High Court Warns AO Of Contempt Action For Hasty Tax Recovery + Book Review

 

Dear Subscriber,

A. T. Kearney India Pvt. Ltd vs. ITO (Delhi High Court)

S. 226: AO warned of contempt action for seeking to overreach ITAT's stay order

The assessee filed a stay application before the Tribunal and informed the AO about the same. Thereafter, the Tribunal heard the matter on 14.02.2014 and granted stay of the demand. Despite this, the AO attached the assessee's bank account on 19.02.2014 and withdrew the proceeds. The assessee filed a Writ Petition to challenge the attachment. The AO defended his action on the ground that he was not present during the hearing of the stay application and was not intimated of the stay granted by the Tribunal. HELD by the High Court allowing the Petition:

The income tax authorities were represented by the CIT-DR, before the Tribunal. The order on the stay application was also pronounced in open Court on that date. In these circumstances, the submission of the revenue that the concerned AO was not intimated cannot be accepted. If such an argument was made before this Court, where orders are pronounced in Court in the presence of counsel, it would certainly not be accepted, and in fact would be seriously viewed. In the facts of this case, it clearly amounts to overreach of the interim order of the Tribunal; in a similar situation, this Court itself would possibly be initiating contempt proceedings. In these circumstances, the Court is of the opinion that the respondent should lift the attachment and ensure that the amounts recovered are deposited back in the petitioner's account within a week from today. A copy of the present order shall be marked to the Central Board of Direct Taxes separately and communicated.

See also MHADA (Bom HC) where the "conscience of the Court was shocked" at the illegal coercive action of the AO. See also Bharti Airtel (ITAT Del) where a powerful argument has been made that an accountability mechanism should be set up to rein in irresponsible & lawless action of the AO

Get This Book If You Are Looking For The Meaning Of Words And Phrases

Hon'ble Justice R. V. Easwar rightly says that the book "Direct Taxes Glossary" by Hon'ble Shri. Rajendra, Accountant Member, ITAT, fulfils the long-felt need of tax practitioners for a handy digest of case laws

Regards,

 

Editor,

 

itatonline.org

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