11 September 2014
In our case Income Tax Officer has created high pitch I.T. demand for A.Y. 2009-10 by addition of purchase amount as purchases are made from hawala / suspicious dealers. Our case is in appeal before Commissioner of Income Tax & we have already submitted all documents such as stock register, bank statement & other documents to prove movement of goods & payment by A/c payee cheque. The Commissioner of Income Tax called for Remand report from Assessing Officer & submit the report to CIT(A) within 3weeks. The assessing officer has passed more than 3 months in sending his remand report without request for extension of time from CIT (A).During the pendancy of remand report Can Assessing Officer ask us in writing to pay total I.T. demand along with interest u/s 220(2) of I.T. Act & treating us defaulter in payment of I.T. dues & attack our bank Account for recovery proceeding u/s 226(3)..???? Meanwhile we have made application of stay of I.T. dues to CIT(A) which is pending.
11 September 2014
It is also incorrect to believe that the AO alone has the interest of the Government in mind and that the appellate authorities do not take care of such interest. The fact that the power is given to such authorities to consider the request for stay confirms that the legislature has reposed full faith in such authorities when it comes to deciding in the matter of recovery of taxes and the stay thereof. Their wisdom behind not disposing the application pending before them should not be lightly questioned and used to by-pass their authorities.
It is an accepted position in law that a power when conferred on an authority shall be exercised by such authority when requested to do so. Such a power vested in one authority shall not be frustrated by another authority pending the exercise of the power. The law no where requires for a time frame for passing of an order in response to the stay application leaving the same to the wisdom of the authorities to whom it has been addressed.
In fact, there is a serious flaw in the argument that the proceedings can be stayed only when an order staying the recovery is specifically passed by the appellate authorities. The job of the assessee is to make an application as required by the law. He has no power to prevail upon the authorities to dispose the application within the time and in the manner desired by the AO. Even in cases where the time for disposal is prescribed, the assessee plays no role in prevailing upon the authorities to dispose the application within the time prescribed.
The fact that the power is given to the assessee to make an application for stay, clearly convey that no action can be taken till such time the application is rejected. To hold any other view contrary to this proposal will, as said earlier will render the power redundant. For example, take the case of a person who has made an application to the President for mercy on being sentenced to death. Now, in such a case if the person is hanged before the President even considered the petition will make the right of petition a farce in asmuchas the life of the deceased convict cannot be restored by those who hanged him, assuming that the petition is considered favourably by the president after his death.
The Andhra Pradesh High Court in Anab-e-Shahi Wines & Distilleries Pvt. Ltd. v. ADC, 98 STC 386, held that so long as an order not passed on the stay application, resort to coercive methods to recover the amount of tax under the assessment order, which was the subject matter of appeal, by initiating garnishee proceedings were not proper.
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