THE DEPUTY COMMISSIONER OF INCOME TAX vs. STATE BANK OF INDIA AND ANR.

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SPIA/4/2022HC BombayHCBM06000047202202 February 2023Author: HON'BLE SHRI JUSTICE N. J. JAMADAR3 pages
AI SummaryAllowed

What did the High Court hold?

The Special Court held that the Income Tax Department should be impleaded as a party respondent to MA No. 13 of 2022. The Court reasoned that the Income Tax Department lays a claim competing for the disbursement of the amount under Section 11 of the TORTS Act, and these competing claims deserve to be considered and adjudicated on merits. Therefore, there could be no objection to the impleadment, as the presence of the Income Tax Department would assist the Court in arriving at a just decision. The application for impleadment was allowed. The operative directions were that the State Bank of India shall amend its application to implead the Income Tax Department as a party respondent and serve the amended copy within two weeks. The respondents, including the newly impleaded respondent, were granted three weeks from service to file their respective affidavits-in-reply. The application was disposed of.

What were the facts?

The Income Tax Department (Applicant) filed an Interim Application (IA) No. 4 of 2022 seeking impleadment as a party respondent in Miscellaneous Application (MA) No. 13 of 2022. MA No. 13 of 2022 was filed by the State Bank of India (Respondent No. 1) seeking release of an amount under Section 11(2)(c) of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992 (TORTS Act). The State Bank of India filed an affidavit-in-reply opposing the impleadment. The Income Tax Department claims a competing interest in the disbursement of amounts under Section 11 of the TORTS Act. The Special Court noted that objections from the Income Tax Department were previously considered in MA No. 1 of 2021, which was rejected by an order dated 30th September, 2022.

What were the issues?

1. Whether the Income Tax Department should be impleaded as a party respondent to MA No. 13 of 2022, which concerns the release of funds under Section 11(2)(c) of the Special Court (TORTS Act), 1992, given its competing claim for disbursement under Section 11 of the same Act. Assessee's Arguments: The Income Tax Department (Applicant) contended that it has a competing claim for the disbursement of amounts under Section 11 of the TORTS Act and that its presence would assist the Court in arriving at a just decision. (Implicit in the application and the court's reasoning). Revenue's Arguments: No specific arguments were recorded for the Revenue (Income Tax Department) in opposition to the impleadment. The State Bank of India (Respondent No. 1) opposed the prayer for impleadment in its affidavit-in-reply.

Which sections of the Income-tax Act were involved?

Section 11(2)(c),Section 11

AI-generated summary — verify with the full judgment below

9- SPIA-4-22.DOC Sayali Upasani IN THE SPECIAL COURT Constituted under the Special court [Trial of Offences Relating to Transactions in Securities] Act, 1992 Udayan Mukherjee i/b Ranit Basu for Applicant Mr. Tushad Cooper Sr. Advocate with Mr. Aditya Singh i/b Little & Co for Respondent No. 1 Mr. Ashwin Mehta for Respondent / Notified Parties. Mr. Hormaz Daruwalla ib/ Ms. Shilpa Bhate for Respondent/ Custodian. CORAM:- N. J. JAMADAR, J.

Judge, Special Court

DATED:- 3rd FEBRUARY, 2023 PC:- 1) Income Tax Department has taken out this application, seeking impleadment as the party respondent to the application, preferred by the State Bank of India, seeking reliefs 1/3

9- SPIA-4-22.DOC of release of amount under Section 11(2)(c) of the Special Court (Trial of Offences Relating to Transactions in Securities) Act, 1992. 2) An affidavit-in-reply is filed by the State Bank of India opposing the prayer of impleadment. 3) Heard Mr. Chatterjee, the learned Senior Counsel for the applicant, Mr. Cooper, the learned Senior Counsel for the State Bank of India and Mr. Daruwalla, the learned Counsel for the Custodian. 4) Mr. Cooper submitted that in the previous petition, being M.P. No. 1 of 2021, this Court has already considered the objections on behalf of the Income Tax Department. By an order dated 30th September, 2022, the said Petition came to be rejected. 5) Evidently, Income Tax Department lays a claim competing for the disbursement of the amount under Section 11 of the TORTS Act. 6) Undoubtedly, the competing claims deserve to be considered and adjudicated, on merits. Hence, there can be no objection to the impleadment of the Income Tax Department. The presence of the Income Tax Department would also assist 2/3

9- SPIA-4-22.DOC the Court in arriving at a just decision of the case. 7)

Hence the application stands allowed. 8) Applicant- State Bank of India shall amend the application and implead Income Tax Department as party respondent to this application and serve amended copy of the application within a period of two weeks. 9) The respondents, including the newly impleaded respondent, are at liberty to file an affidavit-in-reply within a period of three weeks of being served with the amended copy of the application. 10) The application stands disposed. 11) Stand over to 10th March, 2023. [N. J. JAMADAR, J.] 3/3

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