ABDUSSALAM vs. THE ASSISTANT COMMISSIONER OF INCOME TAX (BPU)

WP(C)/16700/2022HC KeralaKLHC01033783202201 June 2022Author: HONOURABLE MR. JUSTICE GOPINATH P.6 pages

AI SummaryRemanded

What did the High Court hold?

The High Court disposed of the writ petition by directing that if the petitioner files a composite reply to Ext.P13 notice on or before June 10, 2022, the competent authority shall take a decision on any jurisdictional issue raised by the petitioner in the reply. This decision must be made after affording the petitioner an opportunity to present his submissions. The authority is directed to proceed with deciding other issues only after resolving the preliminary issue of jurisdiction. The court also noted that the time limit for filing a reply had expired on March 31, 2022, and directed that sufficient time be granted for filing the reply. The principle established is that jurisdictional challenges in benami proceedings can be raised before the authority, and the authority must decide such preliminary issues before proceeding with the substantive matters, with the High Court intervening to ensure this process.

What were the facts?

The petitioner, Abdussalam, filed a writ petition before the High Court of Kerala challenging proceedings initiated against him under the Prohibition of Benami Property Transactions Act, 1988. The petitioner contended that these proceedings were without jurisdiction. The respondents, represented by the Assistant Solicitor General and Standing Counsel, argued that the petitioner could raise all contentions, including jurisdictional issues, before the concerned authority. They suggested that the writ petition could be disposed of by directing the competent authority to decide the jurisdictional question first. The petitioner also requested an extension of time to file a reply to a notice (Ext.P13), as the original deadline was approaching.

What were the issues?

1. Whether the proceedings initiated against the petitioner under the Prohibition of Benami Property Transactions Act, 1988, are without jurisdiction, as contended by the petitioner? (Question of law) Assessee's Contention: The petitioner argued that the proceedings are "totally without jurisdiction" and therefore, it is open to challenge them directly before the High Court under Article 226 of the Constitution of India. Revenue's Contention: The respondents contended that it is open to the petitioner to raise all contentions, including the jurisdictional issue, before the concerned authority. They submitted that if the petitioner files a composite reply raising the jurisdictional issue, the writ petition can be disposed of by directing the competent authority to decide on the question of jurisdiction before proceeding further. The revenue also noted that the relief should be confined to the petitioner as other co-noticees might have had proceedings advanced against them.

Which sections of the Income-tax Act were involved?

Article 226

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 GOPINATH P. WEDNESDAY, THE 1ST DAY OF JUNE 2022 / 11TH JYAISHTA, 1944 WP(C) NO. 16700 OF 2022 PETITIONER: ABDUSSALAM AGED 39 YEARS KADAKKADAN HOUSE, CHELAKUTH KALLARMANGALAM (P.O.) MALAPPURAM DISTRICT, PIN-676 553. BY ADVS. LATHA ANAND M.N.RADHAKRISHNA MENON GOVIND P. K.R.PRAMOTH KUMAR RADHAKRISHNA PILLAI B SIDHARTH P.S. RESPONDENTS: 1 THE ASSISTANT COMMISSIONER OF INCOME TAX (BPU) BENAMI PROHIBITION UNIT, POORNIMA BUILDING,3RD FLOOR, PANAMPILLY NAGAR, KOCHI, PIN – 682 036. 2 THE DEPUTY DIRECTOR OF INCOME TAX (INVESTIGATION), AAYKAR BHAVAN, SAKTHAN THAMPURAN NAGAR, THRISSUR, PIN - 680 001. 3 THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE 2, KOZHIKODE, AAYAKAR BHAVAN, NORTH BLOCK, NEW ANNEXE BUILDING, MANANCHIRA KOZHIKODE-673 001. 4 THE ASSISTANT DIRECTOR OF INCOME TAX (INVESTIGATION), CHUNDAKKAYIL COMPLEX, OFFICE OF DDIR/ADIT (INV.), MANJAKULAM ROAD, PALAKKAD, PIN - 678 014. BY ADV MANU S., ASG OF INDIA ADV.SUVIN R MENON, CGC ADV.CHRISTOPHER ABRAHAM THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 01.06.2022, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WP(C) NO. 16700 OF 2022 2

JUDGMENT The petitioner has approached this Court challenging proceedings initiated against the petitioner under the provisions of the Prohibition of Benami Property Transactions Act, 1988. 2. The learned counsel for the petitioner submits that the proceedings are totally without juri iction. It is submitted that since the proceedings are totally without juri iction, it is open to the petitioner to challenge those proceedings directly before this Court under Article 226 of the Constitution of India.

