Najaf Ali Khan vs. The Chief Commissioner of Income Tax-II

WP/6434/2012HC TelanganaHBHC01044037201226 August 2025Bench: P.SAM KOSHY,SUDDALA CHALAPATHI RAO8 pages

AI SummaryWithdrawn

What did the High Court hold?

The High Court disposed of both writ petitions. The court noted that the substantial grievance of the petitioners was the attachment of their properties by the Income Tax Authorities as security for future tax liability. However, during the pendency of the writ petitions, the Income Tax Department reconciled the accounts. After adjusting an outstanding demand of Rs. 2,62,79,754/-, the balance amount was ordered to be released in favour of the H.E.H. Nizam's Jewellery Trust. Given this development, the court found that the very purpose for which the writ petitions were filed stood redressed. Consequently, the petitioners indicated they did not wish to pursue the petitions further. The court held that in view of the settlement and the redressal of the grievance, the petitions were disposed of. No order as to costs was made.

What were the facts?

The petitioners, Najaf Ali Khan and the Nizam Family Welfare Association (in WP 6434 of 2012) and Sb-Rookya Begum and Mir Mahboob Ali Khan (in WP 194 of 2016), filed writ petitions before the High Court of Telangana at Hyderabad. The core grievance was the Income Tax Authorities' action in attaching properties of the petitioners as security for future tax liabilities, allegedly for over 20 years, while substantial refunds were due. The petitioners sought a declaration that such attachment was illegal and arbitrary, and prayed for the lifting of the lien/attachment and release of funds, including accrued interest. The petitions were filed under Article 226 of the Constitution of India.

What were the issues?

1. Whether the action of the Income Tax Authorities in continuing a lien/attachment over the petitioners' properties as security for future tax liability, for an extended period, is illegal, arbitrary, and violative of constitutional rights (Articles 14, 16, and 21)? Assessee's contention: The petitioners argued that the attachment of their properties as security for future tax liability was illegal, arbitrary, and contrary to law, especially when significant refunds were due to them. They sought the lifting of the lien/attachment and the release of their proportionate share of funds, including accrued interest, from the State Bank of Hyderabad. Revenue's contention: The judgment records that the learned Senior Standing Counsel for the Income Tax Department submitted that pending the writ petitions, the account had been reconciled, and after adjusting an outstanding demand, the balance amount was ordered to be released in favour of the H.E.H. Nizam's Jewellery Trust. The revenue did not contest the core issue of the legality of the attachment but presented a factual development that resolved the dispute.

AI-generated summary — verify with the full judgment below

[ 348e ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY, THE TWENTY SIXTH DAY OF AUGUST TWO THOUSAND AND TWENTY FIVE PRESENT THE HONOURABLE SRI JUSTICE P.SAM KOSHY AND THE HONOURABLE SRI JUSTICE SUDDALA CHALAPATHI RAO WRIT PETITION NOS: 6434 OF 2012 AND194 OF 2016 W.P.No.6434 of 2012 Between: 1. Najaf Ali Khan, S/o.Late Mr.Hashim Jah Bahadur, Business, Rl/o.Hyderabad. 2. Nizam Family Welfare Association, a Regd Body, represented by its President t\4r.Najaf Ali Khan,S/o.Late Mr.Hashim Jah Bahadur aged about 47 years,Occ Business Rl/o.Hyderabad. ...,.PETITIONERS AND 1. The Chief Commissioner of lncome Tax-ll, Andhra PRadesh,l.T.Towers, A.C.Guards, Hyderabad. 2. The Commissioner of lncome Tax -Vl, LT.Towers, A.C.Guards, Hyderabad. 3. The Additional Commissioner of lncome Tax, Range 9 lT Towers, A.C.Guards, Hyderabad. 4. The Asst.Commissoner of lncome Tax,iircle 9(1), lT Towers, A.C.Guards, Hyderabad. 5. State Bank of Hyderabad, Gunfoundry Branch, Rep.by its Branch Manager, Hyderabad. .....RESPONDENTS Petilion Under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue any appropriate writ order or direction more particularly a writ in the nature of writ of mandamus and declare the abtion of lhe respondents in continuing lien over an amount of Rs.8,99,261560/- now lying in Fixed Deposits in e

