Mohsin Siddiqui (Chief Reporter)

taxpayer has been reimbursed for funds recovered from their bank account due to a procedural oversight by tax authorities. The taxpayer viewed this recovery as coercive, arguing that it occurred without prior notice, as mandated by law.

Despite affording the taxpayer an opportunity for a hearing before reassessing the e-return, the tax authorities swiftly initiated recovery proceedings by attaching bank accounts without issuing a formal notice. The taxpayer emphasized the importance of revenue functionaries exercising their authority without infringing upon taxpayers’ rights to due process, fair trial, and access to justice.

The taxpayer stressed that tax authorities are obligated to protect citizens under the law, rather than being used to deprive taxpayers of such protection. Regardless of the authority upholding an assessment order, whether it be the commissioner (appeals), income tax appellate tribunal, or high court, tax authorities must issue notices before resorting to coercive measures.

The competent authority upheld the taxpayer’s position, emphasizing that the law requires tax dues to be paid within a reasonable timeframe specified by the commissioner. It was deemed unreasonable for this timeframe to be less than seven days, as it aims to notify taxpayers to fulfill their obligations promptly and exercise their statutory right of appeal.

Consequently, the competent forum invalidated the recovery proceedings due to their lack of lawful authority and directed the authorities to reimburse the recovered amount or credit it back to the taxpayer’s bank accounts.