freezed all the accounts. The prohibitory order passed by the Assessing Officer u/s 226(3) was received by the Assessee on 23.02.2017 from the Bank. On 23.02.2017 the Assessing Officer referring to the letter dated 17.02.2017 informed the Assessee the stay application was duly considered and rejected and further requested to pay the demand till 16.02.2017. The Assessee immediately approached the Ld. Commissioner on 24.02.2017 and narrated the events happened right from the hearing of stay petition of this Bench on 17.02.2017 till the rejection of the stay by the Assessing Officer by order dated 23.02.2017 and requested to direct the Assessing Officer to respect the oral orders of this Bench and withdraw the prohibitory action taken u/s 226(3) by the Assessing Officer attaching its bank accounts until the stay petition before this Tribunal is heard on 10.03.2017. The Ld. Counsel at this stage submits that the Ld. CIT did not agree with the plea of the Assessee and insisted that the Assessee to make payment of the outstanding demand in instalments. The Ld. Counsel submits that on 03.03.2017, the department withdrew Rs.1,67,04,550/- from its bank accounts and adjusted towards the tax demand. The Ld. Counsel submits that the Assessee again met the Ld. CIT on 06.03.2017 on that day the Ld. CIT informed that he will revoke the prohibitory order u/s 226(3) only upon the Assessee agreeing to further payment of instalments. The Ld. Counsel for the Assessee submits that considering the operational hazard caused by the attachment of bank accounts, the Assessee left with no choice, but had to agree for the 6 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 payment of instalments of Rs.15 lakhs per month starting from April 2017 so as to have the prohibitory order passed u/s 226(3) revoked so that the reputation of the Assessee company built over so many years may not suffer irreparable harm and damage.
6. On a perusal of the events taken place right from the filing of stay petition by the Assessee on 20.02.2017 till the Assessee filing stay petition before the Ld.CIT on 24.02.2017, the Revenue has not shown any respect to the oral directions given by this Tribunal on 17.02.2017. On 17.02.2017, we have adjourned the stay petition for the reason that no specific order was passed rejecting the Assessee's stay petition and there was no urgency as such for granting stay to the Assessee. We have directed the Ld. DR to communicate to the Assessing Officer to pass written orders on the stay petition filed by the Assessee and also not to take coercive steps for recovery of demand till 10.03.2017. In fact, the Ld. DR by letter dated 21.02.2017 written to the Assessing Officer to dispose off the stay petition of the Assessee. This letter was communicated to the Assessing Officer on the very same day i.e 21.02.2017. The later part of our oral direction not to take coercive steps for recovery till 10.03.2017 seems to have not communicated to the Assessing Officer. However, the Assessee in its stay petition explained the Assessing Officer the events happened before this Bench. However, the Assessing Officer without acting on the stay petition filed by the Assessee attached the bank accounts u/s 226(3) on 22.02.2017 and on the next day i.e. 23.02.2017 rejected the stay petition. The Assessing Officer before rejecting the stay petition without giving reasons seems to have attached all the bank accounts of the Assessee by issue of notice 7 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 u/s 226(3) of the Act. He attached the bank accounts on 22.02.2017 and rejected the stay petition of the Assessee without given reasons whatsoever on 23.02.2017 knowing very well that this Tribunal has orally directed the Ld. DR to inform the Assessing Officer to dispose of the stay petition and not to take coercive action till disposal of this stay petition filed by the Assessee before this Tribunal. Completely ignoring the directions of this Tribunal, the Assessing Officer recovered the demand to the extent of Rs.1.67 crores from the Assessee. The action of the lower authorities is highly deplorable. The Assessing Officer has not given sufficient time to the Assessee to approach the higher authorities for the stay of demand. The Ld. DR also submitted before us that the directions of this Tribunal of this Bench have been communicated to the Assessing Officer by the Ld. DR on 20.02.2017. Therefore, the approach of the Assessing Officer in trying to recover the tax demand from the Assessee is in total disregard to the direction of this Tribunal and not at all appreciable. The Assessee should have been given sufficient time to approach the higher authorities. The Assessing Officer acted in a hasty manner with complete disregard to the directions of the Tribunal. We expect Revenue officers to follow fair and transparent approach to avoid undue hardships to the taxpayers so that sense of justice and fairness may prevail. It would generate faith of taxpayers upon working mechanism of Income Tax department, which we believe shall in turn increase voluntary compliance by taxpayers.
