BADDI UNIVERSITY OF EMERGING SCIENCES TECHNOLOGY vs. COMMISSIONER OF INCOME TAX (EXEMPTIONS) CHANDIGARH AND OTHERS

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CWP/3121/2026HC Punjab & HaryanaPHHC01018626202612 February 2026Author: MR. JUSTICE DEEPAK SIBAL,MS. JUSTICE LAPITA BANERJI7 pages
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What did the High Court hold?

The High Court held that while the revenue authorities have the power to attach bank accounts, the prolonged pendency of the petitioner's appeals before the Commissioner (Appeals) cannot be ignored. The Court acknowledged that the petitioner-trust is an educational institution serving a beneficial cause and that its day-to-day expenses are essential for its functioning and the education of its students. The Court noted that the petitioner's ability to access its bank accounts is crucial for its survival and for continuing to serve students, and that its inability to do so would cause severe detriment. Therefore, to balance the equities, the Court directed the Commissioner (Appeals) to decide all three pending appeals of the petitioner within one month. In the interim, upon furnishing a bank guarantee of Rs. 1 crore in favor of the competent authority, the petitioner would be allowed to withdraw up to Rs. 1 crore from its accounts solely for meeting its daily expenses.

What were the facts?

The petitioner, a trust imparting education, is challenging a letter dated January 14, 2026, issued by the Deputy Commissioner of Income Tax to Punjab National Bank for attachment of the trust's bank accounts. This action was taken to recover outstanding demands for assessment years 2020-21 and 2022-23. The petitioner argues that its appeals against these demands, filed in October 2022 and April 2024, along with stay applications, have been pending for over three years. The trust claims that the attachment prevents it from meeting its substantial monthly operational expenses, jeopardizing its functioning and the education of its students. The revenue contends that the attachment was justified due to the petitioner's failure to file replies to recovery notices and reminders.

What were the issues?

1. Whether the attachment of the petitioner's bank accounts by the revenue authorities, despite pending appeals and stay applications before the Commissioner (Appeals), is illegal and arbitrary, contravening the provisions of the Income Tax Act, 1961? (Mixed question of law and fact, concerning Sections 220(6) and other relevant provisions of the Income Tax Act, 1961). Assessee's Contentions: The petitioner argues that the attachment is illegal and arbitrary, causing severe detriment to its functioning as an educational institution. They highlight that their appeals and stay applications have been pending for an extended period, and the revenue's action is premature and punitive. They rely on the principle that recovery proceedings should be stayed during the pendency of appeals, especially for a charitable institution. Revenue's Contentions: The revenue contends that the attachment was in accordance with law as the petitioner failed to file replies to several recovery notices and reminders. They argue that the petitioner's intention was not bona fide and that the attachment was a necessary step to recover outstanding demands.

Which sections of the Income-tax Act were involved?

Section 220(6),Section 270A,Section 144B,Section 143(3),Section 142(1),Section 12A(1)(ac)(i),Section 13(3),Section 12AA,Section 80G(5)

AI-generated summary — verify with the full judgment below

CWP NO.312

IN THE

Baddi Univer

V Commissione and others

1.

The date

2.

The date

3.

The date

4.

Whether pronoun pronoun

5.

The del judgmen

CORAM : H

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Present : M

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LAPITA BAN

Pr the Constitutio certiorari for q issued by re (Exemptions), through its Ch the petitioner, 21 OF 2026 (O&M) E HIGH COURT OF PUNJAB

CHANDIGARH

CWP NO rsity of Emerging Sciences & T

Versus r of Income Tax (Exemptions)

e when the judgment is reserved e when the judgment is pronounc e when the judgment is uploaded r only operative part of the j nced or whether the full ju nced ay, if any of the pronouncem nt, and reasons thereof HON’BLE MR. JUSTICE DEE HON’BLE MS. JUSTICE LAPI Mr. Sandeep Goyal, Senior Advoc Mr. Rishab Singla, Advocate, or the petitioner. Ms. Pridhi Jaswinder Sandhu, Sen or respondent-revenue departme NERJI, J. rayer in the present petition file on of India, inter-alia, is for issu quashing of a letter dated Janua espondent No.2-Deputy Com Chandigarh to respondent N hief Branch Manager for attachm being illegal and in contraventio B AND HARYANA AT O.3121 OF 2026 (O&M) Technology

...Petitioner Chandigarh

...Respondents 04.02.2026 ced 12.02.2026 d 13.02.2026 judgment is udgment is Full ment of full Not applicable EPAK SIBAL ITA BANERJI cate with nior Standing Counsel ent. ed under Articles 226/227 of uance of a writ in the nature of ary 14, 2026 (Annexure P-16) mmissioner of Income Tax No.4-Punjab National Bank ment of the bank accounts of on of provisions of the Income SHALINI BHATIA 2026.02.13 15:35 integrity of this document

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Tax Act, 1961 filed by the p have been pen for stay of o pendency of th been made fo petitioner on 2022, April 29

2.

