spb/wpl-873-2020.doc IN HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION (L.) NO. 873 OF 2020 Mansukhlal Amritlal Modi, Petitioner. Mumbai -400071. V/s. Income Tax Officer Ward - Respondents.16(3) (1), Aaykar Bhavan, Mumbai and Ors. Mr. Dharan V. Gandhi, Advocate for Petitioner. Mr. Suresh Kumar, Advocate for Respondents. CORAM : UJJAL BHUYAN AND MILIND N. JADHAV, JJ. DATE : MARCH 19, 2020.P.C. :1 Heard Mr. Dharan Gandhi, learned counsel for Petitioner and Mr. Suresh Kumar, learned standing counsel, Revenue, for Respondents.2 By filing this petition under Article 226 of Constitution of India, Petitioner has assailed legality Borey 1/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46 spb/ wpl-873-2020.doc and correctness of impugned order dated 31.01.2020 passed by Respondent No. 1 - i.e. Income Tax Officer,Ward -16(3)(1), Mumbai, calling upon Petitioner to pay 20% of demand as pre-condition for stay of demand; failing which it was stated that demand would be enforced and coercive measures would be taken to recover demand. 3 Petitioner is assessee under Income Tax Act,1961 (briefly Act hereinafter). Assessment status of Petitioner is that of resident in dividual. Petitioner is under assessment jurisdiction of Respondent No.1. For assessment year 2012-2013, it was found that Petitioner did not file return of income. Taking view that income of Petitioner had escaped assessment, notice under section 148 of Act was issued; where-after assessment order was passed on 23.12.2019 by Respondent No. 1under section 143(3) read with section 147 of Act. Borey2/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/wpl-873-2020.doc4 In assessment order,Assessing Officer noted that Petitioner had sold agricultural land in Gujarat of which Petitioner was co-owner.It was also noted that amount received pursuant to sale transaction of said agricultural land was not disclosed by Petitioner. Therefore, Assessing Officer treated sale transaction amount of Rs. 2,62,05,343 as unexplained income of Petitioner under section 69-A of Act and added same to income of assessee. 5 Pursuant thereto notice of demand under section 156 of Act dated 23.12.2019 was issued by Respondent No.1 to Petitioner, informing Petitioner that amount of Rs.1,57,19,310.00 was demanded due which was required to be paid by Petitioner.6 Aggrieved by impugned order of assessment, Petitioner preferred appeal before Borey 3/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/ wpl-873-2020.doc Commissioner of Income Tax (Appeals)-7, Mumbai, also referred to as first appellate authority, on 18.01.2020 for which acknowledgment number 293129600180120 was given.7 In meanwhile, Petitioner submitted application dated 22.01.2020 before Respondent No. 1 for stay of demand which was received in office of Respondent No.1 on 27.01.2020. Petitioner submitted that for assessment year under consideration, he had in fact filed return of income under section 139 of Act declaring total income of Rs. 3,52,945.00.Petitioner mentioned that against decision to add amount of Rs. 2,62,05,343.00 to his income as unexplained income under section 69-A of Act, he has preferred appeal before first appellate authority. On merit also Petitioner stated that he was co-owner of agricultural property situated at Gujarat. In course of assessment of other twoco-owners, namely, Smt. Atitiben Patel and Shri Borey4/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/wpl-873-2020.doc Goswami Budhigir, alleged sale proceeds were added to their income as on protective basis. In appeal before first appellate authority by co-owners, first appellate authority set aside addition by taking view that no addition could have been made to income of appellants (co-owners) and other co-owner meaning thereby Petitioner. first appellate authority, therefore, directed deletion of addition made in case of other two co-owners.In stay application, Petitioner further stated that he is senior citizen of about 87 years of age. Though he is Advocate by profession, because of old age and ill health, he is no longer in legal practice. Because off requent hospitalization and medical treatment his financial condition is not sound.That apart his bank account in PMC Bank could not be operated because of moratorium imposed on bank for various reasons. In these circumstances, Petitioner prayed for complete stayof demand and not to take coercive action. Borey 5/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/ wpl-873-2020.doc8 By order dated 31.01.2020, Respondent No. 1called upon Petitioner to pay 20% of demand asper instant CBDT Circular and to seek stay of there maining demand from him on furnishing of evidence pertaining to payment of 20%. He was informed that ifthere was no compliance on or before 04.02.2020, thedemand would be enforced and coercive measures would be taken to recover same.8.1 According to Petitioner, this order dated 31.01.2020 was received by him on 07.02.2020.9 Learned counsel for Petitioner submits that before impugned order dated 31.01.2020 was received by Petitioner on 07.02.2020, Respondent No. 1 had already initiated coercive steps by attaching bank accounts of Petitioner on 06.02.2020,more particularly bank account held by Petitioner in in HDFC Bank, Chembur, Mumbai, bearing Account No. 4251570000839. It is submitted that Borey6/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/ wpl-873-2020.doc entire available balance in said account has been withdrawn by Respondent No. 1.10 Mr. Gandhi submits that after order dated 31.01.2020 was passed, he had approached Respondent No.2 i.e. Principal Commissioner of Income Tax -16,Mumbai on 07.02.2020 with application for stay of demand. However, Respondent No. 2 rejected said application on 03.03.2020, by calling upon Petitioner to pay 20% of demand .11Mr. Suresh Kumar, learned standing counsel,revenue, appearing for Respondents, however,supports thest and taken by Respondents.According to him demand being very high,Respondents have been reason able in insisting payment of only 20% of demand. He further submits that regarding claim of Petitioner on merit same will be dealt-with by first appellate authority in appeal proceeding. He, therefore, submits that Borey7/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/ wpl-873-2020.doc there may not be any blanket stay on entire demand raised by Revenue. 12 We have considered submissions made by learned counsel for parties and given our due consideration.13 This court in UTI Mutual Fund vs. Income Tax Officer, 345 ITR 71, had laid down series ofguidelines for revenue authorities to follow while considering applications for stay of demand. This court referred to earlier guidelines issued by this courtin KEC International Limited vs. BR Balakrishnan- 251 ITR 158 - and thereafter, directed that following guidelines should be borne in mind while effecting recovery : 1. No recovery of tax should be made pending(a) Expiry of time limit for filing appeal;(b) Disposal of stay application, if any, movedby assessee and for reasonable period there after to enable assessee to move Borey8/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/wpl-873-2020.doc higher forum, if so advised. Coercive steps may, however, be adopted where authority has reason to believe that assessee may defeat demand, in which case brief reasons may be indicated. 2. stay application, if any, moved by assessee should be disposed of after hearing assessee and bearing in mind guidelines in KEC International Ltd. (supra); 3. If Assessing Officer has taken view contrary to what has been held in preceding previous years without there being material change in facts or law, that is relevant consideration in deciding application for stay; 4. When bank account has been attached, before withdrawing any amount therefrom, reasonable prior notice should be furnished to assessee to enable assessee to make representation or seek recourse to remedy in law; 5. In exercising power of stay, Income Tax Officer should not act as mere tax gatherer but as quasi judicial authority vested with Borey 9/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/wpl-873-2020.doc public duty of protecting interest of Revenue while at same time balancing need to mitigate hardship of assessee. Though assessing officer has made assessment, he must objectively decide application for stay considering that appeal lies against his order : matter must be considered from all its facets, balancing interest of assessee with protection of Revenue.14 Without expressing any opinion on merit, we find that Respondent No. 1 while passing impugned order dated 31.01.2020 did not at all consider various issues raised by Petitioner in his stay application and merely called upon Petitioner to pay 20% of demand.This court in UTI Mutual Fund (supra)has made it abundantly clear that assessing authority while considering stay application has to act as quasi judicial authority,which means that he has to apply his mind to all relevant factors and thereafter, take decision which is just, fair and reasonable.This court had highlighted Borey 10/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/ wpl-873-2020. doc that though Assessing Officer had made assessment, nonetheless at time of deciding stay of demand, he must objectively decide application for stay considering that appeallies against order which in fact has been filed in present case.We find that order dated 31.01.2020 is devoid ofany reasons which reflects non-application of mind and therefore, cannot be sustained. Consequentially, action of attaching bank account of Petitioner inthe HDFC Bank, Chembur, Mumbai cannot also be justified.15 Accordingly, impugned order dated 31.01.2020 is hereby set aside and quashed. Further,the attachment of bank account of Petitioner being Account No. 4251570000839 in HDFC Bank,Chembur, Mumbai, is also set aside. Borey11/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46spb/wpl-873-2020.doc16In view of above, subsequent order dated 03.03.2020 passed by Respondent No. 2 would also stand set aside and quashed.17The matter is remanded back to Respondent No. 1 for fresh consideration of stay application of Petitioner dated 22.01.2020 in accordance with law,keeping in mind discussion made above. 18Let stay application be decided within period of six weeks from today .19 During this period, no coercive steps shall betaken against Petitioner and as indicated above,the attached bank account shall now be de-attached toenable Petitioner to operate same. 20Writ Petition is disposed of. (MILIND N. JADHAV, J.)(UJJAL BHUYAN, J.) Borey 12/12 Uploaded on - 20/03/2020 Downloaded on - 21/03/2020 09:14:46 Mansukhlal Amritlal Modi v. Income-tax Officer, Ward-16(3)(1), Mumbai And Or