7. In the case of Maharashtra Housing & Area Development Authority (supra), Co-ordinate Bench of this Tribunal considered a situation where the Assessing Officer has not granted reasonable time to the Assessee to take 8 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 remedial actions and attached the bank account and withdrew the amounts. In the circumstances, the Co-ordinate Bench held as under :
5. Having considered the rival submissions and careful perusal of the relevant record we note that the A.O issued a letter dated 11.11.2013 regarding recovery of outstanding demand in view of the order passed by the CIT(A) on 29.10.2013. In response to the said letter the assessee vide letter dated 13.11.2013 stated that the assessee has not received the copy of the order of the CIT(A) and further the assessee would like to pursue the course of second appeal. The assessee has also requested the A.O not to take any recovery action before the time for filing the appeal in view of the directions of the Hon'ble High Court in case of UTI Mutual Fund Vs ITO (supra). The assessee was earlier asked to make the payment of outstanding amount in instalment of Z 17.76 crores per month starting from month of September 2013 but the assessee did not agree. The A.O then wrote a letter dated 14.11.2013 and reasserted the demand without further delay failing which action in terms of section 226(3) of the Income Tax Act shall be taken. The assessee received the impugned order of the CIT(A) ON 16.11.2013 and this fact has not been controverted by the Revenue therefore the remedy with the assessee to file the appeal against the impugned order of the CIT(A) is available only after receipt of the impugned order but in the mean time the A.O has effected the recovery of outstanding sum of Rs.159,84,03,720/- by taking action u/s 226(3) on 18.11.2013 itself. Thus, it is clear that the assessee was not afforded a minimum reasonable time to take remedial steps under the law against the impugned order of the CIT(A). Even the assessee has filed the appeal against the impugned order without any wastage of time on the very next working day but the A.O without waiting the hearing and outcome of the Stay Application has taken the coercive action of recovery of the entire outstanding amount from the bank of the assessee as per Section 226(3) of the Income Tax Act. The Hon'ble High Court in case of Mahindra & Mahindra Ltd. Vs Union of India (supra) has opined in para 4 as under:9
M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 "4. In our opinion, it was highly improper on the part of the Collector and Assistant Collector to encash the bank guarantees before expiry of the statutory period of three months and in particular when petitioners had specifically in formed that the stay application is fixed for hearing on 171h February 1992. Be that as it may, we accordingly direct Respondents Nos. 2 & 3 to pay entire amount recovered by encashing bank guarantees to the petitioners within 10 days from today. On receipt of the said amount by the petitioners, they shall execute bank guarantee in favour of the Collector of Central Excise within tow weeks thereafter. It is also made clear that until disposal of the stay application bank guarantee will continue and in the event if the Tribunal rejects the application for stay, the said order shall not be executed for a period of two weeks from the date of its service on the petitioners."
6. It has been observed by the Hon'ble High court that the action of the Central Excise Authorities encashing the bank guarantees before expiry of the statutory period of filing the appeal was highly improper. Similarly, in the case of Mahindra & Mahindra Ltd. Vs Assessing Officer (supra) the Hon'ble High Court has taken a serious view of the action of the taxing authority by observing in para 9 as under:
"9. Entire action of the respondent Nos. 1 & 2 shocks our judicial conscience. Rule of law has been given a total go-bye and wilfully ignored. The Income Tax Authorities have acted in a high handed manner.
The impugned action is prima facie ab-initiovoid."
7. In the case in hand we are of the view that the A.O has taken a coercive action by ignoring the basic rule of law and the directions and guidelines issued by the Hon'bfe Jurisdiction High Court in case of UTI Mutual Fund Vs ITO (supra) as under:
10M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 "In exercising his power, the Income-tax Officer should not act as a mere tax gatherer but as a quasi judicial authority vested with the power of mitigating hardships to the assessee."
These are, we may say so with respect, sage observations which must be borne in mind by the assessing authorities. Consistent with the parameters which were laid down by the Division Bench in KEC International Ltd. (supra) and the observations in the judgment in Coca Cola (P.) Ltd.(supra). We direct that the following guidelines should be borne in mind for effecting recovery:
1. No recovery of tax should be made pending
(a) Expiry of the time limit for filing an appeal;
(b) Disposal of a stay application, if any, moved by the assessee and for a reasonable period thereafter to enable the assessee to move a higher forum, if so advised. Coercive steps may, however, be adopted where the authority has reason to believe that the assessee may defeat the demand, in which case brief reasons may be indicated.
