TAX RECOVERY OFFICER, ERNAKULAM vs. THE INCOME TAX OMBUDSMAN, COCHIN

The property belonging to the second respondent/assessee was attached by the department and an assessment order under Section 158 B C read with Section 158 B D and 143 (3) of the Income Tax Act was passed. The said assessment order was set aside by the Income Tax Appellate Tribunal as per order dated 4.6.2008; pursuant to which, the demand was reduced to 'Nil', under which circumstance the net refund of Rs. 32,33,592/- was also ordered and granted to the assessee. It was in the said circumstances, that the assessee filed a petition before the Tax Recovery Officer for lifting the attachment, who considered the same and passed Ext.P1 order stating that, the request could not be considered as the proceedings had not become final. The : 2 : assessee approached the Commissioner of Income Tax (Central) with the same request who also turned down the same, as per order dated 19.3.2009 holding that the assessment had not become final.

Met with the situation, the assessee approached the first respondent/Ombudsman, who considered the grievance of the second respondent/assessee and passed Ext.P3 order dated 15.4.2009 directing the department to cancel and withdraw the attachment effected on the assessee's residential property. Observing that the order passed by the first respondent was not in conformity with Ext.P4 guidelines, the same was sought to be reviewed by filing Ext.P5 petition, which was considered and rejected by the first respondent as per Ext.P6 proceedings. The petitioners/department are challenging Exts.P3 and P6 orders passed by the first respondent stating that, they are not orders on administrative aspects, but involves interpretation of provisions of Section 225 (2) and 225 (3) of the Income Tax Act and hence beyond the scope and jurisdiction of the 1st respondent.

It has been pointed out from the part of the petitioners particularly in 'Ground G' of the Writ Petition, that the remedy of the assessee was only by way of filing a 'Writ Petition' before this Court and not by way of a 'Complaint' before the first respondent/Ombudsman. It is however conceded by the petitioners that, in the meanwhile, the assessee had approached this Court by filing W.P.(C) No. 17321 of : 3 : 2009, where interference was made by this Court and the department was directed to lift the attachment (however stating that, the said judgment is intended to be challenged by filing Writ Appeal before the Division Bench).

The lifting of attachment over the property in question is sought to be resisted by placing reliance on the appeal preferred by the department against the order passed by the Tribunal under Sec. 260 A stating that, the concerned appeal (ITA No. 419/2009) has already been admitted on 10.7.2009 (Paragraph 1 of the Writ Petition). With regard to the right of the department to challenge the order passed by the Tribunal, it is beyond any doubt that there is adequate provision under Section 260 A of the I.T. Act to file an appeal before the Division Bench of this Court within 4 months as prescribed and such appeal is liable to be entertained, if there is substantial question of law. Considering the fact that the concerned order was passed by the Tribunal as early as on 4.6.2008, when WP (C) 17321 of 2009 had come up for consideration before this Court, the standing counsel for the department was directed to get instruction as to the pendency of the appeal stated as filed, challenging the order passed by the Tribunal. Eventhough the matter was adjourned on different occasions, the department could not substantiate the pendency of the appeal, nor could even furnish the number of appeal, if it were already numbered. It : 4 : was in the said circumstance that the judgment was passed in W.P.(C) No. 17321 of 2009 on 1.7.2009 holding that, it had to be presumed that the order had already become final and in the said circumstances, a positive direction was given to the department to lift the attachment. It is now conceded in paragraph 1 of the present Writ Petition that, ITA No. 419 of 2009 was admitted by this Court only on 10.7.2009, i.e. much after the disposal of W.P. (C) No. 17231 of 2009 by this Court.

The learned standing counsel for the department submits that, the statutory appeal preferred against the order passed by the Tribunal (ITA 419 of 2009) as well as the appeal stated as preferred against the judgment passed by this Court in WP (C) No. 17321 of 2009 have been admitted also granting interim stay. Since the direction given by this Court in W.P.(C) No. 17321 of 2009 was to lift the attachment and since the said direction is stated as stayed by the Division Bench of this Court, the impugned orders passed by the Ombudsman (Exts. P3 and P6) have lost the significance. This is more so, since the petitioners themselves have conceded in 'Ground G' as noted above, that the remedy of the assessee could only be by filing a Writ Petition before this Court and not by filing complaint before the Ombudsman, which course stands satisfied; in view of the subsequent developments.

In the above circumstances, the question, as to whether the 1st respondent Ombudsman is having lawful authority to have passed : 5 : Exts.P3 and P6 orders and whether the such orders are in conformity with Ext.P4 guidelines is left open. Interference is declined and the Writ Petition is dismissed accordingly. P. R. RAMACHANDRA MENON, JUDGE kmd