Asma Abdul Razak, Aged 46 Years Wife of Abdul Razak V. Union of India, Represented by Secretary, Ministry of Finance and Commissioner of Income Tax, Kannur and Income Tax Officer - Ward 1, Kannur

WP(C)/12973/2023

AI Insights

The case involves Asma Abdul Razak, the petitioner, who is challenging an income tax assessment order (Ext.P6) passed against her, which pertains to income earned by her company, Zahra Phones Private Limited. The primary contention is that the petitioner and the company are distinct legal entities, and thus, the assessment order against her personally is unjustified. The respondents argued that the assessment was based on a bank statement showing joint account holdings and the petitioner's failure to respond to notices. The court found that the matter could be addressed through an appeal under the Income Tax Act, rather than through a writ petition under Article 226 of the Constitution.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 802063 (HC-KERALA)
• Appeal Type: Others
• Pronouncement Date: 06-06-2023
• Assessment Year: misc
• Laws Referred To: Income Tax Act, Article 226 of the Constitution of India
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: CHRISTOPHER ABRAHAM
• Assessee Lawyers: ISAC PAUL; JOHN NELLIMALA; SARAI SAIJURAJA
• Keywords: Appealable order; Assessment Order; Income Tax; Statutory remedy
• Section: 226

Judgement Text

"IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT THE HONOURABLE MR.JUSTICE C.S.DIAS TUESDAY, THE 6TH DAY OF JUNE 2023 / 16TH JYAISHTA, 1945 WP(C) NO. 12973 OF 2023 PETITIONER: 1 ASMA ABDUL RAZAK, AGED 46 YEARS WIFE OF ABDUL RAZAK, KAKKANDAVIDE MEETHAL HOUSE, ANIYARAM P.O., CHOKLI, KANNUR, PIN - 670672 BY ADVS. ISAC T.PAUL JOHN NELLIMALA SARAI SAIJURAJA C. RESPONDENTS: 1 UNION OF INDIA, REPRESENTED BY SECRETARY, MINISTRY OF FINANCE, NORTH BLOCK, RAJ PATH, NEW DELHI, PIN - 110001 2 THE COMMISSIONER OF INCOME TAX, AYAKAR BHAVAN, KANNOTHUMCHAL, KANNUR, PIN - 670006 3 THE INCOME TAX OFFICER - WARD 1, AYAKAR BHAVAN, KANNOTHUMCHAL, KANNUR, PIN - 670006 SRI JOSE JOSEPH THIS WRIT PETITION (CIVIL) HAVING COME UP FOR ADMISSION ON 06.06.2023, THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: WPC No.12973 of 2023 2 JUDGMENT Dated this the 06th day of June, 2023 The writ petition is filed challenging Ext.P6 assessment order passed by the respondents. 2. The petitioner’s case is that, she is a Director of a Company named ‘Zahra Phones Private Limited’. The respondents have erroneously passed Ext.P6 assessment order against the petitioner in respect of the income pertaining to the above Company. The petitioner and the Company are two different entities. Therefore, Ext.P6 order is untenable and unsustainable in law, and is liable to be quashed. Hence, the writ petition. 3. Heard; Sri. Isac T. Paul, the learned Counsel appearing for the petitioner and Sri.Christopher Abraham, the learned Counsel appearing for the respondents. WPC No.12973 of 2023 3 4. The learned Counsel appearing for the petitioner reiterated the contentions in the writ petition and argued that the action of the respondents in proceeding against the petitioner for the income earned by the Company is arbitrary and capricious. Hence, Ext.P6 assessment order may be set aside. 5. Sri.Christopher Abraham, on instructions, submitted that the respondents proceeded against the petitioner on the basis of Ext.P4 bank statement, which unambiguously shows that the petitioner is a joint account holder with the Company. Despite issuing a notice to the petitioner, she maintained stoic silence and failed to respond to the same. Hence, the respondents assumed that the income shown in Ext.P4 statement pertains to the petitioner. Consequently, Ext.P6 assessment order was passed. Ext.P6 is an appealable order. Therefore, WPC No.12973 of 2023 4 if the petitioner is aggrieved by the said order, she has an alternative and efficacious statutory remedy under the Income Tax Act and not under Article 226 of the Constitution of India. Nevertheless, the Standing Counsel very fairly submitted that, if the petitioner prefers an appeal within a time fixed by this Court, the respondents will consider the appeal, notwithstanding the delay in filing the appeal. Having considered the pleadings and materials on record and after appreciating the rival contentions by the learned Counsel, I deem it appropriate to dispose of the writ petition in the following manner: (i) The petitioner may, if so advised, prefer an appeal before the Appellate Authority challenging Ext.P6 assessment order, in accordance with law, within a period of thirty days from today. (ii) If the petitioner exercises her right to WPC No.12973 of 2023 5 prefer an appeal, the respondents shall accept the appeal on its file, notwithstanding the delay that has occurred, for the reason that the writ petition was pending before this Court from 05.05.2023. (iii) The respondents are further directed to consider and dispose of the proposed appeal, on its merits and in accordance with law. (iv) Until such time orders are passed in the proposed appeal, if filed within the stipulated time period, all further proceedings pursuant to Ext.P6 assessment order shall stand deferred, until such time orders are passed in stay petition in the proposed appeal. Sd/- C. S. DIAS JUDGE SKP/06-06 WPC No.12973 of 2023 6 APPENDIX OF WP(C) 12973/2023 PETITIONER’S EXHIBITS: EXHIBIT-P1 TRUE PHOTOCOPY OF THE RETURN OF INCOME FILED BY ZAHRA PHONES PVT. LTD. IN RESPECT OF THE ASSESSMENT YEAR 2017 - 2018 EXHIBIT-P2 TRUE PHOTOCOPY OF THE ACKNOWLEDGEMENT RECEIVED BY ZAHRA PHONES PVT. LTD. FROM THE RESPONDENTS IN THE MATTER OF FILING INCOME TAX RETURN EXHIBIT-P3 TRUE PHOTOCOPY OF THE FORM 26AS STATEMENT MAINTAINED BY RESPONDENTS IN RESPECT OF ZAHRA PHONES PVT. LTD. EXHIBIT-P4 TRUE PHOTOCOPY OF THE STATEMENT OF CURRENT ACCOUNT OF ZAHRA PHONES PVT. LTD. MAINTAINED BY THE FEDERAL BANK LTD. EXHIBIT-P5 TRUE PHOTOCOPY OF THE LETTER DATED 22.03.2023 ISSUED BY FEDERAL BANK LTD. CONFIRMING THE CASH DEPOSITS RECEIVED INTO THE CURRENT ACCOUNT OF ZAHRA PHONES PVT. LTD. MAINTAINED BY THE COMPANY WITH FEDERAL BANK LTD. EXHIBIT-P6 TRUE PHOTOCOPY OF THE ASSESSMENT ORDER DATED 25.03.2022 PASSED BY THE RESPONDENTS EXHIBITP7 TRUE PHOTOCOPY OF THE DEMAND NOTICE DATED 25.03.2022 ISSUED BY THE RESPONDENTS TO THE PETITIONER RESPONDENTS' EXHIBITS:NIL TRUE COPY P.A.TO JUDGE "