T i)

T education to th of the 1961 12A(1)(ac)(i) under Section ii)

Fo Income Tax R under Section notices under petitioner, call iii)

T September 23 Section 144B o made by di salary/allowan Act. 21 OF 2026 (O&M) 1 (hereinafter referred to as “the petitioner before respondent N nding for more than three years. T operation of the letter dated Ja he statutory appeal/the writ petiti or expeditious disposal of the January 19, 2026 and the mai 9, 2024 and January 19, 2026. he facts of the case in brief are a he petitioner, an income tax a he students. The petitioner is re Act. It has further obtained of the Act and has obtained ex 80G(5). or the assessment year 2020 Return (ITR) by declaring ‘NIL’ 12A of the Act. The said ITR Section 143(2) and 142(1) of the ling for information. he said proceedings culminated 3, 2022 (Annexure P-3) under of the 1961 Act, whereby an add isallowing the expenses on nces and certain other expenses 1961 Act”) since the appeals No.6-Commissioner (Appeals) The petitioner has also prayed anuary 14, 2026 during the ion. Further, a prayer has also stay application filed by the n appeals dated October 20, as follows: ssessee, is a Trust imparting egistered under Section 12AA d registration under Section xemptions from time to time -21, the petitioner filed its ’ income claiming exemption was selected for scrutiny and e 1961 Act were issued to the d into passing of order dated r Section 143 (3) read with dition of Rs.1,34,71,225/- was account of Amortization, s under Section13 (3) of the SHALINI BHATIA 2026.02.13 15:35 integrity of this document

CWP NO.312

iv)

Pu (Annexure P- Rs.61,32,372/- v)

Fe petitioner filed No.6 on Octo appeal and app vi)

Fo November 07, subject to scru (Annexure P-7 Act was passe disallowing va vii) Pu (Annexure P-8 viii) Fe notice dated M Commissioner application wa pending adjudi ix) Un 2024 imposing year 2022-23. Commissioner

21 OF 2026 (O&M) ursuant thereto, a demand notic -4) was issued to the petiti -. eeling aggrieved by the afo d an appeal before the Commis ober 20, 2022 along with an ap plication for stay are pending adj or the assessment year 2022-23, , 2022 declaring its income to utiny proceedings. An assessmen 7) under Section 143 (3) read w ed whereby an addition of Rs.24 arious deductions as claimed by t ursuant thereto, a demand no 8) was issued raising a demand o eeling aggrieved and dissatisfie March 30, 2024, the petitioner p r of Income Tax (Appeals) o as filed at the time of filing of t ication before respondent No.6. nder Section 270A of the 1961 A g penalty of Rs.5,17,89,691/- wa An appeal challenging the pena r (Appeals) on January 19, 2026. ce dated September 23, 2022 ioner raising a demand of oresaid demand notice, the ssioner (Appeals)- respondent pplication for stay. Both the judication as on date. the petitioner filed its ITR on be ‘NIL’. The said ITR was nt order dated March 30, 2024 with Section 144B of the 1961 ,29,49,067/- was proposed by the petitioner. otice dated March 30, 2024 of Rs.12,84,38,418/-. d with the impugned demand preferred an appeal before the on April 29, 2024. No stay the appeal. The said appeal is Act, an order dated August 29, as imposed for the assessment alty order was filed before the . SHALINI BHATIA 2026.02.13 15:35 integrity of this document

CWP NO.312

x)

T the assessment 15, 2023 and in appeal fo acknowledgme (xi) D received sever 12), February and August Admittedly, r aforesaid notic xii) Vi issued by respo respondent No petitioner main demand of Rs and 2022-23. xiii) A to the respond under Section outstanding de release of bank SUBMISSION

3.

M petitioner subm 21 OF 2026 (O&M) he petitioner had filed its writt t year 2020-21 vide acknowledg January 09, 2025 (Annexure P- for the assessment year 20 ent receipt dated January 21, 202 During the pendency of the afor ral recovery notices dated Nove 25, 2025 (Annexure P-13), Jul 19, 2025 (Annexure P-15) i replies were not filed on beh ces. ide impugned letter dated Janua ondent No.3-National Faceless A o.4-Punjab National Bank (PNB ntained with respondent No.4-ba s.18,63,57,371/- pertaining to t After the letter of attachment dat ent No.4-Bank immediately the n 220(6) of the 1961 Act on J emands for the assessment years k accounts. NS Mr. Goyal, learned senior advoca mits that despite the appeals b ten submissions in appeal for gment receipts dated February -10). The written submissions 022-23 was filed through 25 (Annexure P-11). resaid appeals, the petitioner ember 12, 2024 (Annexure P- ly 02, 2025 (Annexure P-14) issued by respondent No.2. half of the petitioner to the ary 14, 2026 (Annexure P-16) Assessment Centre (NFAC) to B), the bank accounts of the ank were attached to recover a the assessment years 2020-21 ed January 14, 2026 was sent petitioner filed an application January 19, 2026 for stay of 2020-21 and 2022-23 and for ate appearing on behalf of the eing pending since long, the SHALINI BHATIA 2026.02.13 15:35 integrity of this document

CWP NO.312

respondent No recovery notic 2025 and Aug not be respond oversee its tax sent to the e-m petitioner. Du accounts, the p institute. The f salary, statutor petitioner unle

4.

