AHAMED P.B. vs. CENTRAL BOARD OF DIRECT TAXES (CBDT),

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WP(C)/3463/2020HC KeralaKLHC01009681202002 March 2020Bench: HONOURABLE MR. JUSTICE AMIT RAWAL7 pages
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What did the High Court hold?

The High Court disposed of the writ petition by directing the petitioner to deposit 75% of the disputed amount to the income tax authorities within two weeks. Upon this deposit, the order deferring the auction proceedings would continue. The petitioner is also directed to appear before the Commissioner of Income Tax within 15 days to fix a date for hearing the interim application for condonation of delay, after notice to the income tax authorities. The Commissioner is to endeavor to decide all matters collectively within one month thereafter. The court made it clear that if the petitioner fails to deposit the specified amount, the income tax authorities are at liberty to proceed with auction proceedings. The court did not explicitly decide on the merits of the delay condonation but provided a conditional path forward.

What were the facts?

The petitioner, Ahammed P.B., an assessee under the Income Tax Act, 1961, is challenging attachment notices dated November 29, 2019, and reissued on January 29, 2020. The income tax authorities initiated proceedings under Section 147 of the Act for assessment years 2005-06 to 2014-16, raising a total demand of approximately 14 lakhs. The petitioner failed to file statutory appeals within the stipulated 30-day period, leading to sale notices and an auction scheduled for February 12, 2020. The petitioner claims the delay was due to the belief that appeals had been filed by his legal practitioner, which was only discovered upon intimation of recovery proceedings. The High Court had previously deferred re-auction proceedings for three weeks.

What were the issues?

1. Whether the delay in filing statutory appeals against assessment orders under Section 147 of the Income Tax Act, 1961, can be condoned, considering the petitioner's explanation of a misunderstanding with his legal practitioner. Assessee's Contention: The petitioner argues that the delay occurred because he believed his legal practitioner had filed the appeals, and he only realized this was not the case when recovery proceedings were initiated. He seeks condonation of this delay. Revenue's Contention: The revenue contends that the explanation for the delay is not cogent and that such an "atrocious act of aberration" cannot be condoned. They argue that attachment and auction proceedings are inevitable and urge the dismissal of the writ petition.

Which sections of the Income-tax Act were involved?

Section 147

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR. JUSTICE AMIT RAWAL MONDAY, THE 02ND DAY OF MARCH 2020 / 12TH PHALGUNA, 1941 WP(C).No.3463 OF 2020(G) PETITIONER/S: AHAMED P.B. AGED 61 YEARS S/O. THE LATE BEERAN MOIDEEN HAJI, ADINHARE MOOLA, P.O.VIDYANAGAR, KASARGOD-671123. BY ADVS. DR.K.P.PRADEEP SRI.M.S.IMTHIYAZ AHAMMED SMT.T.THASMI RESPONDENT/S: 1 CENTRAL BOARD OF DIRECT TAXES (CBDT), DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, SOUTH BLOCK, NEW DELHI, NEW DELHI-110001, REPRESENTED BY THE SECRETARY. 2 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1, KANNUR RANGE, KANNUR, AAYAKAR BHAVAN, KANNOTHUMCHAL, CHOVVA.P.O., KANNUR-670006. 3 TAX RECOVERY OFFICER, CENTRAL INCOME TAX DEPARTMENT, 3RD FLOOR, ROOM NO.320, CENTRAL REVENUE BUILDINGS, QUEENS ROAD, BENGALURU, KARNATAKA-560001. 4 INCOME TAX OFFICER,WARD I, INCOME TAX DEPARTMENT, KASARGOD, VIDYANAGAR, KASARGOD-671123. 5 TAX RECOVERY OFFICER- CENTRAL INCOME TAX DEPARTMENT, KOCHI, 5TH FLOOR, KANDAMKULATHY TOWERS, M.G.ROAD, COCHIN-682011. 6 COMMISSIONER OF INCOME TAX (APPEALS), KOZHIKODE, AAYAKAR BHAVAN, CENTRAL REVENUE BUILDINGS, MANANCHIRA, KOZHIKODE-673001. SRI JOSE JOSEPH SC THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 02.03.2020, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING:

WP(C).No.3463 OF 2020(G) 2 JUDGMENT The challenge in this present writ petition is the attachment notice dated 29.11.2019, which was reissued 29.1.2020 vide Ext.P14 by the income tax authorities to the petitioner. According to the petitioner, he is an assesse under the Income Tax Act, 1961 and is filing his annual returns regularly. The income tax authorities invoking the power under Section 147 of Income Tax Act alleging escaped assessment issued the orders for the assessment years 2005-06 to 2014-16 raising the total demand of 14 lakhs and odd amount. By virtue of the Income Tax Act, the aforementioned orders are assailable in appeal before the Commissioner of Income Tax, within 30 days. Petitioner did not prefer that appeal, which culminated in sale notice dated 29.11.2019 and 22.1.2020 intimating the date of auction as 12.2.2020. 2. Learned Counsel for the petitioner submits that petitioner vide Ext.P13 filed series of statutory appeals against the assessment orders on 29.1.2020 along with stay application and delay condonation petitions assigning the reason that all the

