HC sees red over 1-day I-T notice

Last updated: 06 April 2007


A division bench of the Bombay high court on Monday lashed out at the income tax department for having allegedly recovered TDS dues from an assessee within a day of serving a demand notice.

The assessee's plea for two days to reply on the recovery process was not granted, the assessee told the high court in a writ petition heard on Monday.

The assessee, Mahindra & Mahindra, the auto major, was served a notice on March 27 by the income tax officer, TDS, Nashik, asking them to pay up Rs 29 crore towards TDS. The company asked the department to give them time to reply till March 29.

On March 28, apparently, a joint commissioner of income tax in the Nashik range initiated 'garnishee proceedings' to recover the money from the assessee's bank account.

The money was recovered from the account on the same day. The company then moved a writ petition before the high court on March 29.

The division bench of justices S Radhakrishnan and V C Daga heard the company's plea on Monday. The judges took a serious view of the conduct of the department's officers and ordered that the amount be deposited back with the court by Thursday.

They have also asked the ITO to show cause as to why contempt proceedings should not be initiated against him since there is a high court precedent allowing the assessee 30 days to appeal against a demand notice.


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