ANIL KUMAR BANERJEE Vs. UNION OF INDIA

JUDGEMENT

(1.) Assailing the notice issued under section 226(3) of the Income Tax Act, 1961, the petitioner has filed the instant writ petition before this Court. The said notice is sought to be challenged primarily on the ground that before issuing the order of attachment, no prior notice was served on the petitioner. In support of the aforesaid contention reliance is placed on a coordinate bench decision in the case of Pumima Das v. Union of India & Ors., 2010 329 ITR 278. The petitioner further attacked the action of the authorities for attaching the bank account on the plea that keeping an application under section 220(6) of the said Act as well as an application for stay filed before the appellate authority for nearly two years, the authorities could not have proceeded hastily in passing an order for attachment. When the matter appeared at the motion stage Md. Nizamuddin, learned advocate for the department was directed to take instruction on the above issues. The facts as it appear, are not disputed. On the basis of a proceeding initiated by the department, an ex parte order of assessment was passed by the assessing officer. The said order was assailed before the CIT (appeals) which is still pending. The petitioner approached the assessing officer under section 220(6) of the said Act on 1st March, 2012 with a prayer to treat him nondefaulter.

(2.) Mr. Shome, learned advocate for the petitioner vehemently submits that filing of an application, treating the assessee as non-defaulter, is not a mere formality. The quasi-judicial authorities are statutorily bound to apply their mind on the said application both objectively and dispassionate manner. Mr. Shome appears to have inspired by a division bench judgment of the Bombay High Court rendered in the case of Society of the Franciscan (Hospitaller) Sisters v. Deputy Directors of Income-Tax (Exemptions) & Ors., 2013 351 ITR 302. One look at the judgment of the division bench of the Bombay High Court rendered in the above decision, it could be culled out is that the authorities who are discharging quasi-judicial functions cannot keep the application for stay pending and on the other hand to proceed for recovery by taking recourse to section 226(3) of the said Act. The division bench in univocal term held that the application for stay is not a meaningless formality and the fairness on the part of the quasi-judicial authority is an intrinsic element of such functions in these words:-

(3.) Md. Nizamuddin learned advocate for the department is very much vocal in contending that the division bench of the Bombay High Court decides the matter in the special facts involved therein. He relies upon the relief granted by the division bench in the said case wherein the division bench directed 75 per cent of the tax to be deposited with the department by the assessee. This Court does not find any quarrel to the proposition that the decision of a case is decided on the facts involved therein as the additional or a little difference on the fact made tilt the decision in one way or other. The ratio which could be culled out from the above judgment for its a binding efficacy is that the authorities while keeping the application for stay in abeyance should not have hastily proceeded to pass an order for attachment or to take any coercive measures. In the present case an application for stay before the assessing authority, was filed on 1st March, 2012. There is no explanation offered by the department as to why such application is not disposed of expeditiously. Md. Nizamuddin tried to give an explanation at the bar that the said application is bereft of any averments which may justify the invocation of the bars provided under section 220(6) of the said Act. Such submissions have no foundation for the simple reason that the authorities have not set in motion the said application but have kept the same in suspended animation. Even if the application is devoid of any explanation and/or averments there is no impediment on the part of the authorities to decide the same, in one way or the other. Keeping the application for stay pending for nearly two years and thereafter proceeded to pass an order of attachment amounts to proceeding in haste and such action cannot be said to be free from arbitrariness and unreasonableness.