Calcutta HC stays Income Tax Recovery through Bank Account Attachment amid COVID-19 Pandemic [Read Order]

The Calcutta High Court has stayed Bank account attachment subject to Rs. 5 Lakh setting apart for Taxes amid Coronavirus.

The petitioners are retired, they are facing undue hardship by reason of the notice of recovery issued by the revenue authorities. Usually, appeals against the order of assessment are admitted on the basis of 20% of the amount of revenue demanded. In the case of the writ petition, the revenue authorities have received a sum in excess of Rs. 2 lakhs already from the bank account of the petitioner while the amount of demand is Rs.10 lakhs. In respect of the petition, the revenue authorities are yet to receive any amount from the two bank accounts of the petitioners. The amount of demand of the revenue authorities therein is a sum in excess of Rs.12 lakhs.

The court in relying on the order dated March 20, 2020, passed by the Supreme Court directing the revenue authorities not to initiate any recovery proceedings during the subsistence of the COVID-19 pandemic.

“The interest of justice would be subserved by directing the banks of the petitioners to allow the petitioners to operate the bank accounts subject to the bankers’ of the petitioner in the petition of 2020 setting apart a sum of Rs.5 lakhs. Such a sum of Rs.5 lakhs, the Court is informed, is lying in one of the bank accounts of such petitioner. Such a banker will keep a sum of Rs.5 lakhs in a separate interest-bearing fixed deposit account with it. Such a deposit will abide by the result of the appeal of such a petitioner. The bankers of the petitioner of such a petition thereafter will permit the petitioner to operate his bank accounts in accordance with the law. There will be the stay of the order of attachment of the bank accounts subject to compliance of the aforementioned conditions,” the court observed.

The single-judge bench of Justice Debangsu Basak held that a sum of Rs.2 lakhs has already been paid by the banker of such petitioner to the revenue authorities, it would be appropriate to permit such petitioner to operate his bank account. The order of attachment issued by the revenue authorities against such a bank account of the petitioner stays.

“It was clarified that these measures are put in place in view of the prevailing COVID-19 pandemic in the country. None of the observations made herein will prejudice any of the parties in the appeal. The appellate authority is at liberty to decide the appeal in accordance with law as expeditiously as possible,” the bench said.