Contention of the Assessee :- The action of the petitioner revenue in not only attaching the petitioner’s bank account but also withdrawing the amount of Rs.159.84 crores on 18 November 2013 when the stay application was already fixed for hearing before the Tribunal on 22 November 2013 was only done with a malafide intent to foreclose respondent No.2 from obtaining any stay from the Tribunal. Besides rendering nugatory the powers of the Tribunal in terms of proviso to Section 254(2A) of the Act to grant stay in respect of any proceeding relating to an appeal filed Court before it. The action of the petitioner was a malafide attempt to render the Tribunal powerless. Therefore, in the above circumstances the impugned order cannot be faulted with as it only corrects an unjust and arbitrary exercise of powers by the Assessing Officer in recovering the amount of Rs.159.84 crores from bank account of respondent No.2.
The Act provides a period of sixty days to an assessee to file an appeal from the order of CIT(A) to the Tribunal. This Court in the matter of UTI (supra) has laid down the guidelines for effecting recovery of dues.
The action of the petitioner revenue, in particular, the Assessing Officer was in defiance of the above directions of this Court in UTI Mutual Funds vs. ITO (supra) wherein this Court had inter alia directed the revenue that no recovery of tax should be made before expiry of the time limit for filing an appeal before the higher forum has expired. The Court also has directed that when the bank account has been attached the revenue would not withdraw the amount unless it has furnished a reasonable prior notice to the assessee to enable the assessee to seek recourse to a remedy in law. The action of the petitioner revenue in not only attaching the bank account but withdrawing the money from the bank was before the expiry of the time limit for filing appeal was only with a view to foreclose the option of respondent No.2 of obtaining a stay from the Tribunal. The respondent No.2 had received the order of the Commissioner of Income Tax (Appeals) only on 16 November 2013. Respondent No.2 had 60 days time to prefer appeal there from. However, the petitioner revenue attached the bank account of respondent No.2 on 18 November 2013 itself i.e. within two days of communication of the order of the Commissioner of Income Tax (Appeals) by respondent No.2. Further, not only the bank account has been attached on 18 November 1013 but the amounts were forcibly withdrawn on that date itself from the bank Court so as to completely foreclose the remedy available to respondent No.2 under the Act. Long years ago in East India Commercial vs. Collectorof Customs AIR 1962(SC) 1893 the Supreme Court had observed that the law declared by the High Court is binding on all authorities functioning within the State over which the High Court has jurisdiction. The decision of this Court in UTI Mutual Funds (supra) was binding upon the petitioner revenue and the Assessing Officer.
Therefore, the above action on the part of the Assessing Officer was against the elementary principles of rule of law. The State is expected to act fairly. The undue haste on the part of the Assessing Officer in recovering a sum of Rs.159.84 crores was not only contrary to the binding decisions of this Court but also shocking to the judicial conscience. The entire action appears to have been directed to make the Tribunal and respondent No.2 helpless so that no relief can be granted in favour of respondent No.2. Leaving aside the case laws in favour of respondent No.2, on first principle itself no appellate authority and much less the Tribunal can be a silent spectator to the arbitrary and illegal actions on the part of the Assessing Officer so as to frustrate the legal process provided under the Act.