Govind Nagar Sugar Ltd. vs Commissioner of Income Tax

This writ petition under article 226 of the Constitution of India is directed against : (i) the notice, dated 4-10-2002, issued by the Income Tax Officer Ward 12(2) New Delhi, attaching the bank accounts of the petitioner in the Central Bank of India, Basti, Uttar Pradesh for recovery of the outstanding demand pending against the petitioner in respect of assessment year 1999-2000; and (ii) the order dated 11-10-2002, passed by the Commissioner of Income Tax, Delhi-IV, New Delhi rejecting the application of the petitioner for stay of the said demand.

The main grievance of the petitioner is that on the one hand the Commissioner (Appeals) is not disposing of petitioner''s application for stay of demand, despite the fact that even arguments in the appeal itself have already been beard, where after the petitioner has also filed its written submissions on 1-10-2002 and, on the other, the department is taking coercive steps to recover the amount in dispute. Mr. Syali, learned senior counsel for the petitioner, would urge that even if it is assumed for the sake of argument that the additions /disallowance made by the assessing officer, which has resulted in an additional demand of more than Rs. 2 crores, are sustained by the appellate authority, still, on account of huge brought forward losses, the income so computed by the assessing officer shall fall short of these losses, meaning thereby that no amount towards tax, etc., shall be payable by the petitioner in respect of the relevant assessment year.

Mr. R.D. Jolly, learned senior standing counsel for the respondents, who has put in appearance on advance notice, on the other hand submits that the respondents had no option but to attach the bank accounts of the petitioner because the petitioner had failed to comply with the order dated 5-8-2002, passed by the assessing officer granting conditional stay on the recovery of the demand. It is urged that in terms of the said order the petitioner was required to deposit. 50 per cent of the outstanding demand by 20-8-2002 but it failed to do so. It is also pointed out that it was only in October 2002 that the petitioner approached the Commissioner (Appeals) as also the jurisdictional Commissioner for stay of the demand whereas the assessing officer had passed the order granting conditional stay in August 2002.

Having regard to the aforenoted rival stands and bearing in min the fact that after the passing of order dated 5-8-2002, in was only ill the second week of October that the petitioner thought of moving the Commissioner (Appeals) as also the jurisdictional Commissioner for stay of the demand, we find it difficult to hold that the action taken by the respondents in attaching the bank accounts of the petitioner is arbitrary or unwarranted. If the petitioner was aggrieved of the order dated 5-8-2002, it could have promptly taken appropriate steps in the matter.

However, in view of the fact that Commissioner (Appeals) has already heard petitioner''s appeal and in fact has called for comments of the assessing officer on the written submissions filed by the petitioner, we hope and trust that the Commissioner will try to dispose of the appeal as expeditiously as practicable. We understand that the appeal is now coming up for hearing on 29-10-2002. If for some unavoidable reason the Commissioner (Appeals) is unable to decide the appeal on merits expeditiously, he shall take a final decision in the petitioner''s stay application, dated 16-10-2002, within two weeks from today.

The petition and the application for interim relief are disposed of in the above terms.