TaxTMI 
TaxTMI 
2019 (8) TMI 1060
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.... be pleased to issue the appropriate writ, order or direction, quashing and setting aside the impugned orders of attachment dated 01.03.2012 and 19.12.2018, order setting proclamation dated 29.10.2018 and 19.12.2018 and proclamation of sale dated 21.12.2018 as being bad, illegal, unjust, unreasonable, arbitrary, violative of the principles of natural justice and contrary to the law. (B) YOUR LORDSHIPS may be pleased to stay the implementation, operation and execution of Proclamation of Sale dated 21.12.2018 (Annexure- "E") issued by the Respondent pending the admission, hearing and final disposal of this Petition. (C ) YOUR LORDSHIPS may be pleased to grant such other and further reliefs as may be deemed fit by this Hon'ble Court, in the interest of justice." 5. The writ applicant seeks to challenge the following orders: (i) The order of attachment (ITCP-16) of the Plot No.7, Vibrant Villa, Opp. Sanskardham, Bopal-Sanand Road, Manipur, Ahmedabad dated 01.03.2012 and 19.12.2018 respectively issued under the Rule 48 of the Second Schedule to the Income Tax Act, 1961. (ii) The notice for setting a sale proclamation (ITCP-17) dated 29.10.2018 ....
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....nks of the assessee company. 6. 01/03/12 Various immovable properties in name of assessee company and directors name were attached, in which properties Vibrant Villa, Village-Manipur, TA- Sanand (Plot No.7,45,48 &n 70) and Meghanshwood (Plot No.4 to 11), Village-Chekhla, TA- Sanand also included. 7. 12/09/12 Notice u/s. 226(3) of the I.T Act, 1961 were issued upon various debtors and banks of assessee company. 8. 28.09.2012 Order u/s. 221(1) of the Act was passed on 28.09.2012 levying penalty of Rs. 1 Crore due to non-payment of self-assessment tax. 9. 15.02.2013 A proclamation of sale notice for open plots in Vibrant Villa, Village-Manipur & Meghanswood, Village-Chekhla, TA- Sanand was published in daily newspapers on 17.02.2013 for auction of the immovable properties and I.T. C.P 17 issued to Shri Gaurav H. Dave & Smt. Amiben G. Dave, they refused to accept the said notice, therefore, notice was affixed and signature of two witnesses were taken. 10. 25.02.2013 A letter from M/s Metroglobal Limited was received through its company Secretary Shri Nitin S. Shah objecting the auction proposed for above mentioned open plots. 11. 18.03....
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....n the directors of the company that Shri Gaurav H. Dave & Amiben G. Dave (P/165) 24. 29.12.2017 Letter sent to Valuation Officer for valuation Report in the case of Meghansh Woods, Village-Chekhla, TA-Sanand & Vibrant Villa, Village Manipur, Ta-Sanand. 25. 29.01.2018 Information to Draw Recovery Certificate in Form 57 in the case of M/s Shivam Water Treaters Pvt. Ltd for recovery of outstanding demand of Rs. 1453.99 Lacs for A.Y. 2010-11 to 2014 received from the A.O 26. 21.02.2018 A recovery survey action conducted on 21.02.2018 at the 201 to 204, Shital Varsha Arcade, C.G. Road, Navrangpura, Ahmedabad. Two bank accounts were found and the same were attached, resultant Rs. 1.87 Lakhs was recovered from the banks. During the course of survey proceeding it was stated that books of accounts were with Auditor and same would furnished on 26.02.2018. 27. 22.02.2018 Request for giving installments against payment of IT Dues for Self Assessment Tax for the A.Y. 2010-11 & other years filed by the assessee before the Addl. CIT, Range- 4(1), Ahmedabad & DCIT, Circle-4(1)(1), Ahmedabad. 28. 26.02.2018 Summons under Rules 83 of the Second Schedule t....
