TaxTMI 
TaxTMI 
2019 (7) TMI 1157
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....K and on 16.12.16, Respondent No.2 passed an assessment order under section 144 of the Income Tax Act, 1961 against the petitioner and against the said order of 16.12.16, petitioner preferred an appeal before the department on 15.06.2019 and currently it is pending. The copy of the said order dated 16.12.16 passed under section 144 of the Income Tax Act is annexed herewith and marked as Annexure-P/2. 2.2 The petitioner submits that the respondent no.2 has raised a demand of Rs. 1,64,67,650/- under section 156 of Income Tax Act, 1961. The copy of the demand notice dated 16.12.16 is annexed herewith and marked as Annexure-P/3. 2.3 The petitioner states and submit that on 30.05.2019, Respondent No.2 issued a letter of recovery of arrear demand to the petitioner. By virtue of the said letter, petitioner was asked to file reply/attend the office of respondent no.2 as in person or through an authorized representative within 7 days from the receipt of the letter. The copy of the letter of recovery of arrear demand dated 30.05.2019 issued by respondent no.2 is annexed herewith and marked as Annexure-P/4. 2.4 The petitioner states that on receipt of the letter dated 30.05.2019, pet....
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....mpulsory 2. Copy of Return of Income alongwith the account and Bank statement of last three years. 3. Details of Movable/Immovable property alongwith description and address in the name of individual alongwith complete details. Given under my hand and seal at Ahmedabad on this 04.07.2019. (Dilip M. Sarvaiya) Tax Recovery Officer-4, Ahmedabad." 4. Mr. Vishwas K. Shah, the learned counsel appearing for the writ applicant has raised the following issues for the consideration of this Court: "1. Whether the impugned summons issued under Rule 83 is within the power and authority of Tax Recovery Officer? 2. Whether the impugned summons is proper and just seeking personal attendance when Vakalatnama of lawyer is filed and petitioner is inclined to cooperate to produce all documents, if reasonable time is given? 3. Whether the impugned summons can stipulate that petitioner will not depart until directed by Tax Recovery Officer when he attends the office on direction of personal presence?" 5. Mr. Shah give us a fair idea about the sequence of events that has taken place in the present matter: Sr. No. Date Events 1 16.12.16 Assessment order is passed agai....
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....on of the defaulter. Mr. Shah tried to draw a fine distinction between Rule 83 and Rule 73 by pointing out that in Rule 73, the Tax Recovery Officer is empowered to call upon the defaulter to appear before him in person on the date specified in the notice, whereas Rule 83 does not confer with any such power. Rule 83 only confers with the power to take evidence. 8. Mr. Shah, in the last, invited our attention to Section 131 of the Act, 1961. Section 131 is with respect to the power of the Assessing Officer regarding the discovery, production of evidence etc. Mr. Shah pointed out that Section 131 very clearly provides or stipulates that for the purposes of the Act, 1961, the Assessing Officer shall have the same powers as are vested in a Court under the Civil Procedure Code when trying a suit in respect of matters like discovery and inspection; enforcing the attendance of any person; compelling the production of books of account and other documents and issuing commissions. Rule 83 is absolutely silent as regards the aforesaid. In such circumstances, according to Mr. Shah, although the respondent No.1 may be empowered to issue summons under Rule 83 of the Second Schedule to the Act,....
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....t was served upon the assessee through speed post. (ii) The certificate under Section 222 of the Act along with the notice of demand under Rule 2 of the Second Schedule to the Act was received from the Assessing Officer for the certified demand of Rs. 2,88,59,337/- for the A.Y. 2014-15. (iii) The TRC was issued by the Assessing Officer after obtaining the necessary permission from the Addl. Commissioner of Income Tax, Range-4(2), Ahmedabad vide Letter No.Addl.CIT, Range-4(2)/Approval/TRC/2018-19. (iv) After the receipt of the TRC, the office of the Tax Recovery Officer (4), Ahmedabad issued the ITCP-1 on 25th March, 2019 for the A.Y.2014-15 and the same was served upon the writ applicant on 27th March, 2019. (v) The writ applicant neither paid the outstanding demand nor filed any reply to the ITCP-1/Form No.57 dated 25th March,2019. In such circumstances, a letter was addressed to the writ applicant to pay demand of Rs. 2,88,59,337/- plus interest under section 220(2) of the Act for the A.Y.2014-15. The said letter was duly served upon the assessee. (vi) The assessee neither attended nor has paid the demand till this date. (vii) In such circumstances, referred to ....
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....ss the Tax Recovery Officer has issued and served a notice upon the defaulter calling upon him to appear before him on the date specified in the notice and to show cause why he should not be committed to the civil prison, and unless the Tax Recovery Officer, for reasons recorded in writing, is satisfied- (a)that the defaulter, with the object or effect of obstructing the execution of the certificate, has, after [the drawing up of the certificate by the Tax Recovery Officer], dishonestly transferred, concealed, or removed any part of his property, or (b) that the defaulter has, or has had since [the drawing up of the certificate by the Tax Recovery Officer], the means to pay the arrears or some substantial part thereof and refuses or neglects or has refused or neglected to pay the same. (2) Notwithstanding anything contained in sub-rule (1), a warrant for the arrest of the defaulter may be issued by the Tax Recovery Officer if the Tax Recovery Officer is satisfied, by affidavit or otherwise, that with the object or effect of delaying the execution of the certificate, the defaulter is likely to abscond or leave the local limits of the jurisdiction of the Tax Recovery Officer....