M decided petitio 2022. At least, decided exped been de-attach

5.

M on advance no done in accor despite severa application for 2024. It is onl the revenue au 19, 2026 and p 21 OF 2026 (O&M) o.6 failed to adjudicate the same ces dated November 12, 2024, gust 19, 2025 had been issued b ded to by the petitioner-trust as x related issues had left his job. A mail id of the accountant who did ue to illegal and arbitrary atta petitioner is unable to meet the fixed monthly expenditure of Rs ry liabilities and expenses of me ess it can operate its bank accoun Mr. Goyal further submits that oner’s appeal expeditiously, fir , application for stay of the recov ditiously and the bank accounts hed. Ms. Sandhu, learned Standing co otice to assist the Court and sub rdance with law as replies wer al recovery notices/reminders be r stay was filed along with the ly when the accounts of the pet uthorities, the petitioner filed ap prayed for expeditious disposal o e. Illegally and arbitrarily the February 25, 2025, July 02, by the authorities which could s the Accountant who used to All the recovery notices were d not transmit the same to the achment of petitioner’s bank daily expenses of running the s.1,38,46,316/- which includes ess etc., cannot be paid by the nts. the respondents should have rst of which is pending since very notices should have been of the petitioner should have ounsel for the revenue appears bmits that the attachment was re not filed by the petitioner eing sent to it. Moreover, no appeal preferred on April 29, itioner-trust were attached by pplication for stay on January of its appeals. The intention of SHALINI BHATIA 2026.02.13 15:35 integrity of this document

CWP NO.312

the petitioner w thereto. Theref

DISCUSSION

6.

T perused the ma

7.

It filed by the p second appeal April 29, 2024 Section 270A pending since been filed on there may be November 12, and penalty or the fact that th education to se expenses of th the benefit of accounts the in interest of the since filing of No.6-Commiss

8.

T respondent No 21 OF 2026 (O&M) was not bona fide in nature and fore, the present writ petition sho N AND FINDINGS his Court has heard learned aterial on record. t appears that first appeal for t petitioner has been pending sinc l for the assessment year 2022 4 and the third appeal challengin of the 1961 Act for the assess January 19, 2026, along with an January 19, 2026 for stay of re no procedural infirmity in passi , 2024, February 25, 2025, July rder dated August 29, 2024, still he petitioner-trust is an educatio everal students which is a benefi e institute are required to be met the students. Unless the petitio nstitution would stop running ca students. It is also true that a c f the first two appeals by the sioner (Appeals) and the same ar herefore, this Court directs th o.6 to decide all the three pend d rather indicated the contrary ould not be entertained. counsel for the parties and the assessment year 2020-21 ce October 20, 2022 and the 2-23 has been pending since ng imposition of penalty under sment year 2022-23 has been n application of stay which has ecovery notices. Even though ing of recovery notices dated y 02, 2025, August 19, 2025 the Court cannot lose sight of onal institute that is imparting icial cause for the society. The t for its day to day running for ner is able to access its bank ausing severe detriment to the considerable time has elapsed petitioner before respondent re still pending adjudication. he Commissioner (Appeals)- ding appeals of the petitioner SHALINI BHATIA 2026.02.13 15:35 integrity of this document

CWP NO.312

filed vide ack January 19, 20 of recovery no certified copy

9.

In this Court dire Rs.1 crore in f allowed to wi expenses.

10.

W disposed of.

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C accordingly.

(DEEPAK SIB

JUDGE

FEBRUARY Shalini

Whether speak Whether repor 21 OF 2026 (O&M) knowledgments dated October 2 026 or atleast the application da otices, within a period of one mon of this order. n the meantime, to balance the ects that upon furnishing of ban favour of the competent authori ithdraw a sum upto Rs.1 crore With the aforesaid directions, Connected application(s), if any, BAL)

(L E

12, 2026 king/reasoned:

Y rtable:

Y 20, 2022, April 29, 2024 and ated January 19, 2026 for stay nth from the date of receipt of equities between the parties, nk guarantee/s to the tune of ty, the petitioner-trust will be e only, for meeting its daily CWP No.3121 of 2026 is , shall also stand disposed of LAPITA BANERJI) JUDGE Yes/No Yes/No SHALINI BHATIA 2026.02.13 15:35 integrity of this document

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