The learned Assistant Solicitor General of India, who appears for the 1st respondent and the learned Standing Counsel appearing for respondents 2 to 4 would however contend that it is open to the petitioner to raise all contentions including a contention that the proceedings are without juri iction before the authority concerned. It is submitted that if the petitioner files a composite reply to the notice issued to him and raises a juri ictional issue, the writ petition can be disposed of directing the competent authority to decide on the question of juri iction before proceeding further in the matter.

WP(C) NO. 16700 OF 2022 3

The learned Counsel appearing for the 1st respondent also submits that the relief has to be confined to the petitioner alone as the authority may have proceeded further in respect of other persons who are co-noticees along with the petitioner.

The learned counsel for the petitioner submits that the time granted under Ext.P13 for filing a reply expires on 02.06.2022 and and a weeks time may be granted to enable the petitioner to file a proper reply to Ext.P13. Taking into account the submissions made by both sides, this writ petition will stand disposed of directing that if the petitioner files a composite reply to Ext.P13 notice on or before 10.06.2022, the competent authority shall take a decision on any juri ictional issue raised by the petitioner in the reply after affording an opportunity to the petitioner to make his submissions. The authority shall proceed to decide other issues only after taking a decision on the preliminary issue of juri iction. It is also directed that as the time limit for filing a reply has already expired on 31.03.2022, sufficient time may be granted to file a reply. GOPINATH P. JUDGE DK