state Bank of Hyderabad, Gunfoundry Branch, Hyderaba J when huge amount of refunds is due to the petitioners herein as illegal,. arbit-i ry, contrary to law and violative of Article '14,16 and 21 of the Constitution ,f lndia and grant the consequential relief by directing the respondents here n to lift lien over the proportionate share of the members of the 2nd t ( :itioner Association in Rs.8,99,26,5601 now lying in the Fixed Deposts in S:i te Bank of Hyderabad Gunfoundry Branch, Hyderabad and pay the said amoL r . to the petitioners and issue any other appropriate writ order or direction. |.A.NO:1 OF 2012 (WPMP.NO: 81 66 0F 2012) Petition under Section 15'1 cpc praying that in thrr :ircumstances stated in the affidavit filed in support of the petition, the High cc -rrt may be pleased to direct the respondents herein to pass final orders r the case of all the beneficiaries as directed by this Hon'ble court in wp.Nc 9.103 of 2005 within a period of 2 months pending disposal of this wril pelition. l.A.NO:2 oF 2012 MP. N 8167 0F 2012 - - Petition under section 151 cpc praying that in the { ircumstances stated in the affidavit filed in support of the petition, the High c,) rt may be pleased to direct lhe respondents to pay their proportionate share in rrore than 20 euarterly interests on the FDR amounts laying in State Bank of - lderabad, Gunfoundr! Branch to the petitioners pending disposal of this writ petili( n |.A.NO:1 O PMP. NO: 5980 OF 2014)' Petition Under section 151 cpc praying that in the c rcumsrances stated in the affidavit filed in support of the petition, the High c(,r rt may be preased to advance the hearing of the Writ petition and post the sirr re next week for finar hearing or alternatively direct the respondents 1 to 4 rerein lo release the proportionatb share of the members of second petitioner herein in the ihterest accrued on the Fixed Deposits with the 5th respondent imrr rdiately. t F 14

I.A.NO:1 OF 2016 WPMP. NO: 41719 OF 2016 Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to direct the official respondents herein to file all consequential orders passed in all the appeals filed by the members of the second petitioner herein after serving copies to the petitioners counsel, pending disposal of the W.P.No. 6424 of 2012. Counsel for the Petitioners : SRI DANTU SRINIVAS Counsel for the Respondent Nos.1 to 4 : SRI K.SUDHAKAR REDDY, LEARNED SENIOR STANDING COUNSEL FOR THE INCOME TAX DEPARTMENT Counsel for the Respondent No.5 : - w.P.NO: '194 OF 2016 Between: 1. Sb-Rookya Begum, D/o late Rajjab Jah Bahadur, aged 75 years, Housewife/Patient, R/o 3-5-786/521111, Qaim Manzil, King Koti, Hyderabad. 2. Mir Mahboob Ali Khan,, L.R of Sb.Asmathunnisa Begum, Aged 40 years, Occ Business, R/o King Koti, Hyderabad. .....PETITIONERS AND 1. The Chief Commissioner of lncome Tax-ll, l.T.Towers, A.C.Guards, Masab Tank, Hyderabad - 500 004. 2. The Commissioner of lncome Tax - 7, l.T.Towers, A.c.Guards, Masab Tank, Hyderabad - 500 004. 3. The Additional Commissioner of lncome Tax, Ranga - 9, l.T. Towers, A.C.Guards, Masab Tank, Hyderabad - 500 004. 4. The lncome Tax Officer, Ward 9(4), Room No. 247,2nd Floor, Masab Tank, Hyderabad - 500 004. 5. H.E.H. The Nizam's Jewellary Trust, Rep. by its Secretary, Single Mahal, Purani Haweli, Hyderabad. a

State Bank of Hyderabad., Gunfoundry Branch, rep. t I its Branch Manager, Hyderabad. ..,..RESPONDENTS Petition Under Article 226 of the Constitution of I dia praying that in the circumstances stated in the affidavit filed therewith, I e High Court may be pleased to issue any appropriate Writ, order or direction r tre particularly a writ of mandamus and declare that respondents 1 to 4 have rtr powers under lncome Tax Act or Wealth Tax Act to attach the properties o he assess (Petitioners herein) as security for any future tax liability and continue he attachment for more than 20 years, when huge amount of refunds are due to | -. petitioners herein and others, and declare such altachment as illegal, arbitr;r y, contrary to law and violative of Articles 14 and 21 of the Constitution <' lndia and grant the consequential relief by directing the respondents 1 to 4 rerein to lift attachment over the said amount and issue any other appropriate wr t order or direction. LA.NO:4 OF 2016(WPMP. NO: 246 OF 2016) Petition Under Section 15'l CPC praying that in th r the affidavit filed in support of the petition, the High O, direct the respondent 1 to 4 herein to pay arrears of r above mentioned Fixed Deposit amount of Rs. 8.54 c continue to pay quarterly interest regularly to the petiti( r the above writ petition. l.A.NO:5 OF 2016 (WPMP.NO: 247 OF 20161 Petition Under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High (),urt may be pleased to direct the respondents 1 to 4 to pass consequential/ rodification orders ancl finalize the matters as directed by this Honble Court in V/ p.No. 9103 of 2005 and l W.P.No. 44 of 2O06 based on the Xerox Copies of he orders filed by the Petitioners before them within one month pending cji,j osal of the above writ petition. t.A.NO: 7 OF 2016(WPMP. NO: 41710 0F 2016) Petition under section 151 cpc praying that in th€ circumstances stated in the affidavit filed in support of the petition, the High (l )urt may be pleased to circumstances stated irr urt may be pleased to .tarterly interest on the ores till date and also ers pending disposal of