2. The application, if any, moned by the assessee should he disposed of after hearing the assessee and bearing in mind the guidelines in KEC international Ltd. (supra);
3. If the Assessing Officer has taken a view contrary to what has been held in the preceding previous years without there being a material change in facts or law, that is a relevant consideration in deciding the application for stay;
4. When a bank account has been attached, before withdrawing the amount, reasonable prior notice 11 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 should be furnished to the assessee to enable the assessee to make a representation or seek recourse to a remedy in law;
5. In exercising the powers of stay. the Income Tax Officer should not act as a mere tax gatherer but as a quasi judicial authority vested with the public duty of protecting the interest of the Revenue while the same time balancing the need to mitigate hardship to the assessee. Though the assessing officer has made an assessment, he must objectively decide the application for stay considering that an appeal lies against his order:
the matter must be considered from all its facets, balancing the interest of the assessee with the protection of the Revenue."
8. Thus, it is clear that the Income Tax Officer being a quasi judicial authority should observed the parameters which are laid down by the Hon'ble High Court in various decisions and reasserted in the case of UTI Mutual Fund Vs ITO (supra). A similar view has been taken by this Tribunal in the case of RPG Enterprises Ltd. Vs DCIT as well as in case of Maharashtra State Electricity Board Vs JCIT. Thus, in view of the above judicial principles we hold that the A.O has misused his powers and the action of recovery from the bank amount of the assessee is a gross violation of the directions as well as the basic rule of law and principle of natural justice.
Accordingly, we direct the Revenue to refund the entire amount of Rs. 159,84,03,720/- to the assessee within 10 days from the dated of receipt of this order."
8. The Jurisdictional High Court in the case of UTI Mutual Fund Vs. ITO held as under :
9. At the present stage, it would be necessary for the Court to clarify that the issue in these proceedings is confined to whether the Revenue should be permitted to enforce the demand of Rs.9.63 12 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 crores and to take coercive steps under Section 226(3) in the form of a garnishee notice which has been issued to the bankers of the petitioner. The Court is not called upon to adjudicate at this stage on the merits of the rival contentions. From the record before the Court however it now emerges as an admitted position that the demand against the Trust is sought to be enforced against the petitioner on the basis of the provisions of Section 177(3). The Petitioner has not been independently assessed and the issue which falls for determination is whether the petitioner has made out a substantial prima facie case to seek protection against coercive proceedings at this stage pending an appeal filed by the Trust against the assessment made in respect of the Trust. Sub-section (3) of Section 177 provides that where a business which has been carried on by an association of persons has been discontinued, every person who was at the time of such discontinuance or dissolution a member of the association of persons, shall be jointly and severally liable for the amount of tax, penalty or other sum payable and all the provisions of the Act, so far as may be, shall apply to any such assessment or imposition of penalty, or other sum. Prima facie, the submission of the petitioner that the Trust itself cannot be regarded as being an association of persons finds support from a judgment of a Division Bench of this Court in Commissioner of Income Tax Vs. Marsons Beneficiary Trust.' The Division Bench of this Court in that case held that the beneficiaries of a trust cannot be construed as having set up the trust nor had they authorised the trustees to carry on business. The beneficiaries who are named in the trust as recipients of the income of the trust cannot be considered as an association of persons. Therefore, ruled the Division Bench, the trustees also cannot take on the character of an association of persons. The judgment of the Division Bench was followed subsequently by another Division Bench of this Court in L.R. Patel Family Trust v. Income Tax Officer'. We are indicating the nature of the controversy making it expressly clear that we are not rendering any conclusive determination of the Court on the merits of the issue which will arise in the appeal which has been filed by the trust and which, the Court is informed, is pending before the Commissioner (Appeals). The second submission which has been urged on behalf of the petitioner, based on the provisions of Section 61, is equally a 13 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 matter which would require careful consideration at the appellate stage. As we have noted earlier, the submission of the petitioner is that under Section 61, all income arising to a person by virtue of a revocable transfer of assets is chargeable to income tax as