TITLE: S. 220: After rejecting stay
application AO must give reasonable time before taking steps for coercive
recovery
CASE: Sony India Pvt. Ltd vs.
ACIT (Delhi High Court)
Having
said that this is a case in which technically no fault could be found with the
assessing officer, we feel that there was there was an element of impropriety
in his action in issuing the garnishee order under section 226(3) on 17.2.2014,
the very day on which he rejected the stay application filed by the petitioner
under section 220(3).
It is
expected of him, having rejected the stay application, to wait for a reasonable
period before he takes coercive steps to recover the amounts since the
petitioner, faced with an order rejecting the stay application, may need some
time to make arrangements to pay the entire tax demand or come up with
proposals for paying the same in instalments. That opportunity was not afforded
by the assessing officer in the present cases. The assessing officer is a
prospector of the revenue and he is no doubt expected to protect the interests
of the revenue zealously, but such zeal has to be tempered with the rules of
fair play and an anxiety to ensure that a opportunity is not lost to the
assessee to make alternative arrangements for clearing the tax dues, once the
stay applications filed under section 220(3) are rejected.
Taking
away the amount of Rs.43.87 crores from the bank account of the petitioner may
perhaps not be legally faulted, but taking into account the haste with which
the assessing officer acted in the present case it seems to us that there was
an element of arbitrariness in the action of the assessing officer. In our
opinion, since the stay applications filed by the petitioners are pending
before the Tribunal, the more appropriate course would be to issue the following
directions.