Petition seeking money recovery from Income-tax Department dismissed; petitioner advised to pursue civil suit.

The High Court dismissed the writ petition seeking recovery of money and interest from the Income-tax Department. The Court held that the petitioner should pursue the civil suit filed in Chennai for recovery. It found no merit in the petitioner's plea for a writ of mandamus or to quash the appellate order, as the appeals were rightly dismissed for being invalid and not complying with the Income-tax Act. The Court also noted that the criminal case findings did not impact the assessment proceedings.

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Issues Involved:
1. Claim for recovery of money and interest from the Income-tax Department.
2. Legality of the assessment order and appellate order.
3. Jurisdiction of the High Court under Article 226 of the Constitution.
4. Dismissal of appeals by the Commissioner of Income-tax (Appeals) without a hearing.
5. Impact of criminal case findings on the assessment proceedings.

Detailed Analysis:

1. Claim for Recovery of Money and Interest:
The petitioner, a registered partnership firm, sought a direction for the Income-tax Department to pay Rs. 3,65,17,800 along with interest from the assets of respondent No. 7, which were seized/attached. Additionally, the petitioner requested the remission of Rs. 38,03,511.50 recovered from respondent No. 7's account in Times Bank, Faridabad.

2. Legality of the Assessment Order and Appellate Order:
The petitioner argued that the Income-tax Department committed a grave illegality by treating the money in respondent No. 7's account as her income, despite the criminal case proving it belonged to the petitioner. The petitioner challenged the appellate order on the grounds of violation of natural justice, as the appeal was dismissed without a hearing.

In response, the Income-tax Department stated that the petitioner is not entitled to invoke the High Court's jurisdiction under Article 226 since it had already filed a civil suit for recovery of the amount. They also mentioned that the petitioner did not avail the remedy of appeal before the Income-tax Appellate Tribunal.

The Department clarified that the assessment order did not treat the remitted amounts as respondent No. 7's income. Instead, the sources of these remittances were considered explained, and no specific addition was made for the Rs. 38,03,511.50 in the Times Bank account. An addition of Rs. 30 lakhs was made on an estimate basis due to numerous indistinguishable entries in various bank accounts.

3. Jurisdiction of the High Court under Article 226:
The Department contended that the petitioner could not seek a mandamus from the High Court as it had already filed a civil suit in Chennai for recovery of the amount. The petitioner countered that the civil suit was unrelated to the Income-tax proceedings.

4. Dismissal of Appeals by the Commissioner of Income-tax (Appeals) Without a Hearing:
The petitioner criticized the dismissal of its appeals by the Commissioner of Income-tax (Appeals) without a hearing. The Department defended the dismissal, stating that the appeals were invalid as they were not accompanied by the assessment order and were inconsistent with Section 246A of the Income-tax Act.

5. Impact of Criminal Case Findings on the Assessment Proceedings:
The petitioner argued that the findings of the Additional Chief Judicial Magistrate, which convicted respondents Nos. 6 and 7 and sentenced them to imprisonment and a fine, should influence the assessment proceedings. The Department maintained that the criminal case findings could not nullify the assessment order passed under Section 158BC(c) read with Section 144 of the Income-tax Act.

Conclusion:
The High Court dismissed the writ petition, stating that the petitioner should pursue the civil suit filed in Chennai for recovery of the amount. The Court found no merit in the petitioner's plea for a writ of mandamus or for quashing the appellate order, as the appeals were rightly dismissed for being invalid and not in accordance with Section 246A of the Income-tax Act.

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