the income of the transferor. Under Section 63(a)(i) a transfer is deemed to be revocable if it contains any provision for the re- transfer directly or indirectly of the whole or any part of the income or assets to the transferor. The submission of the petitioner is that if at all, an assessment could have only been made in the hands of the petitioner as the transferor of a revocable trust, in which event the income would be exempt under Section 10(23D). Whether the submission should be accepted is again a matter which would have to be determined in the course of the appellate proceedings arising from the order of assessment. The petitioner has intervened before the appellate authority. In our view, the Revenue has made an unfortunate and hasty attempt to make a recovery of the demand which has been imposed on the trust pursuant to the order of assessment, against the petitioner without enabling the petitioner to take reasonable recourse to the remedies available in law. As we have noted earlier, the petitioner received the letter of demand dated 29 February 2012 on 7 March 2012. On the very same day, the petitioner moved an application for stay before the Assessing Officer. The next day, 8 March 2012, was a public holiday. The petitioner moved the CIT on 9 March 2012 with a request for intervention in the matter. The petitioner received a communication recording that the application had been disposed of, only on 13 March 2012. In the mean time a garnishee notice dated 12 March 2012 was addressed to the bankers of the petitioner calling upon them to deposit an amount of Rs.26.70 crores. Administrative directions for fulfilling recovery targets for the collection of revenue should not be at the expense of foreclosing remedies which are available to assessees for challenging the correctness of a demand. The sanctity of the rule of law must be preserved. The remedies which are legitimately open in law to an assessee to challenge a demand cannot be allowed to be foreclosed by a hasty recourse to coercive powers. Assessing Officers and appellate authorities perform quasi-judicial functions under the Act. Applications for stay require judicial consideration. Rejecting 14 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 such applications without hearing the assessee, considering submissions and indicating at least brief reasons is impermissible. The judgment of the Division Bench of this Court in KEC International Ltd. Vs. B.R. Balakrishnan3, lays down guidelines in regard to the manner in which applications for stay should be disposed of. The parameters which were laid down by the Division Bench presided over by Hon'ble Mr. Justice S.H.Kapadia (as the Learned Chief Justice of India then was) are as follows:
"(a) While considering the stay application, the authority concerned will at least briefly set out the case of the assessee.
(b) In cases where the assessed income under the impugned order far exceeds returned income, the authority will consider whether the assessee has made out a case for unconditional stay. If not, whether looking to the questions involved in appeal, a part of the amount should be ordered to be deposited for which purpose, some short prima facie reasons could be given by the authority in its order.
(c) In cases where the assessee relies upon financial difficulties, the authority concerned can briefly indicate whether the assessee is financially sound and viable to deposit the amount if the authority wants the assessee to so deposit.
(d) The authority concerned will also examine whether the time to prefer an appeal has expired.
Generally, coercive measures may not be adopted during the period provided by the statute to go in appeal. However, if the authority concerned comes to the conclusion that the assessee is likely to defeat the demand, it may take recourse to coercive action for which brief reasons may be indicated in the order.
15M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017
(e) We clarify that if the authority concerned complies with the above parameters while passing orders on the stay application, then the authorities on the administrative side of the Department like respondent No.2 herein need not once again give reasoned order.
The above parameters are not exhaustive. They are only recommendatory in nature."
Unfortunately these guidelines are now being breached by the Revenue. In a subsequent decision in Coca Cola India P. Ltd. Vs. Add!. CIT4, another Division Bench of this Court, while deprecating the conduct of the Revenue in ignoring the parameters laid down in KEC International Ltd. in disposing of stay applications also noted that the practice of attaching bank accounts even before communicating the order passed on the stay application was high handed. The Court expressed the hope that the Revenue shall ensure that such instances do not occur in future. The caution which was addressed by the Division Bench in Coca Cola India has again not been followed. In N. Rajan Nair v. ITO5, the Kerala High Court observed thus:
"In exercising his power, the Income-tax Officer should not act as a mere tax gatherer but as a quasi judicial authority vested with the power of mitigating hardships to the assessee."
