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IN THE HIGH COURT OF GAUHATI, ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH
KARDAK ETE, J.
Pabitra Kumar Hira, S/o. Late Maneswar Hira – Petitioner
Versus
The Union of India, Represented By The Secretary, Department of Revenue, Ministry of Finance And Ors. – Respondents
WP(C) No.2683 of 2019
Decided On : 02-05-2024
Income Tax Act - Sale Notice - Rule 68B of Schedule II - Summary of Acts and Sections: Rule 68B of Schedule II of the Income Tax Act, 1961 - The court discussed the provisions of Rule 68B, which sets a time limit for the sale of attached immovable property for recovery of unpaid taxes. It also considered Section 245-I and Chapter XX of the Act, which deal with the conclusiveness of orders and appeals. The court highlighted the limitations and consequences of the rule, emphasizing that the impugned sale notice was barred by limitation under Rule 68B.
Fact of the Case:
The petitioner, a businessman, challenged the legality and validity of the impugned sale notice and attachment order issued by the Income Tax Department for recovery of outstanding dues. The petitioner contended that the orders were barred under Rule 68B of Schedule II of the Income Tax Act, 1961.
Finding of the Court:
The court found that the impugned sale notice and attachment were indeed barred by limitation under Rule 68B of the Income Tax Act, 1961. It set aside the impugned notice of proclamation of sale and the attachment over the petitioner's immovable property. The court granted liberty to the authorities to proceed for recovery of the dues under permissible provisions of the Act and Rules.
Issues: The main issue was whether the impugned sale notice and attachment were barred by limitation under Rule 68B of the Income Tax Act, 1961.
Ratio Decidendi: The court's decision was based on the interpretation of Rule 68B, which sets a time limit for the sale of attached immovable property for recovery of unpaid taxes. It also considered the provisions of Section 245-I and Chapter XX of the Act, emphasizing the limitations and consequences of the rule.
Final Decision: The Writ Petition was allowed, and the impugned notice of proclamation of sale was set aside. The attachment over the petitioner's immovable property was also set aside. The authorities were granted liberty to proceed for recovery of the dues under permissible provisions of the Act and Rules.
Heard Mr. R. Dubey, learned counsel for the petitioner. Also heard Dr. B.N. Gogoi, learned Standing Counsel, Income Tax Department appearing for all the respondents.
2. By filing this writ petition, the petitioner has challenged the legality and validity of the impugned sale notice dated 27.03.2019, whereby immovable property of the petitioner is sought to be put on sale and also the attachment order dated 20.12.2018, passed by the respondent authority on the ground that the impugned sale notice as well as the order of attachment are barred under the provision of Rule 68B of the Schedule II of the Income Tax Act, 1961.
3. The petitioner is a businessman who is engaged in supply of power tillers and tractors to various Departments of the State of Assam. The petitioner is the proprietor of various firms and filed his income tax returns regularly.
4. In the year 2004, the Assessing Officer made a block assessment of the income of the petitioner and vide order dated 30.12.2004, has stated that concealed undisclosed income of the assessee/petitioner herein was Rs.98.62,670.00 (Rupees Ninety Eight Lakhs Sixty Two Thousand Six Hundred and Seventy) only, for the Financial Year 1996-97 to 2001-02 and from 01-04-2002 to 21-112002 (Assessment Year 1997-98 to 2002-03 and 2003-04 (in part)). Thereafter, a demand notice was issued under Section 156 of the Income Tax Act, 1961 vide dated 30-12-2004, along with Assessement Order and Challan.
5. On receipt of the demand notice dated 30-12-2004, the petitioner filed a Revision under Section 264 of the Income Tax Act, 1961, before the Commissioner of Income Tax, Guwahati-I, which was disposed of by an order dated 05-12-2006. Thereafter a revised assessment order dated 11-12-2006 was issued to the petitioner by the Assessing Officer and the payable income tax by the petitioner was amounting to Rs.63,10,881.00 (Rupees Sixty Three Lakhs Ten Thousand Eight Hundred and Eighty One) only, including Surcharge of Rs.2,82,841.00 (Rupees Two Lakhs Eighty Two Thousand Eight Hundred forty one) only and interest of Rs.3,71,228.00 (Rupees Three Lakhs Seventy One Thousand Two Hundred Twenty Eight) only. Thereafter, as many as seven Certificates vide dated 19.11.2007 and 30.07.20018, respectively were drawn against the petitioner for a total amount of Rs. 1,15,54,004/-.
6. It is the contention of the petitioner that in view of the Revision Order dated 05-12-2006 and the consequential revised assessment order dated 11.12.2006, it become conclusive in terms of provision of Chapter XX of the Income Tax Act, 1961 in the financial year ending 31.03.2010.
7. According to the petitioner, due to his illness, he could not clear the revised dues on account of his poor financial condition. Thereafter, the authority in the Income Tax Department has issued a demand notice vide dated 07.12.2017, for clearing the outstanding dues of Rs.1,14,32,906/-.
8. Vide letter dated 18.12.2018, the respondent authority namely, the Tax Recovery Officer-I, Guwahati issued a letter to the Senior Sub-Registrar, Mangaldoi to restrain the sale of immovable property of the petitioner, in terms of the provisions contained in Schedule-II, Rule 16(1) of the I.T.C.P. Rules, 1962. Another letter was also issued to the Circle Officer, Mangaldoi Revenue Circle to restrain the sale of property by the petitioner on the ground that huge amount of income tax is outstanding against the petitioner and the Certificate proceeding has been drawn against him.
9. The respondent authority by an order dated 20.12.2018, notice of attachment of the property in question was issued under Section 226(3) of the Income Tax Act, 1961 and on the same day i.e. on 20.12.2018, by another order prohibited and restrained the petitioner from transferring or charging, which is included in property of the petitioner. Finally, the authority has issued the impugned notice of public auction/proclamation of sale of the property of the petitioner to be held on 27.08.2019.
10. The petitioner has
AI
The central legal point established in the judgment is the application and interpretation of Rule 68B of Schedule II of the Income Tax Act, 1961, which sets a time limit for the sale of attached immo....
Limitation period for tax recovery under Rule 68B of the Income-tax Act, 1961 is reckoned from the date of finality of the assessment order, which was confirmed post the dismissal of the special leav....
Point of Law – The power to issue prerogative writs under Article 226 of the Constitution is plenary in nature and is not limited by any other provision of the Constitution This power can be exercise....
The validity of property transactions can be affected by the vendor's tax issues, leading to potential void status; bona fide purchaser claims necessitate separate civil proceedings for determination....
The main legal point established in the judgment is the interpretation of the provisions of the Second Schedule of the Income Tax Act to determine the legality of the sale conducted and the authority....
Rule 68B of the Income Tax Act does not apply to recovery proceedings under the RDDB Act; the limitation period for such recoveries is governed by the Limitation Act.
The main legal point established in the judgment is that under Order XXI Rule 32 C.P.C., the attachment of properties will automatically cease after six months unless the decree is satisfied or an ap....
The transfer of property made in violation of the provisions of the Income Tax Act, 1961, and the Second Schedule to the said Act is void.
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