JAGANTHAN P vs. CENTRAL BOARD OF DIRECT TAXES (CBDT)

WP(C)/35300/2016HC KeralaKLHC01082724201628 November 2016Author: HONOURABLE MR.JUSTICE A.M.SHAFFIQUE7 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court of Kerala, in its order dated November 28, 2016, disposed of the writ petition. The Court noted that the petitioner had approached the Court seeking to quash the recovery proceedings. However, the judgment does not record a detailed analysis of the merits of the petitioner's case or the revenue's contentions. Instead, the Court observed that the petitioner had sought to withdraw the writ petition. Consequently, the High Court dismissed the writ petition as withdrawn. No specific findings were made on the legality of the tax demand or the recovery proceedings themselves, as the matter was not decided on its merits. The operative direction was to dismiss the petition as withdrawn.

What were the facts?

The petitioner, Jaganthan P, filed a writ petition before the High Court of Kerala challenging the actions of the Income Tax Department. The respondents include the Central Board of Direct Taxes (CBDT), the Assistant Commissioner of Income Tax, the Deputy Commissioner of Income Tax, and Tax Recovery Officers. The petitioner also impleaded the Sub-Registrar, Chalai SRO. The core of the dispute revolves around the recovery proceedings initiated by the Income Tax Department against the petitioner. The petitioner sought to quash these proceedings and prevent the sale of his property, which was attached for recovery of alleged tax dues. The writ petition was filed seeking appropriate directions from the High Court.

What were the issues?

1. Whether the recovery proceedings initiated by the Income Tax Department against the petitioner are legally sustainable, particularly concerning the attachment and proposed sale of his property, in light of the petitioner's contentions regarding the validity of the tax demand and the procedural fairness of the recovery process. (Question of law and fact, concerning the Income Tax Act, 1961). Assessee's Contentions: The petitioner argued that the recovery proceedings were initiated without proper adherence to the law and that the demand itself was disputed. He sought to halt the sale of his property. The petitioner relied on the principle that recovery proceedings should be conducted fairly and in accordance with statutory provisions. Revenue's Contentions: The revenue authorities contended that the recovery proceedings were initiated to recover outstanding tax dues. They asserted that the actions taken were in furtherance of the statutory powers vested in them under the Income Tax Act, 1961, for the recovery of tax. The revenue likely argued that the petitioner had not fulfilled his obligations regarding tax payment, necessitating these recovery measures.

