Sri Vimalakumar Agarwal, vs. The Dy. Commissioner of Income tax, Circle 5(3),
What did the High Court hold?
The High Court noted that the Income Tax Department, represented by the Tax Recovery Officer-3, Hyderabad, had acknowledged that the notice previously issued under Section 226(3) of the Income Tax Act, 1961, was unsustainable. Consequently, the Department had withdrawn the said notice, as communicated on 11.03.2013. In light of this withdrawal by the revenue, the Court found that no further orders were required to be passed in the present company application. The principle established is that if a party issues a notice and subsequently withdraws it on the ground of it being unsustainable, the proceedings based on that notice become infructuous. The Court's decision is based on the factual admission and action of the revenue.
What were the facts?
This judgment concerns Company Application No. 351 of 2013, arising from Company Application No. 1374 of 2006, which is itself part of Company Petition No. 112 of 2007. The applicant is M/s. Southern Continental Contractors Limited, and the respondents are Sri G. Suresh and two others. The Income Tax Department, through the Tax Recovery Officer-3, Hyderabad, had issued a notice under Section 226(3) of the Income Tax Act, 1961. Subsequently, the Income Tax Department realized that this notice was not sustainable and formally withdrew it by a communication dated 11.03.2013. The learned Advocate Commissioners, appointed to discharge the functions of the Liquidator of the company under liquidation, brought this withdrawal to the notice of the Court.
What were the issues?
1. Whether the notice issued by the Income Tax Department under Section 226(3) of the Income Tax Act, 1961, was sustainable in law? Assessee's Contention: The assessee (M/s. Southern Continental Contractors Limited) implicitly argued that the notice was not sustainable, leading to its withdrawal by the revenue. Revenue's Contention: The Income Tax Department, through the Tax Recovery Officer-3, Hyderabad, conceded that the notice issued under Section 226(3) of the Income Tax Act, 1961, was not sustainable and therefore withdrew it.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
ORDER: The learned Advocate Commissioners, who have been appointed to discharge the functions of the Liquidator of the company under Liquidation, have brought to my notice that the Income Tax Department, has realized that the notice issued by them earlier under Section 226(3) of the Income Tax Act, 1961, is not sustainable and hence, they have withdrawn it and the communication to that effect has been addressed by the Tax Recovery Officer-3, Income Tax Department, Hyderabad on 11.03.2013. In that view of the matter, no further orders are needed to be passed in this company application. Accordingly, this company application is disposed of.
_______________________________________ JUSTICE NOOTY RAMAMOHANA RAO 31.07.2015 ska
More judgments on Section 226(3)
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- DCIT, Central Circle-1(1), Hyderabad vs Giridhari Homes Private Limited, HyderabadITA 91/HYD/2026[2017-18]Status: Disposed25 Sept 2026AY 2017-18
- Giridhari Homes Private Limited… vs ACIT, Central Circle-1(1), HyderabadITA 2066/HYD/2026[2019-20]Status: Disposed25 Sept 2026AY 2019-20
- Giridhari Homes Private Limited… vs ACIT, Central Circle-1(1), HyderabadITA 2065/HYD/2026[2018-19]Status: Disposed25 Sept 2026AY 2018-19
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