ARUN COLUMBUS vs. THE CENTRAL BOARD OF DIRECT TAXES,

WP(C)/42918/2023HC KeralaKLHC01095916202320 December 2023Author: HONOURABLE MR. JUSTICE D. K. SINGH4 pages

AI SummaryRemanded

What did the High Court hold?

The High Court found no grounds to entertain the writ petition in its present form, as the petitioners had not yet responded to the show cause notices issued to them. The Court directed the petitioners to file their reply to the show cause notices (Exhibits P-1 to P-6) within one week. After considering the petitioners' reply and supporting documents, the second respondent (Tax Recovery Officer) was to issue a fresh notice if any amount was still due. The Court also ordered that no coercive measures would be taken against the petitioners for realizing the amounts mentioned in the impugned notices until a decision is taken after the petitioners file their reply. The principle established is that statutory remedies, such as responding to show cause notices, must be exhausted before approaching the writ court, especially when the primary issue involves factual verification of tax liability.

What were the facts?

The petitioners, Arun Columbus and Anupama John, filed a writ petition challenging notices (Exhibits P-1 to P-6) issued under Rule 85 of the Second Schedule to the Income Tax Act, 1961. These notices were for the recovery of alleged income tax arrears of late Sri. K. J. Columbus, Sri. K. J. Anto Nito, and a defunct concern, M/s. Ocean Fisheries. The petitioners claimed to have acquired the properties of these deceased individuals and the defunct concern through gift deeds and survival suits. They asserted that they had previously challenged the recovery of amounts from these entities, and after paying the due tax on the properties, the properties were released in their favour. They contended that there was no basis for the impugned notices as their tax liability concerning the properties had already been discharged.

What were the issues?

1. Whether the impugned notices issued under Rule 85 of the Second Schedule to the Income Tax Act, 1961, for recovery of alleged income tax arrears of deceased individuals and a defunct concern are valid, given the petitioners' claim of having discharged their tax liability on the properties acquired by them? Assessee's Contention: The petitioners argued that they had acquired the properties through gift deeds and survival suits and had already discharged their income tax liability on these properties. They contended that the impugned notices were therefore unjustified. They relied on the fact that their previous challenge to realization of amounts from the deceased persons and concern was repelled by the High Court, and after paying the tax due on the properties, the properties were released. Revenue's Contention: The judgment does not record any specific contentions from the revenue. It notes that the petitioners were issued show cause notices and were granted fifteen days to file a reply, but instead approached the Court.

Which sections of the Income-tax Act were involved?

Rule 85

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE DINESH KUMAR SINGH WEDNESDAY, THE 20TH DAY OF DECEMBER 2023 / 29TH AGRAHAYANA, 1945 WP(C) NO. 42918 OF 2023 PETITIONERS: 1 ARUN COLUMBUS, AGED 46 YEARS, S/O. ANTO NITTO, KALAPPURAKKAL HOUSE, EDACOCHIN, COCHIN, PIN – 682006. 2 ANUPAMA JOHN, AGED 51 YEARS, D/O. ANTO NITTO, KALAPPURAKKAL HOUSE, EDACOCHIN, COCHIN, PIN – 682006. BY ADVS. SRI. C. JOSEPH ANTONY SRI. JOSEPH JOSE SRI. RAJU JOSEPH (SR.) RESPONDENTS: 1 THE CENTRAL BOARD OF DIRECT TAXES, MINISTRY OF FINANCE (DEPARTMENT OF REVENUE), NORTH BLOCK, NEW DELHI, REPRESENTED BY ITS CHAIRMAN, PIN – 110002. 2 THE TAX RECOVERY OFFICER, RANGE 1, C. R. BUILDING, I. S. PRESS ROAD, COCHIN, ERNAKULAM, KERALA, PIN – 682018. BY ADV. JOSE JOSEPH – SC – INCOME TAX THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 20.12.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 42918 OF 2023 2 DINESH KUMAR SINGH, J. -------------------------- W.P.(C) No.42918 of 2023 ------------------------- Dated this the 20th day of December, 2023

JUDGMENT

The present writ petition has been filed impugning Exhibits P-1 to P-6 notices issued in Form No. ITCP 29 under Rule 85 of the Second Schedule to the Income Tax Act, 1961 for alleged recovery of arrears of income tax of late Sri. K. J. Columbus, Sri. K. J. Anto Nito and defunct concern, M/s. Ocean Fisheries.

