Coercive Recovery - A.O has misused his powers - ITAT
IN a remarkable order last week, the ITAT came down heavily on the AO for attachment of bank account of an assesse and ordered refund of the entire amount.
The assessee, Maharashtra Housing & Area Development Authority, is an authority setup under Maharashtra Housing and Area Development Act with a view to solve the acute shortage of housing problem in the State. The Income Tax demand is about Rs. 160 Crores.
The assessee received the order of the CIT(A) on 16.11.2013. The assessee has filed the appeal against the impugned order without any wastage of time on the very next working day but the A.O without waiting for the hearing and outcome of the Stay Application has taken the coercive action of recovery of the entire outstanding amount from the bank of the assessee as per Section 226(3) of the Income Tax Act.
The ITAT observed,
A.O has taken a coercive action by ignoring the basic rule of law and the directions and guidelines issued by the Hon'ble Jurisdiction High Court in case of UTI Mutual Fund Vs ITO.
We hold that the A.O has misused his powers and the action of recovery from the bank amount of the assessee is a gross violation of the directions as well as the basic rule of law and principle of natural justice. Accordingly, we direct the Revenue to refund the entire amount of Rs.159,84,03,720/- to the assessee within 10 days .