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....was issued to the CIT(Cir.8) Ahmedabad to grant permission to pay the arrears of self assessed tax for A.Y.2010-11 amounting to Rs. 72,48,908.24/with interest of Rs. 4,34,934.49/by 31/3/2019 along-with release of bank accounts pertaining to CBDT Order OM-374/A/III/2011. But this office has not received any such direction for revocation of bank accounts which were attached by this office. 35. 27.04.2018 Summons under Rule 83 of the Second Schedule to the Income Tax Act, 1961 were issued to Shri Gaurav H. Dave & Amiben G. Dave on 27.04.2018 to attend office on 01.05.2018 at 12:00 PM & 11:00 AM respectively but no one from them attended in given time. 36. 27.04.2018 A summons was issued to Shri Naren Jhadkia, Chief Manager, Punjab National Bank, Navrangpura Branch, Ahmedabad and his statement was recorded on oath on 27/4/2018. On being asked the following questions i.e. Mode of receipt of the said letter, name and identity of person delivering the letter, identity of the employee of the bank who received the letter, the details of other such letters received by the bank if any. In answer to the above questions Shri Naren Jhadkia, Chief Manager, Punjab National Ban....
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....78,464/including interest u/s 220(2) of the I.T. Act, 1961 of Rs. 3,70,86,487l(upto 16.10.2018) for A.Y. 2010-11 was received from the A.O. i.e. DCIT, Circle 4(1)(1), Ahmedabad. 43. 29.10.2018 A public notice was published in daily news papers on 29.10.2018 regarding any objection proposing auction open plots in Virbant Villa, Village Manipur, TA Sanand. 44. 29.10.2018 ITCP-17 notice for setting a sale proclamation for plot No.7,45,48 of Vibrant Villa, Village Manipur, TA Sanand issued and served upon the assessee 30.10.2018 through affixure and E-mail. 45. 02/11/18 Letter received from Hema Shah Insolvency Resolution Professional regarding Initiation of CIRP in respect of Shivam Water Treaters Pvt. Ltd. 46 20.11.2018 I.T.C.P. 17 issued on 20.11.2018 for Plot No. 4 to 9, Meghansh Woods, Village Chekhla, TA Sanand. 47. 20.11.2018 ITCP 17 Notice for setting a sale proclamation was issued on 20.11.2018 and served upon the assessee on 05.12.2018 by affixture and E-mail. 48. 28.11.2018 Advertisement for proclamation for sale of immovable property i.e. Vibrant Villa, Village Manipur, TA Sanand published in daily news papers on 30.11.2....
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....d properties for sale by issue of proclamation for the purpose of recovery of the tax amount due and payable by the Company, in which, the writ applicant is one of the Directors. As noted above, an order under Section 179 of the Act also came to be passed by the Assessing Officer. The order passed under Section 179 of the Act attained finality. The same was not challenged by the writ applicant at any point of time. Submissions on behalf of the writ applicant: 10. Mr. Bhati, the learned counsel appearing for the writ applicant vehemently submitted that the time limit for sale of the attached immovable property having been elapsed, the property should be released from attachment. To fortify his submission, Mr. Bhati has placed reliance on Rule 68B of the Second Schedule to the Act, 1961. According to Mr. Bhati, no sale of immovable property is permissible after the expiry of three years from the end of the financial year, in which, the order, giving rise to a demand of any tax, has become conclusive in terms of the provisions of Chapter- XX. According to Mr. Bhati, the notice under Section 143(1) of the Act which came to be issued upon the writ applicant should be construed as ....
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.... pursuant to the 'demands' [ITCP-l dated 14.10.2011, 29.11.2011 & 04.12.2018 Page Nos. 98, 100 & 177] raised from following three 'orders' only and not against the order u/s 143(3) for the A.Y.2010-11 dated 18.03.2013: (a) Intimation u/s 143(1) dated 11.04.2011 for the A.Y.2010-11 raising demand of Rs. 8,71,86,512/-, which remained unchallenged under Chapter XX and hence became 'final' during F.Yr.2011-12 and (b) Assessment Order u/s 143(3) for the A.Yr.2008-09 dated 14.12.2010 thereby creating demand of Rs. 7,25,920/-, the above Assessment Order was also not challenged by the assessee company as provided under Chapter XX to the Act and hence 'final'during the F.Yr.2010-11. (c) Order u/s 220(2) dated 16.10.2018 [Page No. 173 to 176] quantifying consequential 'Interest' in respect of order issued u/s 143(1) dated 11.04.2011 as mentioned In original ITCP-1 dated 14.10.2011 & 29.11.2011. Word 'order' has not been defined In the Income Tax Act, 1961. As per Black's Law Dictionary 'order' means a command, direction or Instruction. Here Impugned Intimation was a command to the assessee company to pay Rs. 8.71 crores. Moreover, an Intimation is ....
