2015 (9) TMI 392 - HC - Income Tax

Dismissal of Writ Petition Challenging Tax Recovery Officer Notices under Income Tax Act

The Tax Recovery Officer Range-2, The Commissioner of Income-Tax Versus Sri Bhishma Pithamaha

The court dismissed the writ petition challenging notices issued by the Tax Recovery Officer under Section 226(3) of the Income Tax Act. The petitioner's ... Recovery of dues from third parties - realization of dues of the Math - notice issued by the Tax Recovery Officer (TRO) to the Managers of five banks where one Sri.Ramajanam, the power of attorney holder of the writ petitioner was having his accounts - would it be appropriate for this Court to invoke extraordinarily discretionary jurisdiction under Article 226 of the Constitution of India at the behest of a person who does not have any confirmed right over the properties and his filing of the writ petition challenging certain notices, which were neither addressed to him nor relate to his own Bank accounts, but are with regard to Bank accounts of one Sri.Ramajanam, who may happen to be his General Power of Attorney, but would be an independent person? - Held that:- In the facts and circumstances of the present case, in our opinion, the writ Court was not justified in going into the merits of the correctness of the notices which had been challenged in the writ petition by the writ petitioner who, in our view, would be a stranger to the said notices, and the writ petition, filed by a stranger or a person not named in the notices, should not have been entertained. It is well settled law that while invoking equity jurisdiction of this Court, the bonafides of the petitioner approaching the Court is to be considered and even if the law may be, to some extent, in favour of the petitioner yet, if the bonafides of the petitioner himself is doubtful or the petitioner has not come with clean hands, meaning thereby, the equity is not in favour of the petitioner, this Court will always refuse to exercise its extraordinarily discretionary jurisdiction under Article 226 of the Constitution of India in favour of such petitioner. In the facts of this case, we are of the firm view that no discretion ought to have been exercised in favour of the writ petitioner whose bonafide cannot be ascertained and as such, the order of the writ Court allowing the writ petition and quashing the notice dated 3-3-2006 at the behest of the writ petitioner-Bhishma Pithamaha, is liable to be set aside. Issues:Challenge to notices issued by Tax Recovery Officer under Section 226(3) of the Income Tax Act to banks regarding dues from an individual, General Power of Attorney (GPA) execution, ownership disputes over properties, jurisdiction of the writ court, exercise of discretionary jurisdiction under Article 226 of the Constitution of India.Detailed Analysis:1. The petitioner challenged five notices issued by the Tax Recovery Officer (TRO) to banks regarding dues from an individual under Section 226(3) of the Income Tax Act. The petitioner claimed a General Power of Attorney (GPA) had been executed in favor of the individual. The Single Judge quashed the notices, directing the Income Tax Department to refund the amount to the banks with interest, leading to this appeal.2. The history involves disputes over properties of an Income Tax assessee Math, with various claims to Mahanth status. The petitioner filed a civil suit for property declaration, which was dismissed. The petitioner only declared the properties as his after 2003 when selling them through the GPA holder.3. The notices were challenged by the petitioner, not the individual in question. The petitioner's claim over the money in the individual's account was disputed, as the money's ownership was not confirmed. The Court questioned the petitioner's right to challenge the notices not related to his accounts.4. The Court noted the long-standing attachment of Math's properties for tax dues, and the petitioner's claim was still pending judgment. The Tax Recovery Officer found the petitioner's claim pending civil court judgment and dismissed the application under the Income Tax Act.5. The Court assessed the petitioner's actions, including the dismissal of a civil suit regarding property ownership. The petitioner's right over the properties was not established, and previous judgments highlighted the civil nature of property disputes.6. The Court considered the dismissal of a suit by the Income Tax Department regarding attachment orders, emphasizing it did not determine property ownership. The petitioner's lack of confirmed rights over the properties raised doubts about the writ petition's legitimacy.7. The Court emphasized the importance of the petitioner's bonafide in invoking equity jurisdiction under Article 226 of the Constitution. Doubts about the petitioner's intentions and lack of established rights over the properties led to the dismissal of the writ petition.8. The Court concluded that discretionary jurisdiction should not favor the petitioner due to uncertainties regarding property ownership and lack of clear rights. The writ petition challenging the notices was dismissed, setting aside the previous judgment.In summary, the judgment dismissed the writ petition challenging notices issued by the Tax Recovery Officer, emphasizing the petitioner's lack of confirmed rights over the properties and doubts about bonafide intentions in invoking equity jurisdiction.