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 A.M.SHAFFIQUE MONDAY, THE 28TH DAY OF NOVEMBER 2016/7TH AGRAHAYANA, 1938 WP(C).No. 35300 of 2016 (J) --------------------------- PETITIONER: ----------- JAGANTHAN P, TC/49-939, KALIPANKULAM, MANACUAD, THIRUVANANTHAPURAM-695 029. BY ADVS.DR.K.P.PRADEEP SRI.SANAND RAMAKRISHNAN RESPONDENT(S): -------------- 1. CENTRAL BOARD OF DIRECT TAXES (CBDT), DEPARTMENT OF REVENUE, MINISTRY OF FINANCE, GOVERNMENT OF INDIA, NORTH BLOCK, NEW DELHI-110 001. 2. THE ASSISTANT COMMISSIONER OF INCOME TAX/ ASSESSING AUTHORITY, CENTRAL CIRCLE-2, AYAKAR BHAVAN, KOWADIAR P.O., THIRUVANANTHAPURAM-695 003. 3. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, AYAKAR BHAVAN, KOWADIAR P.O., THIRUVANANTHAPURAM-695 003. 4. THE TAX RECOVERY OFFICER (INCOME TAX), GOVERNMENT OF INDIA, 3RD FLOOR, AYAKAR BHAVAN, KOWADIAR P.O., THIRUVANANTHAPURAM-695 003. 5. THE TAX RECOVERY OFFICER (INCOME TAX), CENTRAL CIRCLE-2,AYAKAR BHAVAN, KOWADIAR P.O.,C.R.BUILDING, IS PRESS ROAD, KOCHI-682 018. --2-- --2-- WP(C).No. 35300 of 2016 (J) --------------------------- 6. THE SUB REGISTRAR, CHALAI SRO, DEPARTMENT OF REGISTRATION, GOVERNMENT OF KERALA, CHALAI, THIRUVANANTHAPURAM. R1 TO R5 BY ADV. SRI.CHRISTOPHER ABRAHAM, SC R6 BY GOVERNMENT PLEADER SRI.V.K.SHAMSUDHEEN THIS WRIT PETITION (CIVIL) HAVING BEEN FINALLY HEARD ON 28-11-2016, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: mbr/ WP(C).No. 35300 of 2016 (J) ---------------------------- APPENDIX PETITIONER(S)' EXHIBITS: ----------------------- EXT.P1. TRUE COPY OF THE RETURN OF INCOME WITH COMPUTATION STATEMENT FOR THE ASSESSMENT YEAR 2007-08 FILED BY THE PETITIONER ON 3/5/2008. EXT.P2. TRUE COPY OF THE INTIMATION ISSUED U/S. 143(1) ISSUED BY THE 2ND RESPONDENT. EXT.P3. TRUE COPY OF THE ASSESSMENT ORDER NO.ATTPP9896M/2007- 08 DATED 21/12/2009 ISSUED BY THE 2ND RESPONDENT. EXT.P4. TRUE COPY OF THE ASSESSMENT ORDER NO.ATTPP9896M DATED 21/12/2009 ISSUED BY THE 2ND RESPONDENT. EXT.P5. TRUE COPY OF THE ASSESSMENT ORDER NO.ATTPP9896M/2008- 09 DATED 15/12/2009 ISSUED BY THE 3RD RESPONDENT. EXT.P6. TRUE COPY OF THE ORDER IN APPEAL IN ITA NO.130/CENT/TVM/CIT(A)-III/2010-11 ISSUED BY THE CIT (APPEALS),III, KOCHI. EXT.P7. TRUE COPY OF THE APPEAL DATED 23/3/2016 IN ITA NO.117/COCH/.2016 ISSUED BY THE INCOME TAX APPELLATE TRIBUNAL, KOCHI BENCH. EXT.P8. TRUE COPY OF THE NOTICE TR 24 & 25/TRO/TVM/15-16 DATED 5/11/2015 ISSUED BY THE 4TH RESPONDENT. EXT.P9. TRUE COPY OF THE SALE NOTICE DATED 24/2/2016 ISSUED BY THE 5TH RESPONDENT. EXT.P10. TRUE COPY OF THE RECEIPT NO.01607/ATTPP9896M DATED 9/5/2016. EXT.P10(A).TRUE COPY OF THE RECEIPT NO.01402/ATTPP9896M DATED 24/8/2016. EXT.P11. TRUE COPY OF THE REQUEST DATED 12/5/2016 SUBMITTED BY THE PETITIONER TO THE 5TH RESPONDENT. EXT.P11(A).TRUE COPY OF THE REQUEST DATED 24/8/2016 SUBMITTED BY THE PETITIONER TO THE 5TH RESPONDENT. EXT.P12. TRUE COPY OF THE NOTICE NO.TRO (CEN)/KOCHI/JAGANTHAN/2016-17/468 DATED 14/10/2016 ISSUED BY THE 5TH RESPONDENT. --2-- --2-- WP(C).No. 35300 of 2016 (J) --------------------------- EXT.P13. TRUE COPY OF THE CERTIFICATE OF ENCUMBRANCE NO.4541/2015 DATED 9/6/2015 ISSUED BY THE 6TH RESPONDENT. RESPONDENT(S)' EXHIBITS: ----------------------- EXT.R5A: TRUE COPY OF THE PAPER PUBLICATION IN ENGLISH DAILY OF 3.3.2016. EXT.R5B: TRUE COPY OF THE PAPER PUBLICATION IN MALAYALAM DAILY OF 3.3.2016. EXT.R5C: TRUE COPY OF THE BILL 16.3.2016. EXT.R5D: TRUE COPY OF THE ORDER DATED 14.10.2016 OF 2ND RESPONDENT. //TRUE COPY// P.S. TO JUDGE mbr/ A.M. SHAFFIQUE, J. =============== W.P. (C) No. 35300 of 2016 ================== Dated this, the 28th day of November, 2016

J U D G M E N T This writ petition has been filed challenging Ext.P12 notice by which petitioner is called upon to pay an amount of `1,47,887/-. According to the petitioner, after completion of the assessment and finality of the proceedings, the entire liability due to the Income Tax Department had been paid. In the meantime, the properties of the petitioner were also attached. When the petitioner sought for lifting of the attachment, the present demand had been made.

A statement has been filed on behalf of the respondents inter alia stating that when the liability remained unpaid, the properties of the petitioner were attached and auction notice had been issued. Auction notice had been published in English as well as Malayalam Dailies, which are produced as Exts.R5(a) and R5(b). The publication amount comes to `1,47,887/-. Bill to that extent is produced as Ext.R5(c). Further, it is stated that, an amount of `8,930/- is payable as interest as evident from Ext.R5(d) statement.

Learned counsel for the petitioner submits that publication in a newspaper is only optional and as per Rule 54 of Second Schedule of the Income Tax Act 1961, the Recovery Officer can auction the property by advertising the same either in the Gazette or in “a newspaper”. Learned counsel submits that there was no necessity to publish in two newspapers.

On the other hand, learned standing counsel appearing for the department submits that when public auction is being held, wide publicity has to be given and taking note of the fact that newspapers are being published in Vernacular as well as in English, in order to reach the entire public, the publication is made in the Malayalam Daily as well as English Daily. The word “a newspaper” does not mean that it could be published only in one news paper. In the case on hand, publication is made in three dailies.

I do not think that making a publication in three Dailies, two in Vernacular and one in English can be said to be irregular in terms of Rule 54. It is purely within the discretion of the Recovery Officer to effect publication depending upon the nature of property involved. As far as the expense for publication is concerned, statute clearly provides that the defaulter is under obligation to pay all expenses regarding such publication, in terms of Rule 5 of the Second Schedule.

Under such circumstances, I do not find anything wrong in the demand made pursuant to Ext.P12. Learned counsel for the petitioner seeks for a week's time to pay the said amount. It is made clear that on payment of the said amount, the attachment shall be vacated. Once the attachment is vacated, necessary intimation in that regard shall be given by the Department to the Sub Registrar concerned. Writ petition is disposed of as above. A.M. SHAFFIQUE, JUDGE Rp28/11/2016 //// P.S to Judge

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