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....be issued by the department in absence of an 'order' raising the said demand, reliance is placed on the Hon'ble Bombay High Court's decision in the case of Rasiklal Amritlal Doshi vs. A Nundy [42 ITR 35 (Bom)]; which further supports the petitioner's contentions that intimation u/s 143(1)(a) for this purpose is an 'order'. 7. Answering to Para 2 of the respondent's synopsis; the assessment order u/s 143(3) [Page No. 123] does not even whisper about the unpaid self-assessment tax. The said assessment order merely takes Rs. 21,50,24,470/- as the base for making additions and disallowances. The demand which came to be raised through the said order should only be with regard to the 10 additions and disallowances made therein. Further, kind attention is drawn to Section 3(1)(a) of The Taxation Laws (Continuation and Validation of Recovery Proceedings) Act, 1964 [enclosed herewith] wherein, It is clearly laid down that in any proceedings, if the government dues are enhanced, the taxing authority shall serve upon the assessee another notice of demand only in respect of the amount by which such government dues are enhanced. Further, Section 3(3) of the above Act also state....
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....ny stretch of imagination be construed that the Supreme Court meant that the intimation u/s 143(1) is not an order. In this connection, judgement of the Delhi High Court in the case of Epcos Electronics Components S.A. v/s UOI (2019) 107 taxmann.com 227 (Del) may kindly be referred to. 10. In pursuance to Para 6; vide the case of EPCO Electronic Components SA vs. Union of India, it is clearly seen that a revision can be made u/s 264 of the IT Act. Revision can only be made against some 'order'. Therefore, intimation u/s 143(1) is an order. Moreover, heading of section 246A of the IT Act reads as "Appealable orders before Commissioner (Appeals)". The section further classifies the intimation u/s 143(1) of the IT Act to be an 'order' an appeal against which would lie before the Commissioner (Appeals). 11. In pursuance to Para 8; the contention of the respondent that the time limit of three years has not even started would destroy principle of equity. On one hand, the respondent has already attempted and failed twice in auctioning off the properties of the petitioner in pursuance to the demand raised vide order u/s 143(1) of the IT Act and on the other hand it Is....
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....or the purposes of Rule 68B of the Second Schedule to the Act. Since the returned income came to be accepted, there was no question of issuing any demand notice under Section 156 of the Act. 13. In the instant case, after Section 143(1) acknowledgment, the regular assessment took place under Section 143(3) of the Act. The returned income has been taken as the base and further additions have been made by the A0. As against the returned income of Rs. 21,60,24,470/-, ten more additions were made and the total assessed income was arrived at Rs. 40,93,10,902/- and thereupon the demand came to be raised. It is thereupon that demand notice and challan came to be issued. 14. The scrutiny assessment under Section 143(3) came to be challenged before the CIT(A). 15. In the interregnum i.e. between the acknowledgment under Section 143(1) and passing of the scrutiny assessment under Section 143(3), to protect the interest of the revenue, attachment order came to be passed, which as such is nothing but an attachment under Section 281B r/w Rule 48 of the second schedule. 16. It is submitted that in view of the decision of the Supreme Court in the case of Rajesh Jhaveri stock brokers (....
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....n the case of Rajiv Yashwant Bhale v. CIT reported in 401 ITR 408. Reliance is also placed on the decision of the Kerala High Court in the case of Mohammed Niyas v. CIT reported in (2018) 302 CTR 420(Kerala). 24. It is pointed out that earlier the auction could not be effected as there was certain procedural issues. ANALYSIS 25. Having heard the learned counsel appearing for the parties and having gone through the materials on record, the following questions fall for the consideration of this Court. (i) Whether an acknowledgment or an intimation under Section 143(1)(a) can be treated as an order giving rise to a demand for the purpose of the applicability of Rule 68B in the Second Schedule of the Act? (ii) Whether an intimation under Section 143(1) of the Act is deemed to be a notice of demand of tax under Section 156 of the Act? (iii) Whether an intimation under Section 143(1) (a) of the Act can be equated with an assessment framed under Section 143(3) of the Act? (iv) Whether the phrase "order giving rise to a demand" in Rule 68B of the Second Schedule in the Act should be construed as a final assessment order under Section 143(3) of t....