WP(C).No.3463 OF 2020(G) 3 assessment orders were handed over to the legal practitioner for filing the appeal, and he was under the belief that appeals were filed. But on the intimation of recovery proceedings only petitioner understood that the appeal was not filed. It is in these circumstances the delay occurred. This Court vide order dated 7.2.2020 deferred the re-auction proceedings for a period of three weeks. 3. Learned Counsel for the Income Tax submits that the explanation of delay is bereft of any cogent reasons. According to the learned Counsel, such an atrocious act of aberration cannot be condoned and the proceedings of attachment and auction is inevitable and urges this Court for dismissal of this writ petition. 4. Having heard learned Counsel for the parties this writ petition is disposed of directing the petitioner to deposit 75% of the amount to the income tax authorities within a period of two weeks from today. On deposit of the said amount, the order of this Court dated 7.2.2020 deferring the auction proceedings shall continue to be in force. In case the aforementioned direction is complied with, the petitioner shall appear before the

WP(C).No.3463 OF 2020(G) 4 Commissioner of Income Tax within 15 days from today to fix a date for hearing of the interim application for condonation of delay after notice to income tax authorities and shall endeavor to decide all three matters collectively within a period of one month thereafter. It is made clear that in case of non-deposit of the amount, the income tax authorities will be at liberty to proceed with auction proceedings, in accordance with law. Sd/ AMIT RAWAL JUDGE Jm/

WP(C).No.3463 OF 2020(G) 5 APPENDIX PETITIONER'S/S EXHIBITS: EXHIBIT P1 TRUE COPY OF THE ASSESSMENT ORDER IN PAN ADUPA2525K FOR THE ASSESSMENT YEAR 2005-06 DATED 30.3.2015. EXHIBIT P2 TRUE COPY OF THE ASSESSMENT ORDER IN PAN ADUPA2525K FOR THE ASSESSMENT YEAR 2007-08 DATED 30.3.2015. EXHIBIT P3 TRUE COPY OF THE ASSESSMENT ORDER IN PAN ADUPA2525K FOR THE ASSESSMENT YEAR 2008-09 DATED 30.3.2015. EXHIBIT P4 TRUE COPY OF THE ASSESSMENT ORDER IN PAN ADUPA2525K FOR THE ASSESSMENT YEAR 2009-010 DATED 30.3.2015. EXHIBIT P5 TRUE COPY OF THE ASSESSMENT ORDER IN PAN ADUPA2525K FOR THE ASSESSMENT YEAR 2010-11 DATED 30.3.2015. EXHIBIT P6 TRUE COPY OF THE ASSESSMENT ORDER IN PAN ADUPA2525K FOR THE ASSESSMENT YEAR 2011-12 DATED 30.3.2015. EXHIBIT P7 TRUE COPY OF THE ASSESSMENT ORDER IN PAN ADUPA2525K FOR THE ASSESSMENT YEAR 2014-15 DATED 29.12.2016. EXHIBIT P8 TRUE COPY OF THE NOTICE F NO.ADUPA2525K/TRO(C)/CC-MANGALORE/2019-20 DATED 16.8.2019. EXHIBIT P9 TRUE COPY OF THE REPLY DATED 20.11.2019 SUBMITTED BY THE PETITIONER. EXHIBIT P10 TRUE COPY OF THE SALE NOTICE NO.TRO/CEN/KOCHI/PBAHAMMED/AUCTION/2019-20 DATED 29.11.2019. EXHIBIT P11 TRUE COPY OF THE CIRCULAR DATED 29.2.2016 ISSUED BY THE FIRST RESPONDENT. EXHIBIT P12 TRUE COPY OF THE JUDGMENT DATED 16.1.2020 IN WPC.NO.682 OF 2020. EXHIBIT P13 TRUE COPY OF THE APPEAL DATED 29.1.2020

WP(C).No.3463 OF 2020(G) 6 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2005-06. EXHIBIT P13(A) TRUE COPY OF THE APPEAL DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2007-08. EXHIBIT P13(B) TRUE COPY OF THE APPEAL DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2008-09. EXHIBIT P13(C) TRUE COPY OF THE APPEAL DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2009-10. EXHIBIT P13(D) TRUE COPY OF THE APPEAL DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2010-11. EXHIBIT P13(E) TRUE COPY OF THE APPEAL DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2011-12. EXHIBIT P13(F) TRUE COPY OF THE APPEAL DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2014-15. EXHIBIT P14 TRUE COPY OF THE STAY APPLICATION DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2005-06. EXHIBIT P14(A) TRUE COPY OF THE STAY APPLICATION DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2007-08. EXHIBIT P14(B) TRUE COPY OF THE STAY APPLICATION DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2008-09. EXHIBIT P14(C) TRUE COPY OF THE STAY APPLICATION DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2009-10. EXHIBIT P14(D) TRUE COPY OF THE STAY APPLICATION DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2010-11. EXHIBIT P14(E) TRUE COPY OF THE STAY APPLICATION DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2011-12.

WP(C).No.3463 OF 2020(G) 7 EXHIBIT P14(F) TRUE COPY OF THE STAY APPLICATION DATED 29.1.2020 FILED BEFORE THE 6TH RESPONDENT FOR THE YEAR 2014-15. EXHIBIT P15 TRUE COPY OF THE SALE NOTICE DATED 22.1.2020 ISSUED BY THE 2ND RESPONDENT.

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