K.K.SEBASTIAN vs. THE COMMISSIONER OF INCOME TAX
What did the High Court hold?
The High Court disposed of the writ petitions by quashing the impugned orders and notices (Ext.P14 in WP(C)No.7360 of 2009 and Ext.P13 in WP(C)No.22751 of 2008) specifically concerning the assessment year 1992-93. This was based on the submission that the entire demand for this year had been settled under the Direct Tax Vivad Se Vishwas Rules, 2020. For the assessment year 1993-94, all other contentions raised in the writ petitions were left open. The department was permitted to take appropriate steps based on the decision of the appellate tribunal, and the petitioners were also granted liberty to take appropriate steps in accordance with law based on the tribunal's decision. No specific finding was made on the merits of the dispute for the assessment year 1993-94.
What were the facts?
These two writ petitions, WP(C) No. 22751 of 2008 and WP(C) No. 7360 of 2009, were filed by directors of a private limited company, Metro Stocks and Shares Pvt Ltd. The petitioners challenged orders and notices issued by the Income Tax Department concerning tax demands for the assessment years 1992-93 and 1993-94. The core of the dispute involved the liability of the directors for the company's tax dues. The petitions sought to quash the impugned orders and notices and declare the petitioners not liable for the company's tax dues. The matter was brought before the High Court of Kerala.
What were the issues?
1. Whether the petitioners, as directors, are liable to pay the tax due from Metro Stocks and Shares Pvt Ltd for the assessment years 1992-93 and 1993-94, particularly concerning the demand under Section 179(1) of the Income Tax Act, 1961. The Assessee (Petitioners) contended that they are not liable to pay the tax dues of the company. They sought to quash the orders and notices demanding payment from them. The Revenue (Respondents) sought to recover the tax dues from the directors. The judgment notes that for the assessment year 1992-93, the entire demand has been settled under the Direct Tax Vivad Se Vishwas Rules, 2020. For the assessment year 1993-94, the matter was pending before the appellate tribunal.
Which sections of the Income-tax Act were involved?
179(1)
AI-generated summary — verify with the full judgment below
Heard together (2 matters)
Read from the judgment's own cause title. This page is filed under one of them.
Cause title — parties, addresses and appearances
JUDGMENT These two writ petitions are connected and therefore, I am disposing of these two writ petitions by a common judgment.
W.P.(C)No.22751 of 2008 is filed with the following prayers: “a) issue a writ of certiorari or other appropriate writ, order or direction quashing Ext.P15 order passed by the 1st respondent Ext.P13 order passed by the 2nd respondent. b) issue a writ of certiorari or other appropriate writ, order or direction quashing Ext.P16 notice issued by the 3rd respondent. c) to declare that the petitioner is not liable to pay the tax due from the company for the year 1992- 93 and 1993-94. d) grant such other and further reliefs as this Hon’ble Court may deem fit to grant in the facts and circumstances of the case.”[SIC]
The above writ petition relates to the payment of tax for the assessment year 1992 – 93 and 1993 –
W.P.(C)No.7360 of 2009 is filed with the following prayers: “(i) issue a writ of certiorari or other appropriate writ, order or direction quashing Exhibit-P14 and P16 orders and P17 and P19 demand notices; (ii) Declare that the Petitioner is not liable for any income tax dues from the said Metro Stocks and Shares Pvt Ltd. (iii) Stay the operation of and further proceedings pursuant to Exts.P17 and P19 including recovery of the amounts demanded therein; (iv) Grant such other and further reliefs as this Hon’ble Court may deem fit to grant in the facts and circumstances of the case.”[SIC]
The above writ petition relates to the payment of tax for the assessment year 1992 – 93 and 1993 –
These writ petitions are filed by the Directors of a private Limited Company.
When these writ petitions came up for consideration, both sides submitted that, as far as the assessment year 1992 -93 is concerned, the entire demand has been settled as per the Direct Tax Vivad Se Vishwas Rules, 2020. But as far as the dispute with regard to the assessment year 1993 – 94 is concerned, the matter is pending before the appellate Tribunal. Therefore, these writ petitions can be closed granting liberty to the petitioners to raise all their contentions before the appellate Tribunal as far as the assessment year 1993 – 94 is concerned and the demand under Section 179(1) can be quashed as far as the assessment year 1992 – 93 is concerned. Therefore, these writ petition are disposed of in the following manner: i) Ext.P14 in W.P.(C)No.7360 of 2009 and Ext.P13 in W.P.(C)No.22751 of 2008 are quashed, as far as the assessment year 1992 – 93 is concerned. ii) All other contentions raised in these writ petitions based on the assessment year 1993 -94 is left open and the department is free to take appropriate steps based on the decision of the Tribunal. iii) Petitioners are also free to take appropriate steps in accordance to law based on the decision of the Tribunal. P.V.KUNHIKRISHNAN DM JUDGE
Appendix — schedule of exhibits
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