Maharashtra Housing & Area Development Authority vs. ADIT (ITAT Mumbai)

COURT:
CORAM:
SECTION(S):
GENRE:
CATCH WORDS:
COUNSEL:
DATE: (Date of pronouncement)
DATE: November 29, 2013 (Date of publication)
AY:
FILE:
CITATION:

Click here to download the judgement (MHADA_tax_recovery.pdf)


AO’s action of recovering outstanding taxes without affording reasonable time to take remedial steps is a misuse of powers and a gross violation of the directions laid down by the Courts. AO has to refund the taxes recovered

The assessee received the order of the CIT(A) on 16.11.2013. It filed an appeal before the Tribunal on 18.11.2013 which was the next working day. The assessee also filed an application before the Tribunal requesting stay of demand. The said application was fixed for hearing on 22.11.2013. However, the AO, without awaiting the outcome of the stay application, attached the assessee’s bank account u/s 226(3) on 18.11.2013 and withdrew Rs. 159.84 crore. The assessee argued before the Tribunal that the coercive action of the AO was wrong because (i) the AO had taken coercive action before the expiry of time of filing the appeal against the order of the CIT(A), (ii) the action was taken even prior to the disposal of the stay application by the Tribunal and (iii) no prior notice was given to the assessee before taking the recovery action u/s 226(3). HELD by the Tribunal:

The action of the AO in recovering the outstanding without affording the assessee minimum reasonable time to take remedial steps is a misuse of powers and a gross violation of the directions laid down by the Courts as well as the basic rule of law and principles of natural justice. Accordingly, we direct the Revenue to refund the entire amount of Rs. 159.84 crore to the assessee within 10 days from the receipt of this order (Mahindra & Mahindra Ltd UOI 59 ELT 505, Mahindra & Mahindra W.P. 2164/2007, UTI Mutual Fund 345 ITR 71 (Bom), RPG Enterprises 251 ITR 20 (Mum) & MSEB 81 ITD 299 (Mum) followed)

3 comments on “Maharashtra Housing & Area Development Authority vs. ADIT (ITAT Mumbai)
  1. Balwant Taneja says:

    The action of AO is against spirit of law of natural justice. Revenue authorities should issue appropriate instructions to the subordinate offices

  2. Parantap Chandurkar says:

    It is just not enough for the Tribunal to express unhappiness at the assessing authority’s misuse of powers and a gross violation of the directions laid down by the Courts as well as the basic rule of law and principles of natural justice. It ought to have recommending to the Finance Department to initiate stern action against him.

    Parantap Chandurkar

  3. J.J.Juthani says:

    I fully agree with the view expressed by Mr.Parantap Chandurkar and over above that Court should take stern action against concerned officer and he should be penalized

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