VENGAKKUNNUMMAL HARIKUMAR, vs. THE ASSISTANT COMMISSIONER OF INCOME TAX,
What did the High Court hold?
The High Court observed that the petitioner had deposited 20% of the assessed tax demand, which, in terms of the Office Memorandum F.No.404/72/93-ITCC dated 31.7.2017, should result in an automatic stay of further recovery. Consequently, there was no reason to continue the attachment on the petitioner's property. Furthermore, the revenue's counsel conceded that the attachment orders were no longer valid as their 60-day period had expired. Therefore, the Court held that no order of attachment was surviving in respect of the petitioner's properties, including bank deposits, pursuant to the impugned orders. The writ petition was disposed of with these observations.
What were the facts?
The petitioner, Vengakkunnummal Harikumar, filed a writ petition challenging garnishee proceedings initiated against him under Section 226(3) of the Income Tax Act, 1961. These proceedings were undertaken because the petitioner had not paid the assessed tax amount immediately after the completion of assessment orders. The petitioner had filed appeals against these assessment orders and had also remitted 20% of the assessed tax demand. The appeals were pending. The petitioner contended that by depositing 20% of the disputed demand, he had complied with the guidelines in Office Memorandum F.No.404/72/93-ITCC dated 31.7.2017, which should result in an automatic stay of further recovery. The revenue's counsel submitted that the attachment orders were no longer valid as their 60-day period had expired.
What were the issues?
1. Whether the garnishee proceedings initiated against the petitioner under Section 226(3) of the Income Tax Act, 1961, are valid when the petitioner has filed appeals against the assessment orders and deposited 20% of the disputed demand, thereby invoking the provisions of Office Memorandum F.No.404/72/93-ITCC dated 31.7.2017? Assessee's Contention: The petitioner argued that by depositing 20% of the disputed demand, he had complied with the guidelines prescribed in the Office Memorandum dated 31.7.2017, which mandates an automatic stay of further recovery proceedings. Therefore, the garnishee proceedings should not have been initiated or should be quashed. Revenue's Contention: The revenue, through its Standing Counsel, submitted that the attachment orders were not surviving in any event, as they were valid only for sixty (60) days from their date of issue, and this period had expired.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
J U D G M E N T The present writ petition has been filed impugning the garnishee proceedings initiated against the petitioner vide Exts.P45 to P48 orders under Section 226(3) of the Income Tax Act, 1961. 2. Since the petitioner did not pay the assessed tax amount immediately after completion of the assessment orders, garnishee proceedings have been undertaken against him. The petitioner has filed appeals against the assessment orders and has also remitted 20% of the tax assessed. The appeals are still pending for consideration and since the petitioner has complied with the guidelines prescribed in Office Memorandum F.No.404/72/93- ITCC, dated 31.7.2017 by making deposit of 20% of the disputed demand, there is automatic stay of further demand in pursuance to the assessment orders.
In view thereof, there is no reason to keep attachment on the property because once the WP(C) NO. 37725 OF 2022 4 petitioner has deposited 20% of the demand, there will be automatic stay of recovery.
Sri.Navaneeth N.Nath, learned Standing Counsel appearing for the respondents, submits that the attachment orders are, even otherwise, not surviving, in view of the fact that the attachment orders are valid only for sixty (60) days from the date of the orders and the period of sixty (60) days was over much before.
In view thereof, nothing survives in the present writ petition. It is made clear that there is no order of attachment surviving in respect of the properties of the petitioner, including the bank deposits, if any, in pursuance to Exts.P45 to P48 orders. With the aforesaid observations, the present writ petition is disposed of. Pending interlocutory application, if any, in the present writ petition stands dismissed. DINESH KUMAR SINGH
JUDGE jg
WP(C) NO. 37725 OF 2022 5
Appendix — schedule of exhibits
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