SURESHCHANDRA N. SHAH vs. COMMISSIONER OF INCOME TAX-16

WP/416/2012HC Bombay20 July 2012Bench: HON'BLE SHRI JUSTICE S.J. VAZIFDAR, HON'BLE SHRI JUSTICE M.S. SANKLECHA4 pages

AI SummaryDismissed

What did the High Court hold?

The High Court declined to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India. The Court noted that the matter was not straightforward and required examination of evidence, potentially including oral evidence, especially as the petitioner had not yet provided payment details for the flat's purchase. The Court agreed with the revenue that the petitioner had an alternate remedy of filing an appeal before the Commissioner/Chief Commissioner of Income-tax. Consequently, the Writ Petition was dismissed. The attachment of the flat was to continue. However, the petitioner was granted four weeks to file an appeal and an application for interim relief, during which time no further action for the sale of the flat would be taken until the interim application was disposed of, and for an additional four weeks thereafter if the order was against the petitioner. All contentions of the parties were kept open.

What were the facts?

The petitioner, Sureshchandra N. Shah, challenged orders dated August 25, 2009, and December 29, 2011, issued by the respondents, including the Tax Recovery Officer. These orders pertained to the recovery of tax dues of approximately Rs. 7,19,25,317/- owed by the petitioner's wife, Smt. Dharmistha S. Shah, as a partner of M/s. Pankaj Investments. The respondents attached a residential flat, which they claimed the petitioner's wife co-owned, to recover these arrears. The petitioner objected to the attachment, asserting his wife had no legal right in the flat despite being listed as a co-owner. The Tax Recovery Officer rejected the petitioner's application to vacate the attachment, confirming his wife's liability and co-ownership of the flat.

What were the issues?

1. Whether the Tax Recovery Officer was justified in rejecting the petitioner's application to vacate the attachment of the residential flat, considering the petitioner's contention that his wife, Smt. Dharmistha S. Shah, had no legal right in the flat despite being recorded as a co-owner. Assessee's arguments: The petitioner argued that his wife had no legal right in the flat, even though she was documented as a co-owner. He contended that the attachment was therefore unwarranted. Revenue's arguments: The respondents argued that the petitioner's wife was a co-owner of the flat and that the petitioner had not provided concrete evidence to prove he was the sole owner. They asserted the attachment was valid until the tax arrears were paid.

Which sections of the Income-tax Act were involved?

Article 226

AI-generated summary — verify with the full judgment below

WP416.12

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION WRIT PETITION NO. 416 OF 2012 Sureshchandra N. Shah, 1005/B, ] Chandanbala, R.R. Thakkar Marg, ] Off Ridge Road, Walkeshwar, ] Mumbai – 400 006. ] ... Petitioner Vs 1. Commissioner of Income tax – 16, ] 278, Matru Mandir, Tardeo Road, ] Mumbai – 400 007 ] 2. Asst. Commissioner of Income-tax, ] Circle 16(3), Matru Mandir, Tardeo Road,] Mumbai – 400 007. ] 3. Joint Commissioner of Income-Tax, ] Range 16(3), Matru Mandir, ] Tardeo Road, Mumbai – 400 007. ] 4. Tax Recovery Officer, ] Range 16(34), Room No.215, 2nd floor, ] Matru Mandir, Tardeo Road, ] Mumbai – 400 007. ]... Respondents Mr. S.C. Tiwari with Ms. Natasha Mangat i/b Mr. S.C. Tiwari and R. Ashokan and Ms. Natasha Mangat for the Petitioner. Mr. A.R. Malhotra for the Respondents. SRP 1/4 CNR No : HCBM020022322012 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:54:49

WP416.12 CORAM : S.J. VAZIFDAR, & M.S. SANKLECHA, JJ. FRIDAY, 20TH JULY, 2012 ORAL JUDGMENT.: [Per S.J. Vazifdar, J.] 1. The petitioner has challenged orders dated 25th August, 2009 and 29th December, 2011. 2. The matter pertains to the recovery of the tax dues of the petitioner's wife Smt. Dharmistha S. Shah as a partner of M/s. Pankaj Investments. The respondents contend that the outstanding arrears are of about Rs.7,19,25,317/-. The respondents have proceeded against the properties of the partners of the firm, including a residential flat in which, they contend, that the assessee viz. the petitioner's wife is a co- owner. The said flat has been attached. 3. Initially, by a letter dated 15th June, 2010, the petitioner's wife requested the respondents to lift the attachment and stated that she was ready to make payment of her share of the tax liability. This request was reiterated in subsequent letters. SRP 2/4 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:54:49

WP416.12 4. Five months' later, the petitioner objected to the attachment, contending that his wife had no legal right in the flat although she is shown in the documents as the co-owner thereof. 5. By the impugned orders, the petitioner's application to vacate the attachment of the flat was rejected. The Tax Recovery Officer confirmed the liability of the petitioner's wife in respect of the said tax dues and held that she was a co-owner of the said flat and that there was no concrete evidence brought on record by the petitioner to prove that he was the sole owner thereof. He, accordingly, held that the attachment of the flat would remain in force till the date of payment of the arrears. 6. We do not wish to make any observations on the merits of the contentions, least the same prejudice the interests of any of the parties. Suffice it to state that this is not an open and shut case. It would be necessary to examine the evidence. It may even be necessary for the parties to adduce oral evidence, especially in view of the petitioner not SRP 3/4 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:54:49

WP416.12 having been able thus far to bring on record the payment details for the purchase of the flat. 7. In that view of the matter, we are not inclined to exercise our extra-ordinary jurisdiction under Article 226 of the Constitution of India. Moreover, as rightly contended by Mr. Malhotra, the learned counsel appearing on behalf of the respondent, the petitioner has an alternate remedy of filing an appeal before the Commissioner / Chief Commissioner of Income-tax. 8. The Writ Petition is, therefore, dismissed. Needless to add that all the contentions of the parties are kept open. The attachment shall continue. However, if the petitioner files an appeal and makes an application for interim relief therein within four weeks from today, no further action for the sale of the flat shall be taken till the interim application is disposed of and, if the order is against the petitioner, for a further period of four weeks after the service of the order upon him. No order as to costs. M.S. SANKLECHA, J. S.J. VAZIFDAR, J. SRP 4/4 Uploaded on - 21/08/2020 Downloaded on - 28/10/2026 04:54:49 Powered by TCPDF (www.tcpdf.org)

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