MAULIKKUMAR VINODKUMAR PATEL vs. TAX RECOVERY OFFICER-4

Facts

The assessee, Maulikkumar Vinodkumar Patel, filed a writ application challenging a summons dated July 4, 2019, issued by the Tax Recovery Officer-4 (TRO-4) under Rule 83 of the Second Schedule to the Income Tax Act, 1961. The summons required the assessee's personal attendance on July 16, 2019, to give evidence and produce documents, and stated he should not depart without permission. This followed an assessment order under Section 144 for Assessment Year 2014-15, resulting in a demand of Rs. 1,64,67,650, and a pending appeal before the Commissioner of Income Tax (Appeals). The assessee's lawyer had previously filed a letter seeking time. The TRO-4 issued the summons in connection with recovery proceedings.

Held

The High Court held that the writ applicant had not made out a case for declaring the summons illegal or erroneous. It was permissible for the authority concerned to secure and enforce the personal attendance of the assessee/defaulter for necessary inquiry pursuant to a summons under Rule 83 of the Second Schedule. For effective and expeditious disposal of recovery proceedings, it is always permissible for the Tax Recovery Officer to call for necessary and relevant information and conduct an inquiry by securing and enforcing the personal attendance of the assessee/defaulter. The Court clarified that the assessee could be accompanied by his legal representative or chartered accountant, and the TRO should permit this. The Court also emphasized that there should be no unnecessary harassment, wait, or detention for the assessee, while the assessee remains duty-bound to cooperate and furnish necessary details. The summons was upheld.

Key Issues

1. Whether the impugned summons issued under Rule 83 of the Second Schedule to the Income Tax Act, 1961, is within the power and authority of the Tax Recovery Officer? (Question of law) 2. Whether the impugned summons is proper and just in seeking personal attendance when a Vakalatnama of a lawyer has been filed and the petitioner is inclined to cooperate to produce all documents, if reasonable time is given? (Question of mixed law and fact) 3. Whether the impugned summons can stipulate that the petitioner will not depart until directed by the Tax Recovery Officer when he attends the office on direction of personal presence? (Question of law) Assessee's contentions: The TRO is not empowered to insist on personal attendance or to direct the assessee not to depart without permission under Rule 83, which only pertains to taking evidence. The summons is improper as a Vakalatnama was filed, and the assessee was willing to cooperate with reasonable time. Revenue's contentions: The revenue relied on a Division Bench decision of the Orissa High Court in K.V. Mohamad vs. Sales Tax Officer Cuttack II East Circle Cuttack, which held that sales tax authorities, clothed with the powers of a civil court, can compel attendance under Section 32 of the Code of Civil Procedure, 1908. The revenue argued that the TRO has the power to secure and enforce personal attendance for effective recovery proceedings.