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2019 (7) TMI 1157
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.... states and submits that the petitioner is having PAN No.BZZPP9015K 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. ....
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....the consequences mentioned in section 32(*) of the C.P:.C 1908. SPECIFICATION OF DOCUMENTS AND BOOKS 1. Personal attendance is compulsory 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 per....
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..... Mr. Shah also invited our attention to Rule 73 of the Second Schedule to the Act, 1961. Section 73 falls within part- V of the Second Schedule. It talks about notice to show-cause. Part-V is with respect to arrest and detention 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 issui....
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....ent assessment. Ms. Bhatt, from the record available with her, pointed out the following: (i) Penalty notice under section 271(1)(c) read with section 274 of the Act, 1961 along with the demand notice under section 156 of the Act 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 ....
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....ence, administering oaths, enforcing the attendance of witnesses and compelling the production of documents." 16. Rule 73 of the Second Schedule reads as follows: "Notice to show cause. 73. (1) No order for the arrest and detention in civil prison of a defaulter shall be made unless 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 ....
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....rt under the Code of Civil Procedure 1908 (5 of 1908 ), when trying a suit in respect of the following matters, namely:- (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a banking company and examining him on oath, (c) compelling the production of books of account and other documents; and (d) issuing commissions. (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 i....
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....is Chapter and in the Second Schedule referred to as "certificate") and shall proceed to recover from such assessee the amount specified in the certificate by one or more of the modes mentioned below, in accordance with the rules laid down in the Second Schedule- (a) attachment and sale of the assessee's movable property; (b) attachment and sale of the assessee's immovable property; (c) arrest of the assessee and his detention in 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 ....
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.... plaintiff, it is mainly contended that the Tax Recovery Officer has no jurisdiction to go beyond the documents shown to him and cannot conduct any further enquiry. This contention has no substance. The Tax Recovery Officer derives his powers under the Second Schedule and the Income-tax (Certificate Proceedings) Rules. Under Section 136, Income-tax Act, all proceedings before the officer shall be judicial proceeding. Under Rule 82 of the Second Schedule, every officer acting under this Schedule shall be deemed to be acting judicially within the meaning of 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 7....
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.... submission of Mr. Shah that as no proceedings could be said to be pending, as on date, before the Income Tax Officer, who passed the assessment order, the summons under Rule 83 of the Second Schedule to the Act could not have been issued. The assessment order came to be passed by the Income Tax Officer. The notice of demand under Rule 156 of the Act was also issued by the Income Tax Officer and sent along with the order of assessment to the writ applicant. Thereafter, the next step in the process is the recovery. The summons under Rule 83 of the Second Schedule 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 Of....
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....ice for penalty u/s.271(1)(b) of the I.T. Act, 1961 for non compliance and notice u/s. 142(1) were issued on 13.10.2016, which were served on the assessee. However, neither any compliance has been made nor any details furnished by the assessee in response to the said notices. 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 21.10.2016. Further, again a show cause notice for penalty u/s. 271(1)(b) of the I.T Act, 1961 for non compliance was issued on 21.10.2016, which was served on the 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 as....
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....Cuttack II East Circle Cuttack, reported in Laws (Ori) 1997 118. In the said case, the petitioner was a registered dealer under the provisions of the Orissa Sales Tax Act, 1947 and the Central Sales Tax Act, 1956 and he was assessed to tax for the year 1989-90. The petitioner was reassessed for the period in question consequent upon receipt of the report from the Inspector of Sales Tax regarding suppression of purchase of betelnut from the petitioner by one third party. The petitioner therein appeared in the reassessment proceedings. It appears that summons was issued through registered post 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 author....