AMIT BAJAJ ADVOCATE

 The Pune ITAT has imposed costs on the revenue for causing harrasment to the assessee in recovery proceedings in a case namely Shramjivi Nagari Sahakari Pat Sanstha V ACIT. The bank account of assessee was attached even before the communication of CIT(A)'s order to the assessee. This is an important order as it is generaly seen that the department ussualy adopt coercive measures for recovery proceedings, I hope the department take some lesson from this order.

Facts: The assessee, a credit co-operative society, contravened s. 269SS & 269T because of which penalty u/s 271E was levied. The CIT(A) confirmed the levy of penalty. Before service of the CIT(A)’s order, the assessee’s bank account was attached u/s 226(3). The assessee filed a stay application and claimed that as the assessee had to bear costs owing to the illegal action of the AO, costs had to be awarded to it. HELD upholding the assessee’s plea:

Verdict: The AO’s order of attaching the bank account of the assessee even before the service of the CIT(A)’s order was wrong in view of (a) the CBDT’s letter dated 25.3.2004 advising that penalties u/s 271-D & 271-E for violation of s. 269-SS & 269-T should not be indiscriminately imposed without considering s. 273-B, (b) the CCIT’s direction that demand arising out of penalties imposed u/s 271-D & 271-E should be stayed in cases of co-operative credit societies, (c) UOI v/s Raja Mohammed Amir Mohammed AIR 2005 SC 4383 where concern was expressed over dangerous attitude developing amongst Executive resulting in institutional damage & (d) KEC Interntional Ltd 251 ITR 158 (Bom) where it was held that generally coercive measures may not be adopted during the period provided by the Statute to go in appeal. Accordingly, the assessee was unnecessarily subjected to harassment by the actions of the lower authorities. It is thus a fit case for imposing costs u/s 254(2B) on the Revenue to compensate the harassment caused by the officers of the Revenue at fault.

Full Judgement can be downloaded herebelow:

Shramjivi Nagari Sahakari Pat Sanstha V ACIT.Share |