INCOME TAX ACT, 1961

Section 226

Recovery - Other modes of recovery - Application for extension of stay pending before Tribunal -

Assessee filed this appeal before Tribunal on the ground that Department had started resorting to coercive means for recovering outstanding demand. Department had carried out a recovery survey at their premises and issued summons to Director under section 131 to appear at camp office on the same day. Thereafter, statement of director was recorded and bank accounts have been attached under section 226(3). This was despite the fact that application for extension of stay was pending before Tribunal. This act on the part of department was in utter disregard to Judicial Discipline and canons of equity and causing enormous hardship to assessee. Held: Revenue authorities should have at least waited for disposal of stay petition by Tribunal. In such circumstances, garnishee proceedings initiated by revenue authorities should be placed under suspension till the stay petition is disposed of. Operations of all garnishee notices issued by Revenue authorities on the bankers of assessee should remain suspended. Revenue authorities were further directed not to resort to, or continue with, any other coercive measures also, in meantime, to recover the disputed outstanding demands.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

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