Case Law Details
Paramount Health Services Vs. ACIT (Bombay High Court)
Pursuant to orders u/s 201(1) & 201(1A), the assessee was liable to make payment of Rs. 59.06 crores for three years. The AO rejected the stay application and directed that 50% of the demand be paid. A part of the demand was paid by the assessee. The assessee filed a stay application before the CIT.
Of the three years, the CIT granted stay for two years and directed the AO to realise the demand for AY 2010-11 amounting to Rs. 7.69 crores. No reasons were given for the decision. Despite the stay granted by the CIT, the AO issued garnishee notices u/s 226 (3) for the entire amount of Rs. 59.06 crores. The assessee filed a writ petition to challenge the same. HELD allowing the Petition:
(i) The action of the AO in issuing garnishee notices for the entire demand despite the partial stay by the CIT shows defiance and non-application of mind;
(ii) There is no reasoning in the CIT’s order for refusing to stay the demand for AY 2010-11 despite KEC International v. B.R. Balakrishnan 251 ITR 158 where parameters have been laid down to govern the manner in which applications for stay should be dealt with. Either the CIT is ignorant of the law laid down by the Court or has acted in breach of the principles enunciated in the judgement. In either view of the matter, the entire approach of the CIT (TDS) is thoroughly misconceived. In KEC International it was noted that in a large number of matters orders are passed perfunctorily by the department only with an idea of effecting recovery before March 31, though such orders could have been passed earlier in detail and after recording proper reasons. The law laid down by the Division Bench has not led the authorities to act in compliance. This is an unfortunate state of affairs;
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I am afraid, Mr. Jaspal has missed the point I made by specifically wrote the word “EXPENSIVE” in BOLD letters about the ITAT. The real situation is totally contrary to what he thinks about the actual COST OF JUSTICE available there. What I have written is not only from about 40 years of experience in anti-fraud/tax-evasion/vigilance duties, but from interacting with several professionals, tax payers, justice-seekers, serving and ex-members of the tribunal, many honest judges, various honest and truly kind (but backboneless) officers of the IT department and, of course, our very own anti-corruption macinery’s
top echelons who receive complaints of coprruption against the hon’ble men manning the benches from the top to bottom. The truth is very bitter indeed-not different at all from the IT department’s corruption. One only hopes that the chain of the
persons involved in the red-handed apprehension of a Kolkata CA and his going underground will one day become public through some spirited anti-corruption organisation like the Parivartan (amazingly started by a very young and courageous officer who resigned from the IRS!), the Transparency International India, etc., filing RTI application urging the CBI to disclose the same. The buck truly goes high and higher and highest and God knows where is starts!
Kudos to TDS. He is right on spot except the Tribunal part. I think assessee’s do get justice at the ITAT level but the ITAT is unaffordable to small assessees. They are the worst sufferers. Not only coercive methods are used against them for recovery but their appeals are indefinitely put on hold because of low revenue potential. CIT (Appeals), except a few honourable exceptions, abuse their power in case of high demand cases to extort money from the assessees. Some of the tactics are:
(i) not hearing the appeals on a continuous basis (suddenly the hearing is adjourned sine die for no rhyme or reason),
(ii) not passing the orders months after the appeals are finally heard and in the meantime they get transferred and the new CIT hears the appeal all over again,
(iii) not taking any steps to ensure that AO’s submit remand reports within the time given to them,
(iv) asking for AO’s comments on piece meal basis.
The purpose is obviously to delay the disposal of appeal so that the AOs get on the nerves of the assessees for recovery of demands and the assessee is forced to strike the deal with CIT(A)to expeditiously dispose off the appeal.
I am aware of certain appeals involving low demands (3 to 5 lacs) which have been pending for 4 to 9 years despite hearing having cocluded long time back.
It is inconceivable that CBDT is not aware of the sorry state of affairs. If they are indeed unaware, they are not fit to be occupying their positions.
With due respect, the Hon’ble High Courts may not know that the smaller tax payers cannot afford to eithe pay bribes at all levels including the appellate authorities of the highest levels and can also not go upto the High Courts-not even the Tribunal which is also EXPENSIVE. Who will think of their plight with hundreds of CCITs trying to extract money or under pressure from higher authorities direct the lower authorities to attach all bank accounts in all cases irrespective of the merits of the appeals before the CIT appeals? Demands are raised in deliberately made high pitched assessments and even when 1st appeal is pending AOs without even considering stay applications attach bank a/cs even of salaried and retired people. CIT appeals are legally empowered to entertain stay applications as per HC judgements but they prefer making money for giving tax relief (as in Tribunal also)and without applying mind. 90% of CIT admn and appeal dont know how to draft orders-their staff or professionals bring drafts (with cash) of orders wanted. Taxpayer has to pay through their nose the bribes at every stage, since Ombudsman’s post is also not given to honest persons whose integrity is impeccable. Recovery is a very very lucrative posting in IT deptt.