The learned Counsel for the petitioner submits that the petitioner has come into the possession of the properties of the deceased persons and defunct concern by gift deeds and survival suits. Petitioner’s earlier challenge for realisation of the amount of the above persons and concern who are no more was repelled by this Court in its Judgment and Order dated 07.06.2023 in W.P.(C) No. 16414 of 2011 and the petitioner had paid all the due tax and after paying the tax due on the properties, the properties have been released in his favour. It is the submission of the learned Counsel for the petitioner that there is no occasion for issuing the impugned notices in Exhibits P-1 to P-6 inasmuch as the petitioner has already

WP(C) NO. 42918 OF 2023 3 discharged his liability of income tax over the properties.

The petitioner has been issued only Show Cause Notices and the petitioner has granted fifteen days time to file reply to the Show Cause Notices. The petitioner instead of filing reply to the Show Cause Notices in Exhibits P-1 to P-6 approached this Court. This Court finds no ground to entertain this writ petition as the petitioner has to first reply to the Show Cause Notices. Considering this fact, the petitioner is permitted to file his reply to the Show Cause Notices in Exhibits P-1 to P-6 within a period of one week and after considering the reply of the petitioner and documents produced in support of the reply, the 2nd respondent shall issue fresh notice if some amount is due to be paid by the petitioner. Till a decision is taken after filing reply by the petitioner within a period of one week, no coercive measures shall be taken against the petitioner for realising the amount mentioned in the impugned notices in Exhibits P-1 to P-6. With the above directions, this writ petition is finally disposed of. DINESH KUMAR SINGH JUDGE Svn

WP(C) NO. 42918 OF 2023 4

Appendix — schedule of exhibits

APPENDIX OF WP(C) 42918/2023 PETITIONER’S EXHIBITS EXHIBIT P1 TRUE COPY OF THE DEMAND NOTICE ISSUED TO THE 1ST PETITIONER IN REGARD TO ARREARS OF TAX DUE FROM LATE K.J.COLUMBUS DATED 06.12.2023 EXHIBIT P2 TRUE COPY OF THE DEMAND NOTICE ISSUED TO THE 1ST PETITIONER IN REGARD TO TAX ARREARS IN REGARD TO M/S OCEAN FISHERIES DATED 06.12.2023 EXHIBIT P3 TRUE COPY OF THE DEMAND NOTICE ISSUED TO THE 1ST PETITIONER IN REGARD TO THE TAX ARREARS DUE FROM LATE K.J.ANTO NITTO DATED 06.12.2023 EXHIBIT P4 TRUE COPY OF THE NOTICE OF DEMAND ISSUED TO 2ND PETITIONER IN REGARD TO TAX ARREARS DUE FROM LATE K.J.COLUMBUS DATED 06.12.2023 EXHIBIT P5 TRUE COPY OF THE NOTICE ISSUED TO THE 2ND PETITIONER IN REGARD TO TAX ARREARS DUE FROM M/S.OCEAN FISHERIES DATED 06.12.2023 EXHIBIT P6 TRUE COPY OF THE NOTICE ISSUED TO THE 2ND PETITIONER IN REGARD TO THE TAX ARREARS DUE FROM LATE K.J.ANTO NITTO DATED 06.12.2023 EXHIBIT P7 TRUE COPY OF THE JUDGMENT IN WPC NO. 17897/2009 DATED 22.10.2010 EXHIBIT P8 TRUE COPY OF THE STATEMENT ISSUED BY RESPONDENTS DATED 01.11.2010 EXHIBIT P9 TRUE COPY OF THE LETTER ISSUED BY THE PETITIONERS TO THE RESPONDENTS DATED 09.11.2010 ALONG WITH TYPED COPY EXHIBIT P10 TRUE COPY OF THE ORDER PASSED BY THE 1ST RESPONDENT DATED 02.02.2011 EXHIBIT P11 TRUE COPY OF THE JUDGMENT IN WPC NO.16414/2011 DATED 07.06.2023

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