These are, we may say so with respect, sage observations which must be borne in mind by the assessing authorities. Consistent with the parameters which were laid down by the Division Bench in KEC International and the observations in the judgment in Coca Cola, we direct that the following guidelines should be borne in mind for effecting recovery:
1. No recovery of tax should be made pending
(a) Expiry of the time limit for filing an appeal;16
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SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017
(b) Disposal of a stay application, if any, moved by the assessee and for a reasonable period thereafter to enable the assessee to move a higher forum, if so advised. Coercive steps may, however, be adopted where the authority has reason to believe that the assessee may defeat the demand, in which case brief reasons may be indicated.
2. The stay application, if any, moved by the assessee should be disposed of after hearing the assessee and bearing in mind the guidelines in KEC International;
3. If the Assessing Officer has taken a view contrary to what has been held in the preceding previous years without there being a material change in facts or law, that is a relevant consideration in deciding the application for stay;
4. When a bank account has been attached, before withdrawing the amount, reasonable prior notice should be furnished to the assessee to enable the assessee to make a representation or seek recourse to a remedy in law;
5. In exercising the powers of stay, the Income Tax Officer should not act as a mere tax gatherer but as a quasi judicial authority vested with the public duty of protecting the interest of the Revenue while at the same time balancing the need to mitigate hardship to the assessee. Though the assessing officer has made an assessment, he must objectively decide the application for stay considering that an appeal lies against his order the matter must be considered from all its facets, balancing the interest of the assessee with the protection of the Revenue.
10. In view of the aforesaid discussion, we are of the view that the assessee in the present case has a serious issue to urge as regards the legitimacy of the demand which has been raised by the impugned notice dated 29 February 2012, including in regard to the applicability of Section 177(3) of the Income Tax Act, 1961 on which the demand has been founded. The assessee has intervened in the 17 M/s Fractal Analytics Pvt. Ltd.
SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 appeal filed by the trust before the Commissioner (Appeals). We direct that pending the disposal of the appeal and for a period of six weeks thereafter, the Revenue shall not take any coercive steps against the petitioner for enforcing the demand as contained in the communication dated 29 February 2012. The Revenue shall also refrain from taking any coercive steps or from enforcing the notice issued by the Assessing Officer on 12 March 2012 under Section 226(3). The Attachment, if any, that has been levied shall stand lifted."
9. In this case, the Revenue has not adhered to the guidelines issued by the Jurisdictional High Court in the above case. In the above circumstances, we quash the notice issued u/s 226(3) dated 22.02.2017 issued to the Chief Manager, HDFC bank, Fort, Mumbai and direct the Assessing Officer to lift all the attachments on all the bank accounts. We also direct the Assessing Officer to redeposit the amounts recovered from the bank accounts of the Assessee by 31.03.2017 after retaining Rs.40 lakhs from out of the amounts collected from the bank accounts. We grant stay of the balance tax demand for the impugned assessment year 2012-13 till the disposal of appeal or 180 days whichever is earlier. The appeal is posted for early hearing on 20.04.2017. Registry is directed to issue notice to the parties. We make it clear that the Assessee shall not seek adjournment without reasonable cause. The stay shall automatically gets vacated if adjournment is sought without reasonable cause and the revenue may proceed to recover the outstanding taxes.
10. In the result, stay application is allowed as indicated above.
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SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 Order pronounced in the open court on the 15th day of March 2017.
Sd/- Sd/-
ASHWANI TANEJA C.N.PRASAD
ले खा सदस्य / न्याधयक सदस्य /
ACCOUNTANT MEMBER JUDICIAL MEMBER
मुुंबई / Mumbai; दिनाुं क / Dated 15/03/2017
LR, SPS
19
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SA 73/Mum/2017 arising out of ITA No.1024 /Mum/2017 आदे श की प्रधिधलधप अग्रे धिि / Copy of the Order forwarded to :
1. अपीलार्थी / The Appellant
2. प्रत्यर्थी / The Respondent.
3. आयकर आयुक्त(अपील) / The CIT(A), Mumbai.
4. आयकर आयुक्त / CIT
5. दवभागीय प्रदतदनदि, आयकर अपीलीय अदिकरण, मुुं बई / DR, ITAT, Mumbai
6. गार्ड फाईल / Guard file.
सत्यादपत प्रदत //True Copy// आदे शानसार/ BY ORDER, सहायक पुं जीकार (Asstt. Registrar) आयकर अपीलीय अधिकरण, मुुं बई / ITAT, Mum