Karnataka High Court: S. Sujatha, J. while disposing of a petition, directed that no precipitation action shall be taken against the petitioner until a decision is by the Tax Recovery Officer.
In the instant case, a show cause notice was issued to the petitioners under Rule 73 of the Schedule II – Arrest and Detention of the Defaulter under the Income Tax Act, 1961 relating to the Assessment years 2007-08, 2009-10, and 2010-11 by the Assistant Commissioner of Income Tax (OSD), Bangalore. It was also to defreeze the savings bank account of the petitioner by his name in HDFC Bank Ltd.
The petitioner is an assessee under the Income Tax Act, 1961 who has a business in the name and style of S.M.S.K. Mineral Trading Company.
Counsel for the petitioner, Murthy Dayanand Naik submitted that even though relief was given by the Income Tax Appellate Tribunal, Panaji Bench relating to the assessment years in question the revenue/tax recovery officer/assistant commissioner issued a show-cause notice for alleged default in payment of tax. He further submitted that in accordance with Rule 75 of Schedule II, custody pending hearing can be invoked by the Tax Recovery Officer. In these circumstances, the petitioner needs to be protected.
Counsel for the Respondent, E.I. Sanmathi submitted that the petitioner knocked on the door of this court on an apprehension of being sent to the civil prison for the default. It is a commonplace procedure that unless the reply made by the petitioner to the show cause notice is considered, the detention of the petitioner to the civil prison may not arise. Moreover, there is always a remedy of appeal available against the order of the detention. An anticipatory bail moved by the petitioner had also been rejected.
The Court observed that the show cause notice was issued to make the petitioner appear before the Tax Recovery Officer. The apprehension of the petitioner was considered futile. The Tax Officer was directed to consider the reply submitted by the petitioner after affording a reasonable opportunity of hearing. [M.A. Zahid v. Assistant Commissioner of Income Tax (OSD), Tax Recover Office, Bangalore, W.P. Nos. 14833 & 15147-15148 of 2018 (T-IT), decided on 10-10-2019]