Stayed Tax - Collected by Consent (of the victim) - Deplored - ITAT
STRANGE are the ways of Revenue and stranger are the ways they employ to collect taxes, which they are NOT supposed to collect. In this mission, they are ready to flout all rules and orders and resort to even illegal means.
An interesting case was decided in the Mumbai ITAT recently.
The Tribunal had granted Stay of collection of outstanding demand against an assessee. In spite of the Stay granted by the ITAT, the AO adopted an innovative method to collect tax. He obtained a consent letter from the assessee and realised Rs. 16.64 crores of the outstanding demand.
The hapless assessee is before the Tribunal.
The Tribunal called the AO who had collected the revenue by flouting the directions of the Bench. The Officer appeared before the Bench and tendered an unconditional apology for his conduct and submitted that it was collected with the consent given by the appellant vide letter dated 23.04.2014.
The Tribunal clarified that neither the assessee nor the Revenue has the right to flout the decision of the Tribunal and being an officer functioning under the Government of India it is his obligation to follow the directions of the superior authority and even if there is consent he should not have collected the amount.
The Tribunal noticed that in some other cases also similar consent letters were obtained or the Department has collected tax despite the stay order passed by the ITAT.
The Tribunal observed, "We deplore this practice and direct the Chief Commissioner of Income Tax to issue a letter to all the concerned Assessing Officers not to adopt this kind of approach of obtaining consent letters and to respect the order passed by the Tribunal as otherwise the Tribunal would be constrained to view the conduct of the Department adversely."
The Tribunal directed the AO to refund the amount collected contrary to the order passed by the ITAT. The amount along with interest is be refunded within 15 days and the AO is directed to furnish the proof of refunding the amount before the Bench.