SRI. A.S. CHINNASWAMY RAJU vs. THE COMMISSIONER OF INCOME-TAX

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WP/21477/2015HC KarnatakaKAHC01029474201507 July 2021Bench: S SUNIL DUTT YADAV4 pages
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What did the High Court hold?

The High Court set aside the impugned orders relating to recovery proceedings. This was done in light of the Apex Court's decision in Engineering Analysis Centre of Excellence (P) Ltd. v. Commissioner of Income Tax, which had set aside the orders under Section 201(1) and 201(1A) for the petitioners.

What were the facts?

The petitioners sought to quash orders passed under Section 179 of the Income Tax Act concerning recovery proceedings. These proceedings were based on earlier orders under Section 201(1) and 201(1A) of the Act.

What were the issues?

The primary issue was whether the recovery proceedings under Section 179 were valid when the underlying orders under Section 201(1) and 201(1A) had been set aside by a higher court.

Which sections of the Income-tax Act were involved?

Section 179,Section 201(1),Section 201(1A)

AI-generated summary — verify with the full judgment below

1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 7TH DAY OF JULY 2021

BEFORE

THE HON'BLE MR.JUSTICE S. SUNIL DUTT YADAV

WRIT PETITION No.21477/2015 (T-IT)

BETWEEN:

1.

SRI A.S. CHINNASWAMY RAJU

S/O LATE AKKALA RAJU,

AGED ABOUT 85 YEARS

DIRECTOR,

M/S SUNRAY COMPUTERS PVT. LTD.

NO.1, PALACE ROAD,

BENGALURU - 560 001.

(SINCE PETITIONER NO.1

DECEASED ON 31.03.2017)

REPRESENTATIVE BY HIS LEGAL HEIRS,

1(A) SMT. INDIRAMMA

WIFE OF LATE SRI A.S. CHINNASWAMY RAJU

AGED ABOUT 78 YEARS

# 294, 16TH CROSS, SADASHIVANAGAR,

BENGALURU - 560 080.

1(B) SRI C.S. SUNDER RAJU

SON OF LATE SRI A.S. CHINNASWAMY RAJU

AGED ABOUT 59 YEARS

# 294, 16TH CROSS, SADASHIVANAGAR,

BENGALURU - 560 080.

1(C) SMT. REVATHI RAJU

DAUGHTER OF LATE SRI A.S. CHINNASWAMY RAJU

AGED ABOUT 55 YEARS

# 294, 16TH CROSS, SADASHIVANAGAR,

BENGALURU - 560 080.

2 2. SRI C.S. SUNDER RAJU

SON OF LATE SRI A.S. CHINNASWAMY RAJU

AGED ABOUT 59 YEARS

DIRECTOR,

M/S. SUNRAY COMPUTERS PVT. LTD.,

NO.1, PALACE ROAD

BENGALURU - 560 001.

… PETITIONERS

(BY SRI ANNAMALAI S., ADVOCATE FOR SRI BHAIRAV K., ADVOCATE)

AND:

1.

THE COMMISSIONER OF INCOME-TAX

(INTERNATIONAL TAXATION)

R.P. BUILDING,

NRUPATHUNGA ROAD,

BENGALURU - 560 001.

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX

(INTERNATIONAL TAXATION),

CIRCLE - 1(1),

R.P. BUILDING,

NRUPATHUNGA ROAD,

BENGALURU - 560 001.

... RESPONDENTS

(BY SRI K.V. ARAVIND, ADVOCATE)

*****

THIS WRIT PETITION IS FILED UNDER ARTICLES 226 & 227 OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH THE IMPUGNED ORDERS DATED 31.03.2015 IN ANNEXURES-A1 & A2 PASSED ON THE PETITIONER NOS.1 & 2 UNDER SECTION 179 OF THE INCOME-TAX ACT, 1961 BY THE R2 AND ETC.

THIS WRIT PETITION COMING ON FOR HEARING THIS DAY, THE COURT MADE THE FOLLOWING:

ORDER

The petitioners have sought for quashing of the order dated 31.03.2015 passed under Section 179 of the Income Tax Act, 1961 ("the Act", for short) for the assessment years 2000-01, 2001-02, 2002-03 as regards petitioner no.1, vide Annexure-A1 and has also sought for setting aside of the order dated 31.03.2015 passed under Section 179 of the Act, for the assessment years 2000-01, 2001-02, 2002-03 as regards petitioner no.2 vide Annexure-A2.

2.

It is submitted that the proceedings under Section 179 of the Act relates to recoveries pursuant to the orders passed under Section 201 (1) and 201 (1A) of the Income Tax Act as regards the petitioners.

3.

It is further submitted that the order of the Division Bench in ITA Nos.756/2006 c/w 757/2006, 758/2006, 168/2004 and 170/2004, whereby the appeals of

4 the Department came to be allowed is stated to have been set aside as per the orders passed by the Apex Court in the judgment in Engineering Analysis Centre of Excellence (P) Ltd. v. Commissioner of Income Tax in Civil Appeal No.8733-8734/2018 and the Apex Court had clarified that this judgment would be applicable with respect to other matters including Civil Appeal Nos.10115-10117/2013. Accordingly, the order passed under Section 201 (1) and 201 (1A) of the Income Tax Act as regards the petitioners have been set aside.

4.

In light of the same, the impugned order relating to recovery proceedings pursuant to the order under Section 201 (1) and 201 (1A) of the Income Tax Act referred to above are set aside.

The contentions raised in the petition on its merits insofar as the order under Section 179 does not call for any adjudication.

Sd/- JUDGE Np/-

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