WP(C) NO. 16700 OF 2022 4

Appendix — schedule of exhibits

APPENDIX OF WP(C) 16700/2022 PETITIONER EXHIBITS Exhibit P1 TRUE COPY OF THE LETTER DATED 21/03/2021 SUBMITTED BY MR. MOHAMMED SHEREEF. Exhibit P2 TRUE COPY OF THE SUMMONS DATED 16/04/2021 ISSUED TO THE PETITIONER. Exhibit P3 TRUE COPY OF THE UNDATED REPLY FILED 2 BY THE PETITIONER. Exhibit P4 TRUE COPY OF THE SUMMONS UNDER SEC. 131(1A) OF THE INCOME TAX ACT DATED 16/04/2021 ISSUED TO MR. SHEREEF MOHAMMED. Exhibit P5 TRUE COPY OF REPLY E-MAIL DATED 27/04/2021 SENT BY BY MOHAMMED SHEREEF. Exhibit P6 TRUE COPY OF NOTICE DATED 07/09/2021 UNDER SECTION 153C OF THE INCOME TAX ACT, 1961 ISSUED TO THE PETITIONER. Exhibit P7 TRUE COPY OF THE RETURN OF INCOME FILED BY THE PETITIONER WITH RESPECT TO THE ASSESSMENT YEAR 2015-16. Exhibit P7 A TRUE COPY OF THE RETURN OF INCOME FILED BY THE PETITIONER WITH TO RESPECT TO THE ASSESSMENT YEAR 2016-17. Exhibit P7 B TRUE COPY OF THE RETURN OF INCOME FILED BY THE PETITIONER WITH RESPECT TO THE ASSESSMENT YEAR 2017-18. Exhibit P7 C TRUE COPY OF THE RETURN OF INCOME FILED BY THE PETITIONER WITH RESPECT TO THE ASSESSMENT YEAR 2018-19. Exhibit P7 D TRUE COPY OF THE RETURN OF INCOME FILED BY THE PETITIONER WITH RESPECT TO THE WP(C) NO. 16700 OF 2022 5 ASSESSMENT YEAR 2019-20. Exhibit P7 E TRUE COPY OF THE RETURN OF INCOME FILED BY THE PETITIONER WITH RESPECT TO THE ASSESSMENT YEAR 2020-21. Exhibit P7 F TRUE COPY OF THE RETURN OF INCOME FILED BY THE PETITIONER WITH RESPECT TO THE ASSESSMENT YEAR 2021-22. Exhibit P8 TRUE COPY OF THE RETURN OF INCOME FILED BY MOHAMMED SHEREEF WITH RESPECT TO THE ASSESSMENT YEAR 2015-16 . Exhibit P8 A TRUE COPY OF THE RETURN OF INCOME FILED BY MOHAMMED SHEREEF WITH RESPECT TO THE ASSESSMENT YEAR 2016-17. Exhibit P8 B TRUE COPY OF THE RETURN OF INCOME FILED BY MOHAMMED SHEREEF WITH RESPECT TO THE ASSESSMENT YEAR 2017-18. Exhibit P8 C TRUE COPY OF THE RETURN OF INCOME FILED BY MOHAMMED SHEREEF WITH RESPECT TO THE ASSESSMENT YEAR 2018-19. Exhibit P8 D TRUE COPY OF THE RETURN OF INCOME FILED BY MOHAMMED SHEREEF WITH RESPECT TO THE ASSESSMENT YEAR 2019-20. Exhibit P8 E TRUE COPY OF THE RETURN OF INCOME FILED BY MOHAMMED SHEREEF WITH RESPECT TO THE ASSESSMENT YEAR 2020-21 . Exhibit P8 F TRUE COPY OF THE RETURN OF INCOME FILED BY MOHAMMED SHEREEF WITH RESPECT TO THE ASSESSMENT YEAR 2021-22. Exhibit P9 TRUE COPY OF THE ASSESSMENT ORDER DATED 31/03/2022 ISSUED TO THE PETITIONER, WITH RESPECT TO THE ASSESSMENT YEAR 2015-16. Exhibit P 9 A TRUE COPY OF THE ASSESSMENT ORDER DATED 31/03/2022 ISSUED TO THE PETITIONER, WITH WP(C) NO. 16700 OF 2022 6 RESPECT TO THE ASSESSMENT YEAR 2016-17. Exhibit P9 B TRUE COPY OF THE ASSESSMENT ORDER DATED 31/03/2022 ISSUED TO THE PETITIONER, WITH RESPECT TO THE ASSESSMENT YEAR 2017-18. Exhibit P 9 C TRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2022 ISSUED TO THE PETITIONER, WITH RESPECT TO THE ASSESSMENT YEAR 2018-19. Exhibit P9 D TRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2022 ISSUED TO THE PETITIONER, WITH RESPECT TO THE ASSESSMENT YEAR 2019-2020. Exhibit P9 E TRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2022 ISSUED TO THE PETITIONER, WITH RESPECT TO THE ASSESSMENT YEAR 2020-21. Exhibit P9 F TRUE COPY OF THE ASSESSMENT ORDER DATED 31.03.2022 ISSUED TO THE PETITIONER, WITH RESPECT TO THE ASSESSMENT YEAR 2021-22. Exhibit P10 TRUE COPY OF NOTICE DATED 03/01/2022 UNDER SECTION 24(1) OF THE PROHIBITION OF BENAMI PROPERTY TRANSACTION ACT, 1988. Exhibit P11 TRUE COPY OF THE REPLY DATED 11/01/2022 SUBMITTED BY THE PETITIONER . Exhibit P12 TRUE COPY OF THE ORDER OF PROVISIONAL ATTACHMENT DATED 20/01/2022. Exhibit P13 TRUE COPY OF NOTICE DATED 04/02/2022 87 UNDER SECTION 26(1) OF THE PBPT ACT . Exhibit P14 TRUE COPY OF THE INTERIM ORDER DATED 09/03/2020 IN W.P.(C) NO. 6938 OF 2020.

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