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.... is not made in accordance with the provisions of sub-rule (1), the attachment order in relation to the said property shall be deemed to have been vacated on the expiry of the time of limitation specified under this rule. " 27. Rule 68B of the Second Schedule to the I.T. Act, thus, makes it obligatory on the part of the revenue to complete the sale of the immovable property attached by it for recovery of any tax, interest, fine / penalty or any other sum within the period prescribed therein. In other words, the sale of the immovable property attached for the recovery of any tax, interest, etc. cannot be held after the expiry of the period of limitation prescribed under Rule 68B and if the sale is not completed within the prescribed period therein, the attachment if any levied on the property is liable to be vacated. 28. Rule 68B was introduced in the Second Schedule to the I.T. Act by Finance Act, 1992 specifically with a view to prescribe the time limit of three years for sale of the attached immovable properties. The proviso to Rule 68B (1) provides for extension of one more year in certain cases where the sale falls through. In other words, if the sale held within the peri....
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.... though it is only when both the computation sheets are signed or initialled by the ITO that the process described in s. 143(3) will be complete." 32. The learned counsel appearing for the writ applicant vehemently submitted that the proviso to Section 156 of the Act makes it abundantly clear that where any sum is determined to be payable by the assessee under sub-section (1) of Section 143, the intimation in that regard is deemed to be a notice of demand for the purposes of Section 156 of the Act. 33. At this stage, we may refer to a decision of the Supreme Court in the case of Rajesh Jhaveri Stock Brokers Private Ltd (supra). In the said case, the Supreme Court observed as under: "In the scheme of things, as noted above, the intimation under Section 143(1)(a) cannot be treated to be an order of assessment. The distinction is also well brought out by the statutory provisions as they stood at different points of time. Under Section 143(1)(a) as it stood prior to 1-4- 1989, the assessing officer had to pass an assessment order if he decided to accept the return, but under the amended provision, the requirement of passing of an assessment order has been dispensed wi....
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....: "We are also not impressed with the submission that an intimation has to be treated as a conclusion of the assessment process merely because the intimation under s. 143(1)(a)(i) is by itself deemed to be a notice of demand issued under s. 156 of the Act, after completion of assessment proceedings for a particular assessment year. From the scheme of the new assessment procedure it is obvious that the purpose for which the said fiction has been created in sub-s. (1)(a)(i) of s. 143 to treat the intimation as a notice of demand under s. 156 is to make the machinery provision of recovery of tax applicable to the recovery of tax assessed in terms of the said subsection and nothing more. By the fiction so created, all incidents of a notice of demand shall become applicable even to that intimation even though no regular recovery notice of demand in the prescribed form under s. 156 is served on an assessee, which otherwise is mandatory to enforce any recovery of tax or interest on an assessee." 36. We are of the view that the phrase "order giving rise to a demand" in Rule 68B should be construed as the final assessment order, determining the tax liability of the assessee with....
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....ubsection (2) of Section 143 despite intimation to the assessee of the sum payable by him as tax or interest is not taken away. That right is clearly saved and is not in any way curtailed or hampered by the giving of the intimation. It may be noticed that the section has been recast and one of the main changes brought about is that, under Section 143(1), a regular assessment order as such is not to be passed. Power to make an adjustment in terms of its proviso can be invoked only when the claim is prima facie inadmissible, that is, it should be clear or self-evident. A decision on a debatable issue is not envisaged. On the contrary, when proceedings are taken under Section 143(2), it partakes of the nature of a regular assessment and the assessing authority should pass an order under Section 143(3). Shri Nema also urged that because the intimation is deemed to be a notice of demand of tax under Section 156 of the Act, the proceedings for assessment should be taken as complete in all respects, subject of course to the assessment being reopened in terms of Section 147. This contention also is devoid of any substance. The intimation under Section 143(1)(a)(i) is only fictiona....