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.... (1A) If the Director General or Director or Deputy Director or Assistant Director, or the authorised officer referred to in sub- section (1) of section 132 before he takes action under clauses (i) to (v) of that sub- section,] has reason to suspect that any income has been concealed, or is likely to be concealed, by any person or class of persons, within his jurisdiction, then, for the purposes of making any enquiry or investigation relating thereto, it shall be competent for his to exercise the powers conferred under sub- section (1) on the incometax authorities referred to in that sub- section, notwithstanding that no proceedings with respect to such person or class of persons are pending before him or any other income- tax authority. (2) For the purpose of making an inquiry or investigation in respect of any person or class of person in relation to an agreement referred to in section 90 or section 90A, it shall be competent for any income tax authority not below the rank of Assistant Commissioner of Income-Tax, a may be notified by the Board in this behalf, to exercise the powers conferred under subsection (1) on the Income-Tax authorities referred to in that sub-section,....
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.... prison; (d) appointing a receiver for the management of the assessee's movable and immovable properties. Explanation For the purposes of this sub-section, the assessee's movable or immovable property shall include any property which has been transferred, directly or indirectly on or after the 1st day of June, 1973, by the assessee to his spouse or minor child or son's wife or son's minor child, otherwise than for adequate consideration, and which is held by, or stands in the name of, any of the persons aforesaid; and so far as the movable or immovable property so transferred to his minor child or his son's minor child is concerned, it shall, even after the date of attainment of majority by such minor child or son's minor child, as the case may be, continue to be included in the assessee's movable or immovable property for recovering any arrears due from the assessee in respect of any period prior to such date.] (2) The Tax Recovery Officer may take action under subsection (1), notwithstanding that proceedings for recovery of the arrears by any other mode have been taken. " 21. Section 30 of the CPC reads as follows: "30. Power to order ....
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.... Judicial Officers Protection Act. Under Rule 83, every officer acting under the Second Schedule shall have the powers of a civil court for the purpose of receiving evidence. " 24. Her Ladyship also took the view that in exceptional cases, the Court/Income Tax Department may be justified or entitled to lift the veil of the corporate entity and to pay regard to the economic realities behind the corporate entity. The Tax Recovery Officer is entitled to disregard the corporate entity if it is used for tax evasion or to circumvent tax obligation or to perpetrate a fraud. 25. The attempt on the part of Mr. Shah in comparing Rule 73 with Rule 83 for the purpose of making good his submission as regards the power to compel the personal attendance of the writ applicant is, in our opinion, absolutely futile. Rule 73 is a part of Part-V of the Schedule-II. Para-V is with respect to arrest and detention of the defaulter. On the other hand, Rule 83 is within Para-VI of the Schedule-II. Part-VI is miscellaneous. Once Rule 83 clarifies that the Tax Recovery Officer or any other officer, acting under the provision of Schedule-II, shall have the powers of a Civil Court while trying a suit, it n....
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....ule to the Act has been issued by the Tax Recovery Officer. The recovery has to be undertaken in accordance with the provisions of Schedule-II to the Act. The recovery proceedings are pending as on date before the Tax Recovery Officer, and in connection with such pending recovery proceedings, the summons under Rule 83 came to be served upon the writ applicant. 28. We are also not impressed by the submission of Mr. Shah that Rule 83 of the Second Schedule to the Act only talks about enforcing the attendance of the witnesses and not the assessee himself. We may only say that when the assessee appears before the Tax Recovery Officer in response to such summons issued to him under Rule 83, he could be said to be a witness. The mere absence of the word 'assessee' or 'defaulter' would not make any difference. It is always open for the Tax Recovery Officer to seek necessary information from the assessee himself and any other witness or witnesses, if any. 29. The writ applicant has invoked extraordinary equitable jurisdiction of this Court under Article 226 of the Constitution of India for the purpose of questioning the legality and validity of the summons issued under ....
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....he assessee. However, neither any compliance has been made nor any details furnished by the assessee in response to the said notice. Therefore, penalty of Rs. 10,000/- has been levied in the case of the assessee by passing order u/s.271(1)(b) of the I.T Act, 1961 on 02.12.2016. Vide above mentioned notices, the assessee was requested to furnish the details and information called for. However, neither any compliance has been made nor any details furnished by the assessee in response to above mentioned notices till to date. Therefore, a final opporunity of being heard was accorded to the assessee to attend the assessment proceedings personally or through representative duly authorized by him in this behalf along with the information desired by the department under the notices issued u/s.143(2) & 142(1) of the I.T Act, 1961 from time to time on or before 15.12.2016 vide show cause notice u/s. 144 dated 09.12.2016. The said notice was served upon the assessee on 12.12.2016. But again on the date of hearing neither anybody attended nor filed any details/information. No adjournment was also sought for. It is evident from the instances cited above that the assessee has remained call....
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....st which was returned back due to refusal and the Assessing Authority treated such refusal as sufficient service. The Assessing Authority proceeded to pass order of assessment. The petitioner, being dissatisfied, came before the High Court by way of a writ petition. In such factual backdrop, Ms. Bhatt placed reliance on the following observations made by the High Court: "It is not disputed that the sales tax authorities are clothed with the powers of the civil court. Therefore, section 32 of the Code of Civil Procedure will apply and this section give immense power to the assessing authority to compel attendance/appearance of the representative of the concerned firm, M/s. Gopinath Store. We are not satisfied that by mere issuance of a notice by registered post, the assessing authority has discharged his obligation. It is the duty of the assessing authority to secure attendance of the representative of the concerned firm. Section 32 of the Code of Civil Procedure empowers to issue warrant of arrest, attach and sell the property and imposed fine. The provision of section 32 is quoted below: "32. Penalty for default:-The Court may compel the attendance of any person to whom a su....