direct the official respondents herein to file all consequential orders passed in all the cases(appeals) after serving copies to the petitioner's counsel, pending disposal of the writ petition. Counsel for the Petitioners : SRI DANTU SRINIVAS Counsel for the Respondent Nos.1 to 4 : SRI K.SUDHAKAR REDDY, LEARNED SENIOR STANDING COUNSEL FOR THE INCOME TAX DEPARTMENT Counsel for the Respondent No.5 : - The Court made the following COMMON ORDER a

THE HONOURABLE SRI JUSTICE P.SAM KOSH'I AND TTIE HONOfIRABLE SRI JUSTICE ST]DDALA CHALAPAI" II RAO \,VRIT PETITION Nos.643 4 of 2Ol2 and 194 of 20 I COMMON ORDER: (per Hon'bte Sri Justice P.Sam Kosny\) Heard Sri Dantu Srinivas, learned counsel for the I titioners; Sri K-sudhakar Reddy, learned Senior Standing Counsel for I e Income Tax Depaftment, for respondent Nos.l to 4' 2. 'fhe substantial grievance of the petitioners in thcsc two writ pctitioncrs rvas so lar as the Income Tax Authorities at i rhing the properties of the petitioners as security for future tax liabilitr 3. 'foday, when the matters are taken-up for hearing' t tc lcarned counsel for the petitioners as also the leamed Senior Stand t g Counsel for the Income Tax Department subrnitted that pending rv'i petitions' the account has been rcconriiled by the lncome Tax Dcpa tmcnt and after adjusting of the outstanding demand ol Rs'2'62'i9 754L' tho balance amount has been ortlercd to be released in favour ( I the II E'H' Nizam's Jewellery Trust. 4. Given the sai<l fact that after adjustment of t t ' aloresaid outstanding demand and the releasing of the amount to 11) Trust' the

2 very purpose of hling of the present writ petition stands redressed and they do not intend to pursue further the writ petitions. 5. In view of the same, these two Writ Petitions also stand disposed of. There shall be no order as to costs Consequently, miscellaneous petitions pending, if any, shall stand closed. Sd/-AJAYASREE ISTANT REGISTRAR //TRUE COPY// SECTION OFFICER 1. The Chief Commissioner of lncome Tax-ll' l-T rs, A-C.Guards, Masab To SA SB Tank, HYderabad - 500 004' 2. The Commissioner of lncome Tax - 7' l.T.Towers, A.c.Guards' Masab Tank, Hvderabad - 500 004. 3. ;fr;il;iil"al Commissioner of lncome Tax' Ranga - 9' I'T Towers' A.C.Guards, Masab Tank, Hyderabad - 500 004 , - +. f nu income rax Officer, WaiO o1+1, Room No' 247 ' znd Floor' Masab Tank' Hyderabad - 500 004. s. ft" S""r"irty, H.E H. The Nizam's Jewellary Trust' Single Mahal' Purani Haweli, HYderabad. o. in" air";t Manager, State Bank of Hyderabad'' Gunfoundry Branch' Hyderabad. z. iie ntsistrnt Commissioner of lncome Tax' Circle 9 (1)' l'T' Towers' A.C.Guards, Masab Tank, HYderbad' 8. One CC to SRI DANTU SRINIVAS, Advocate [oPUUl . ;. o;; aa to SRt K.SUDHAKAn neooY, LEARNED sENloR STANDING - COUf.rSeL FOR THE INCOME TAX DEPARTMENT' Advocate [OPUC] 10.Two CD CoPies Ny t ta-

HIGH COURT DATED:2610812025 COMMON ORDER WP.Nos.6434 OF 2012 AND 194of2016 DISPOSING OF THE BOTH WRIT PETITIONS WITHOUT COSTS ,;6f''i ,\\ \:'r. \ l9 JAll ?t?b -t-. q I th .t (_) @"

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