SELECTION GRADE SECY. A.M.C. HYD. V. COMMR. OF I.T. (APPEALS) V, HYD AND 2 OTHERS

WP/4209/2008

AI Insights

The case involves the Agricultural Market Committee, Hyderabad, challenging a notice issued by the Income Tax Officer under Section 226(3) of the Income Tax Act, 1961, which demanded payment of Rs.2,74,16,532.00 including interest for tax arrears. The notice was directed to the State Bank of Hyderabad to recover the said amount. The petitioner argued that the notice was illegal and without jurisdiction. The court had earlier granted an interim suspension of the notice on the condition that the petitioner deposits Rs.20,00,000.00, which was complied with. However, upon reviewing the merits of the case, the court dismissed the petition, allowing the enforcement of the tax demand.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 732770 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 29-11-2022
• Assessment Year: misc
• Laws Referred To: Article 226 of the Constitution of India, Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: J V PRASAD
• Assessee Lawyers: V V N RAO
• Keywords: Garnishee notice; Income Tax; Interim suspension; Tax arrears; Writ of Mandamus
• Section: 234B; 234A; 226(3)

Judgement Text

"[ 32e5 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD (Special Original Jurisdiction) TUESDAY,THE TWENTY NINTH DAY OF NOVEIVlBER TWO THOUSAND AND TWENTY TWO PRESENT THE HONOURABLE THE CHIEF JUSTICE UJJAL BHUYAN AND THE HONOURABLE SRI JUSTICE C.V. BHASKAR REDDY Between: The Agricultural Market Committee, Hyderabad Rep. by its Selection Grade Secretary. .-PETITIONER AND 1 2 3 The Commissioner of lncome Tax(Appeals), Ayyakar Bhavan, lllrd Floor, Basheerbagh, Hyderabad. The lncome Tax Officer Ward.5('1), Hyderabad The State Bank of Hyderabad, Treasury Branch, lVlethodist Complex, Abids, Hyderabad, rep. by its Branch [Vlanager. ...RESPONDENTS Petition under Article 226 of the Constitution of lndia praying that in the circumstances stated in the affidavit filed therewith, the High Court may be pleased to issue a writ, order or direction more particularly one in the nature of Writ of Mandamus declaring the notice dated 14.2.2008 issued under Section 226(3) of the lncome Tax Act by the 2nd respondent herein and given effect to the said notice by the 3rd respondent is illegal, arbitrary and without any authority of law and jurisdiction and set aside. l.A. NO: 2 OF 2008(WPMP. NO: 5501 OF 2008) Petition under Section 151 CPC praying that in the circumstances stated in the affidavit filed in support of the petition, the High Court may be pleased to suspend the operation of the notice dated 14.2.2008 issued under Section 226(3) WRIT PETITION NO: 4209 OF 2008 of the lncome Tax Ar t by the 2nd respondent herein pending cisoosal of the above writ petition and pass such other order or orders. LA. NO: 1!F 200q0 /VMP. NO: 1213 OF 2008) The lncome Tax Offi ;er, Ward 5 (1) Aayakar Bhavan, lll Floor l3ashererbagh, Hyderabad PETITIONER AND 1. The Cor rmissonerof lncome Tax (Appeals) V, Aayzrkar Bhavan, lll Floor B; sheerbagh, Hyderabad. 2. The Sta e Bank of Hyderabad, Treasury Branch, IVlelhoclist Complex, Abids, l-yderabad, re.by its Branch Manager'. 3. The Agr cultural lvlarket Committee, Hyderabad, relr. By its Selection Grade I elect6ion Gr. Secretary (Respo rdent:; 1 to 2 are not necessary in this F'r-.l.iticn) RT:SPONDENTS Petition under Section '151 CPC praying that in the circurnstances stated in the affidavit filed in suppc,rt of the petition, the High Court nray tre pleased to VACARE the lNTEIillr/ [IRECTION granted vide order dated 28-2-2008 in W.P.ttl.P.No. 5501 o 2008 in W.P.No. 4209 ol 2008. Counsel for the Peti :ioner: Sri. V. V. N. Narayana Rao Counsel for the Res ronde nts: J V PRASAD (SC FOR INCONIE TAX) The Court made the folloraring: ORDER Between: : I l THE HON'BLE THE CHIEF JUSTICE UJJAI BHI.IYAN AND THE HON'BLE SRI JUSTICE C.V.BTIASKAR REDDY WRIT PETITION No.42O9 of 2OO8 ORDER: {Per the Hon'ble the Cllief Justice Ujjal Bhugan) None has appeared for the petitioner on call, though Mr. J.V.Prasad, learned Standing Counsel, Income Tax Department is present for respondents No. 1 and 2 2. This petition has been filed under Article 226 of the Constitution of India assailing the legality and validit-r, of the notice dated 14.02.2008 issued by respondent No.2 under Section 226(31 of the Income Tax Act, 1961 (briefly, the Act' hereinafter). 3. As per the impugned notice, a sum of Rs.2,74,16,532.00 including interest under Section 234A and 2348 of the Act was due from the petitioner. I Therefore, the garnishee notice under Section 226(3) of the Act was issued to respondent No.3 to pay to respondent No.2 the aforesaid amount due on account of arrear income tax and interest. 4. Thrs Cor-rr: vide the order dated 28.O2.2C(t8 llmLd admitte cl the s'r t petition and directed that there vn: uld be interim susper s:on on the condition that p:titioner deposrted a s lrn rl Rs.20,00,000.00 on or belore 31.03.2008 5. In tI-re p oi:eerlings held on 17.06.2008, petitioner sought for a r ir-ectjon to the respondents to reflrnd the amount oi I?s. .:r8.5i0,500.00 appropriated by resprondents No. 1 and 2 pr r:.u:rnt to the notice dated 14.02.20()B aJter deducting Lhe a;rrolrnt ol Rs.20,00,000.00 as rvar; 'iirr:cted bv this Courl r,n 28.02.2008. It r,r,as submitled orL trel'ralf of the Income T u Dr:pa:'tment that the amount vrhich was transferre:d h rs; been retransferred to the petitioner after mzrking tl-re dt d Lrct;on of Rs.20,00,000.00. 6. In the 1-rearing today, Mr. J.V.Prasac. learned Stancling Cor nsel submits that in a batch of rvrit, al)peals prayer of he Agricultural Market Comrnttees for registration rnde: Section 12A of the Act rr';a s upheld thereby entil .ing them to claim exemption from l)aynlent of lncome ta>r I I 7. Without entering into such aspect, !te are of the view that it is open to the petitioner to avail its remedy in accordance rvith law but there cannot be any indefinite stay of the demarid of tax arrears. Miscellaneous applications pending, if any, shall stand closed. However, there shall be no order as to costs. //TRUE COPY// SD/.I. NAGALAKSHMI DEPUTY REGISTRAR , -t:/- SECTION OFFICER To, P J 1. 2. 3 T G One CC to Sri. V. V. N. Narayana Rao, Advocate IOPUC] One CC to Sri. J. V. Prasad (SC for INCOME TAX) [OPUC] Two CD Copies J B. Subject to the above, writ petition is dismissed. HIGH COURT DATED: 291111202,2 ORDER WP.No.4209 of 2(108 DISMISSING THE: WRIT PETITION WITHOUT COSTI3. ,/1: :, t' 4 I (' u / c5 @--, * --/. tt' ' - e()'- "