The Bombay High Court in the case of Vinod K. Bhagat vs. Tax Recovery Officer and Others, 2015 (3) TMI 105, held that the grievances of the petitioner expressed in a letter is nothing but an appeal under Rule 86 of Second Schedule to the Income Tax Act.
Facts of the case:
The instant case was an application under Article 226 of Constitution of India filed against the notices dated 25.1.2012 and 6.3.2012 sent to the assessee by the department attaching his property and bank accounts for realization of tax dues payable by the late father of the petitioner.
The petitioner also challenged the order dated 25.9.2012 passed by the Tax Recovery Officer holding that the property belonged to the petitioner which has been attached for the tax dues payable by his late father.
Mr. Vipul Joshi, the learned Counsel appearing for the petitioner, contended that after attachment of the property and the bank accounts of the petitioner, the petitioner moved an application through a letter dated 13.4.2012 to the Jurisdictional Commissioner of Income Tax expressing his grievances regarding attachment of his property and bank accounts for recovery of income tax dues payable by his father, since deceased.
The petitioner in the said letter did not refer to his applications as appeals but stated his grievances regarding the action of Tax Recovery Officer in attaching the petitioner’s property and his bank accounts.
Because of no response, the petitioner through another letter dated 7.5.2012 stated his grievances to the Chief Commissioner of Income Tax.
The Chief Commissioner of Income Tax through a letter dated 10.5.2012 communicated to the Jurisdictional Commissioner to dispose of the grievances of the petitioner expressed in the letter dated 13.4.2012 and 7.5.2012 sent by the petitioner which according to the Chief Commissioner was nothing but an appeal as was provided in Rule 86 of II Schedule of the Income Tax Act, 1961 against the Tax Recovery Officer’s action of recovery as per the second Schedule of the Act.
However in spite of the above directions of the Chief Commissioner of Income Tax, the Jurisdictional Commissioner of Income Tax did not consider the petitioner’s appeal filed in the form of grievances.
The petitioner by means of a number of communications dated 23.5.2012, 2.7.2012 and 29.1.2014 requested the Jurisdictional Commissioner of Income Tax to dispose of his appeal filed in the form of grievances under Rule 86 of the Schedule II of the Income Tax Act.
In the meantime during the pendency of the petitioner’s appeal under Rule 86 of the Second Schedule to the Act, the Tax Recovery Officer passed an order on 25.9.2012 where it was held that the attachment of the immovable properties of the petitioner was justified.
The judgment of the Bombay High Court:
The Bombay High Court held that the delay in the Jurisdictional Commissioner of Income Tax to deal with the petitioner’s grievances which according to the Chief Commissioner was an appeal as provided in Rule 86 of Second Schedule to the Income Tax Act and disposing it without getting into the merits has caused prejudice to the petitioner.
The prejudice has been caused to the petitioner as his grievance against the order of attachment passed by the Tax Recovery Officer has not being considered in appeal even though the Income Tax Act provides for the same. It was further held that the Tax Recovery Officer should have fairly awaited the disposal of the petitioner’s appeal according to the provisions of Rule 86 to the Second Schedule of the Act pending before the Jurisdictional Commissioner of Income Tax before disposing of the attachment proceedings as per Rule 11 of the Second Schedule of the Act.
In view of the above, the writ petition was decided in favour of the assessee. It was also directed to restore the appeal preferred by the petitioner before the Jurisdictional Commissioner for fresh disposal.