Ajay Kumar Murarka and Shashi Devi Murarka V. The Chief Commissioner of Income Tax, Ranchi and Principal Commissioner of Income Tax, Jamshedpur and Income Tax Officer 1(3), Jamshedpur

WPC/2202/2020

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The case involves Ajay Kumar Murarka and Shashi Devi Murarka, petitioners, who challenged an order dated 18.03.2020 under Section 179(1) of the Income Tax Act, 1961, which held them liable as directors of a company for unpaid tax demands. The petitioners argued that the order was passed without meeting the necessary preconditions. The respondents included various income tax authorities. The High Court of Jharkhand at Ranchi noted that the matter had been remitted to the CIT Appeals to assess the identity, genuineness, and creditworthiness of the share capital in question. The court did not address the merits of the case but allowed the petitioners to withdraw their writ petition with the option to approach the revisional authority.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 793877 (HC-JHARKHAND)
• Appeal Type: Others
• Pronouncement Date: 09-07-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: RAHUL LAMBA
• Assessee Lawyers: NITIN PASARI
• Keywords: Assessment Order; Directors' Liability; Income Tax; Revisional Authority; Writ petition
• Section: 264; 179(1)

Judgement Text

" IN THE HIGH COURT OF JHARKHAND AT RANCHI W.P.(T) No. 2202 of 2020 1. Ajay Kumar Murarka 2. Shashi Devi Murarka --- --- Petitioner Versus 1. The Chief Commissioner of Income Tax, Ranchi. 2. Principal Commissioner of Income Tax, Jamshedpur. 3. Income Tax Officer 1(3), Jamshedpur. -- --- Respondents --- CORAM: Hon’ble Mr. Justice Aparesh Kumar Singh Hon’ble Mr. Justice Deepak Roshan --- For the Petitioners : Mr. Nitin Kr. Pasari, Adv. For the Respondents : Mr. Rahul Lamba, Adv. --- 09/06.07.2022 The writ petition was preferred for the following reliefs :- “a. For issuance of an appropriate writ, order or directions, directing upon the respondents to show cause as to how the impugned order dated 18.03.2020 (Annexure-17) has been passed, without meeting the basic preconditions / requirement as mandated under Section 179(1) of the Income Tax Act, 1961, which has to be strictly adhered too. b. Consequent upon showing cause, if any, and on being satisfied that the precondition stipulated under Section 179(1) of the Income Tax Act, 1961 has not been satisfied prior to passing of the impugned order, the order dated 18.03.2020 may be quashed and set aside. c. For issuance of any other appropriate writ(s)/ order(s)/ direction(s) as Your Lordships may deem just and proper in the facts and circumstances of the case for imparting substantial justice to the petitioner.” Certain developments were brought to the Court’s notice regarding the order dated 22nd October 2020 passed by the ITAT, Ranchi ‘E- Court’ at Kolkata in ITA No.55/Ran/2019 which have been taken note in the order dated 8th June 2022. It was also pointed out by the learned counsel for the Revenue that the assessment order has not been set aside and it is only an opportunity to the assessee to prove all three ingredients of identity, genuineness and creditworthiness of the impugned share capital before the CIT Appeals for which the matter has been remitted. As such, petitioners who are directors of the company cannot escape the liability under Section 179(1) -2- of the Income Tax Act, 1961 in terms of the order dated 18th March 2020 relating to assessment year 2010-11 passed by the Assistant Commissioner, ITO Ward 1(3), Jamshedpur (Annexure-17). It is only after the company has failed to pay the demand despite repeated notices and garnishee notice also that such an order has been passed against the Directors/petitioners of the company. However, learned counsel for the petitioner does not seek to press the writ petition and instead seeks liberty to approach the revisional authority under Section 264 of the Income Tax Act, 1961. Petitioners are at liberty to do so. Let it be made clear that we have not gone into the merits of the case. Learned counsel for the petitioner submits that the revisional authority may be directed to consider the question of delay sympathetically in view of the pendency of the writ petition and that too during COVID period. Needless to say, the revisional authority would consider the question of delay sympathetically in view of the aforesaid circumstances. Writ petition is dismissed as withdrawn with the aforesaid liberty. (Aparesh Kumar Singh, J) (Deepak Roshan, J) Shamim/ "