CRC Limited Employees Gratuity Fund Vs PCIT (Madras High Court)
The Madras High Court addressed a writ petition filed by CRC Limited Employees Gratuity Fund challenging an order dated December 31, 2024, which attached their bank account. The attachment was issued by the second respondent under Section 226(3) of the Income Tax Act, 1961. This action occurred while the Fund’s appeal against an assessment order for the Assessment Year 2022-2023 was pending before the third respondent. The Fund had initially filed a ‘Nil’ income tax return, which was accepted under Section 143(1). However, a subsequent assessment under Section 144 read with Section 144B led to a disputed tax demand. Consequently, the Fund filed an appeal and a stay petition against the recovery of the disputed arrears. Despite the pending stay petition and appeal, recovery proceedings were initiated, culminating in the bank account attachment.
The learned counsel for the petitioner argued that the attachment was unwarranted given the pending appeal and the Fund’s submissions. The Standing Counsel for the respondents assured the court that the third respondent would consider the appeal on its merits and pass a suitable order within a timeframe set by the court. Taking these submissions into account, the Madras High Court directed the third respondent to consider the Fund’s appeal, filed on April 8, 2024, on its own merits and issue an appropriate order within two months from the date of receiving a copy of the court’s order. The court explicitly stated that it had not expressed any opinion on the merits of the case, leaving it open for the third respondent to consider all aspects independently. With these directions, the writ petition was disposed of, and there was no order regarding costs. The connected miscellaneous petitions were also closed.
