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2012 Supreme(Mad) 3574
High Court of Judicature at Madras
M. JAICHANDREN, J.
P. Hariharan
Versus
Commissioner of Income Tax, Chennai & Others
Writ Petition No. 22039 of 2012 & M.P. Nos. 1 & 2 of 2012
Decided On : 16-08-2012
Advocate Appeared:
For the Petitioner:R. Sivaraman, Advocate.
For the Respondents:T. Pramod Kumar Chopra, Advocate.
Headnote:
Income Tax Act - Assessment of Capital Gains on Sale of Agricultural Land - Court directs disposal of appeal and prohibits recovery proceedings
Fact of the Case:
The petitioner filed the return of income for the assessment year 2009-2010, admitting a total income of Rs.1040. The case was selected for scrutiny, and a notice was issued under Section 143(2) of the Income Tax Act. The petitioner had sold agricultural land and invested in residential house plots. The assessment raised a demand of Rs.49,52,600, which the petitioner appealed. The petitioner also filed a petition to keep the demand of tax in abeyance, which was rejected by the second respondent. The petitioner's bank account and properties were attached due to the assessment order.
Finding of the Court:
The court found that the attached properties would cover the tax demand, and directed the third respondent to dispose of the appeal within four weeks. The court prohibited recovery proceedings until final orders are passed in the appeal.
Issues: Assessment of capital gains on the sale of agricultural land, rejection of petition to keep the demand of tax in abeyance, attachment of bank account and properties.
Ratio Decidendi: The court found that the attached properties would cover the tax demand, and therefore directed the disposal of the appeal and prohibited recovery proceedings until final orders are passed.
Final Decision: The court ordered the disposal of the appeal within four weeks and prohibited recovery proceedings until final orders are passed in the appeal.
1. Heard the learned counsel appearing for the petitioner, as well as the learned counsel appearing on behalf of the respondents.
2. It has been stated that the petitioner had filed the return of income, for the assessment year 2009-2010, on 9.11.2010, admitting a total income of Rs.1040/- and it had been processed, under Section 143(1) of Income Tax Act, 1961. Subsequently, the case of the petitioner was selected for scrutiny, under the computer assisted scrutiny system, and a notice had been issued, under Section 143(2) of the said Act.
3. It has been further stated that, during the previous assessment year, the petitioner had sold his family property, in Akkinampattu Village, Palur Post, Chiyyur Taluk, Kanchipuram District and had received his share of Rs.49,89,450/-, out of the sale proceeds. The property which had been sold was agricultural land. The petitioner had invested a sum of Rs.26,74,800/- towards the purchase of residential house plots, in Kancheepuram District. A certificate had been obtained from the Village Administrative Officer concerned stating that the property in question was agricultural land. However, the second respondent, without considering the certificate issued by the Village Administrative Officer and the other evidence placed before him, had completed the assessment, under Section 143(3) of the Income Tax Act, 1961, raising a demand of Rs.49,52,600/-, by his order, dated 26.12.2011, assessing the total income at Rs.1,48,18,510/-. Aggrieved by the said assessment order the petitioner had preferred a statutory appeal before the Commissioner of Income Tax (Appeals), the third respondent herein, on 23.1.2012, and it is still pending on the file of the third respondent.
4. It has been further stated that the petitioner had also filed a petition, under Section 220(6) of the Income Tax Act, 1961, before the second respondent, on 23.1.2012, to keep the demand of tax in abeyance and requesting him not to treat the petitioner as an `assessee in default’. However, the second respondent had rejected the petition filed by the petitioner, by his order, dated 17.2.2012, and had directed the petitioner to pay 50% of the outstanding demand, arbitrarily, without having sufficient reasons to pass such an order. In support of his contention the learned counsel appearing on behalf of the petitioner had relied on the decision, reported inSoul Vs. Deputy Commissioner of Income Tax [2010] 323 ITR 305.
5. At this stage of the hearing of the writ petition the learned counsel appearing on behalf of the petitioner had submitted that his bank account in the State Bank of India, Anna Nagar Branch, bearing Account No.10299780299, had been attached, pursuant to the assessment order passed by the second respondent, dated 26.12.2011. He had also submitted that some of the properties belonging to the petitioner, bearing Plot Nos.44, 45 and 46, in Anandham Royal City-Phase-I, Nattarasanpattu Village, Sriperumbudur Taluk, Kancheepuram District, had also been attached, pursuant to the assessment order, dated 26.12.2011. Since, the value of the properties already attached, belonging to the petitioner, would be more than sufficient to meet the demand of tax. As such, the respondent Department stands sufficiently protected, in respect of the demand of tax, said to be payable by the petitioner.
6. The learned counsel appearing on behalf of the respondents had submitted that the petitioner had not satisfied the conditions stipulated, under Section 54B of the Income Tax Act, 1961, pertaining to capital gains, arising out of the sale of agricultural lands. He had also submitted that the petitioner had received the sale consideration, in respect of the lands sold and he had earned capital gains of Rs.1,48,18,510/- and therefore, he is not entitled to plead financial hardship, while praying for an order of interim stay of the assessment order, dated 26.12.2011.
7. In view of the submissions made on behalf of the learned counsels
