2026 (2) TMI 213 - HC - Income Tax

Attachment of immovable property and limitation under Rule 68B: proclamation held within limitation; writ petition dismissed.

An attachment order for immovable property was challenged as time-barred under Rule 68B; the limitation was held to run from the end of the financial year ... Attachment order issued by the Tax Recovery Officer in respect of the immovable property - proclamation of sale was issued in Form No.I.T.C.P.13 - Limitation period under Rule 68B - principal ground on which the petitioner challenges the proclamation of sale is that the limitation period of three years prescribed in Rule 68B of the Second Schedule of the I-T Act expired HELD THAT:- It is clear from the language of Section 261 that an unsuccessful party to an appeal before the High Court may request for a certificate of appeal to the Hon’ble Supreme Court in terms thereof. If the petitioner had requested for such certificate and been granted the same, a statutory appeal could have been filed without applying for special leave. Without resorting to this option, the petitioner opted to directly apply for special leave before the Hon’ble Supreme Court. Undoubted position is that the assessment order could have been set aside, modified or revised by the Hon’ble Supreme Court. Consequently, it cannot be said that the order attained finality until the Hon’ble Supreme Court dismissed the special leave petition on 15.05.2015. 15th May 2015 falls within the financial year 2015-16, which ends on 31.03.2016. Therefore, the limitation period should be reckoned from 31.03.2016 and would run up to 31.03.2019. The documents on record disclose that the impugned proclamation of sale was issued on 12.06.2018, which is within the said limitation period. On account of this conclusion, the judgments relied upon by learned counsel for the petitioner, including the judgments of this Court in Noorudhin and T.Subramanian[2001 (3) TMI 35 - MADRAS HIGH COURT] will not come to her rescue. Implications of not taking action to sell the immovable property within the prescribed period of limitation - Under Rule 65B(4), the statute incorporates a legal fiction providing for the attachment order being vacated. It should be noted that Part III of the Second Schedule is confined to the attachment and sale of immovable property and does not otherwise curtail the right of the Tax Department to recover the dues mentioned in the certificate issued u/s 222. As petitioner contended that the second certificate issued and the attachment made pursuant thereto is confined to a sum of Rs. 6,13,294/- and that any recovery pursuant to said tax certificate should be confined to the said amount. This contention is meritorious but does not carry the petitioner very far in view of the earlier conclusion that the proceedings pursuant to the first certificate are within the period of limitation. WP fails. Issues: Whether the proclamation of sale under Part III of the Second Schedule for recovery of tax is barred by the three year limitation in Rule 68B on the ground that the order giving rise to the demand had become final earlier than the date relied on by the Revenue.Analysis: Rule 68B(1) prescribes a three year prohibition on sale of immovable property to be reckoned from the end of the financial year in which the order giving rise to the demand becomes conclusive under Section 245-I or final under Chapter XX. The assessment order was challenged before the High Court and thereafter by Special Leave Petition before the Supreme Court. Finality for the purposes of Chapter XX is the point at which the order is no longer capable of being set aside, modified or revised under the statutory appeal provisions. Section 261 provides for a statutory route to the Supreme Court by certificate; absent use of that route, a Special Leave Petition still meant the assessment could be set aside or modified by the Supreme Court until the SLP was dismissed. The SLP was dismissed on 15.05.2015, which falls in financial year 2015-16; therefore the limitation period under Rule 68B is to be reckoned from 31.03.2016 and runs until 31.03.2019. The proclamation of sale dated 12.06.2018 falls within that period. The fact of a later certificate for a specified lesser sum does not negate the validity of proceedings under the earlier certificate where limitation is satisfied.Conclusion: The proclamation of sale is not barred by limitation under Rule 68B and the writ petition is dismissed; result is against the petitioner and in favour of the Revenue.