While strongly directing the Revenue Department to lift the attachment order, the Madras High Court clarified that once an order has attained its finality on the factual aspect at the level of ITAT, being the last fact-finding quasi-judicial authority, and the amount has been paid as per the order passed by the ITAT, no further recovery can be initiated.
The Court reiterated that if the order attained finality at the level of the highest fact-finding authority, then the tax recovery officer is bound to give effect to the said order. Further, if the Department had preferred any appeal, they are always at liberty to proceed for recovery if they succeed in the appeal before the Court.
A Single Judge Bench of Justice Krishnan Ramasamy referred to the provisions of Section 225(2) of the Income Tax Act, which gives a mandate to the Tax Recovery Officer to pass appropriate orders based on the orders passed in appeal or other proceedings.
Since, in the present case, as per the order passed by ITAT and CIT(A), the entire arrears have already been paid by the petitioner, the Bench directed the Tax Recovery Officer to release the property, which was attached vide the attachment order, within a period of four weeks.
Briefly, in this case, the respondent Department had initiated proceedings against the petitioner pursuant to a search and issued notice under Section 153A, which later on culminated in an assessment order making new additions. Subsequently, the attachment order came to be passed.
On appeal, the new additions were set aside by the CIT(A), which was confirmed by the ITAT. Despite this, the respondents had failed to lift the attachment order yet. Accordingly, the appellant approached the High Court seeking the lifting of the attachment order, contending that as far as the arrears amount is concerned, the same has been entirely remitted by the petitioner and thus, as of date, the petitioner is not liable to pay any amount to the respondent.
Appearances:
Advocates Nithyaesh Natraj and Vaibhav R Venkatesh, for the Petitioner/ Taxpayer
Senior Advocate A.P. Srinivas and Advocate A.N.R. Jayaprathap, for the Respondent/ Revenue
